Q & A: How Do I Buy a Home in Foreclosure?

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My husband recently lost his job. He is actively looking for a new one and hopefully will have one within a few weeks. We can't pay the mortgage if he is unemployed. I want to notify the bank that we can't pay the full amount for a few months. Will they let this slide? We plan to repay when he gets a new job.

This really depends on the lender. There may be circumstances where they allow this or put the loan on forbearance for a time, but there could be a significant effect on credit. Obviously, if there's not an ability to pay, then it doesn't really matter what the case is credit-wise. Perhaps you should contact your lender to see what they might be willing to do. It will probably be handled on a case-by-case, and lender-by-lender basis.

I want to buy a home in foreclosure. Who do I contact? The bank? A real estate agent?

The answer may be either.  Some real estate agents specialize in foreclosures and some lenders publish foreclosures on the internet.  There are also subscription websites that you can pay for to get access to these as well.  Do some research on the internet to figure out the best course for your area. Please remember, though, just because you buy a foreclosure, that doesn't necessarily mean you end up with the best deal, and the work required on the property could be extensive.

My husband and I want to refinance. We currently have a jumbo loan as the area we live in has high home prices. Can we refinance with a conventional loan and then a second mortgage as well?

The rate seems to be better for the conventional loan. You may possibly be able to achieve a better overall payment structure by going with a first and second mortgage. You just need to be careful about the second mortgage you choose. Generally, the cheapest way to go would be a home equity line of credit, but these are variable rates where you are not paying into principal unless you pay above what you are billed. A fixed second may carry a higher rate such that the overall savings isn't quite as desirable. Make sure you get a look at all options before making a decision.

Why would someone need private mortgage insurance? Is that the decision of the borrower?

Private mortgage insurance is a requirement from the bank. Borrowers do not have the ability to choose whether they want it.  PMI (private mortgage insurance) is an insurance policy that protects the bank against your possible default on the loan. It is required anytime you put less than 20 percent down on a purchase, or if you take an FHA (government) mortgage. While this is a policy that protects the bank, the borrower is actually the person that pays for it.

Dottie Herman is CEO of Douglas Elliman. If you have a real estate question for Dottie, please send it to: Reporters@WPCnews.com