Q & A: Can I Payoff My Mortgage in Advance?

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My husband and I recently inherited a large sum of money. We would like to pay off our mortgage. We have 10 years of payments left. How do we go about this? Is there anyway around a penalty as he thinks we may have one?

In order to payoff your mortgage, all you need to do is contact customer service and request a payoff statement. Simply sending a check for the full principal amount you see on your bill won't close out the account as there is interest that needs to be accounted for. A payoff goes through a certain date and, as long as the money is received, you are done. Any extra interest will be paid back to you. As for the pre-payment penalty, that may be more difficult as it is laid out upfront. If you have held the loan more than 3 years, there may not be such a penalty. That is something you would need to check on (look at loan documentation) and talk to the bank about and see if there's any option. Make sure to speak to someone in management.

My wife and I just sold my mother's city apartment and now we are looking to purchase a new home. Are there any benefits to using all cash? We can use all of the money from the apartment sale and then not have a mortgage. Is there a benefit to that? Or is it better to keep some of that cash liquid and apply for a mortgage?

That is really a question that you should discuss with your accountant and/or financial advisor. The question is most likely whether it makes sense to take a mortgage for a potential tax deduction. At the same time, will the money you retain do more for you than the mortgage bill you are paying every month. Aside from that, you would  pay less in closing costs when you close if you pay cash.

I declared bankruptcy about 6 years ago, personal only. I now want to apply for a mortgage and purchase a home as my family and I have been renting. I now have a steady job and we can afford a home. Is this possible?

Usually, Yes. The vast majority of lenders and situations allow for a new mortgage 3-4 years after your bankruptcy was discharged or dismissed. In that time-frame since the bankruptcy, it's important that you re-established credit and that the credit is good. You should  be able to purchase a home if this is the case.

Can people still get home renovation loans? Some people say yes and others say no? My husband and I can afford the home we want to buy but it needs about $200,000 worth of work and we don't have that kind of money to pay a contractor.

There are renovation loans out there. It depends some on the total amount of money that you are looking for between the purchase and the renovation, but they do exist. Some banks MAY have their own programs, but there is a program offered by Fannie Mae, as well as one through FHA. These are the common renovation loans. Check around in your area as it's likely someone offers them. The real key is that the value of the home, after you renovate, appraises to cover the expenses.
 
Dottie Herman is CEO of Douglas Elliman. If you have a real estate question for Dottie, please send it to: Reporters@WPCnews.com