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Mortgage Questions and Answers from Bills.com

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Read some of the most frequently asked questions on all areas of mortgage for Ask Bill

Mortgage questions are no match for Bill

Bill receives a large number of mortgage questions from first-time homebuyers and even veteran property owners. Securing a mortgage loan that has a low interest rate involves research, paperwork, and the right know-how. With the Ask Bill frequently asked questions, you will have no trouble finding the information you need to secure a great mortgage loan. Browse through the list of Ask Bill frequently asked mortgage questions and find the answers to your mortgage questions. To discover the answer to each question, simply click on the answer link.

Question: My father is 84 years old and has an outstanding note of $107,000 that he is paying $4,400 every 6 months for 2 years, and then the note is due in full. He has no real way to repay this note, but he does have a Townhouse that is paid off and worth about $160,000. I thought that a reverse mortgage would be something he should do, since I am not interested in inheriting from his estate, but would rather see him not worry about this note at his age. What are your thoughts?
Answer: Learn about reverse mortgage benefits.

Question: I really don't know how to ask this; I need help on my mortgage. I will be 62 years old next month. I had to file bankruptcy last year. I can't refinance because of credit and no income. Please help if you can.
Answer: You generally have wait for two years after a bankruptcy Chapter 7 discharge, before you will be approved for a mortgage loan. It is possible to be approved for an FHA loan, while in the middle of a Chapter 13 bankruptcy. Learn about FHA loan requirements.

Question: I am in the process of consolidating my student loans (approx. $45K) and would like to purchase my 1st home soon. Will having student loans be a deterrent to obtaining a mortgage loan? How do lenders view student loans?
Answer: Consolidating student loan options.

Question: How will you help me own my first home if I have tax liens from both federal and state in my credit report? I have an agreement with both and am presently paying them.
Answer: Tax liens information.

Question: Bill, how do reverse mortgages work and how much can I borrow?
Answer: Information about reverse mortgages.

Question: Hi, I just refinanced and I have 2/28 mortgage I don't have a prepayment penalty so why is my payoff more than the original principal? My original balance was $134,235 and the payoff is $137,771.
Answer: Important information on prepayment and home mortgage fees.

Question: Can you give me examples of what impacts my PMI or mortgage insurance rates? And, does my credit score impact my PMI rate?
Answer: How to calculate mortgage insurance rates.

Question: Is there a product called a bi-weekly mortgage where you pay half of your monthly mortgage amount every two weeks? I heard the benefit of this mortgage is that you can cut the life of the loan by several years. Is this true? Thanks.
Answer: About a bi weekly mortgage.

Question: What is the difference between 30-year fixed and 30-year fixed jumbo?
Answer: About a 30-year fixed-rate jumbo mortgage.

Question: To qualify for debt consolidation, must I have credit card debt?
Answer: Debt consolidation options.

Question: When applying for a mortgage or other lines of credit, will it bring down my credit score when various companies check my credit score? What are some ways that I can bring up my credit score other than just paying my bills on time? I filed for bankruptcy a year ago and I want to clean up my credit report.
Answer: Here's how to clean up your credit report.

Question: I was told that an FHA loan was a good choice. Are there different types of FHA loans?
Answer: Here are the different types of FHA mortgage loans.

Question: Due to a bankruptcy seven years ago we currently have four installment loans with high interest rates (15%). The bankruptcy is off our credit report now and the interest rates are not getting better. I own my home free and clear. Would it be wise to get a home equity loan and pay off these high interest loans with the money? All four notes will be paid off in around four years and they total approximately $30,000. My payments run about $1200 per month for the four notes (these are vehicles).
Answer: Important information about a home equity loan - is it for you.

Question: I am trying to consolidate my debt by getting a consolidation loan (2nd mortgage). This will cut my bills in half but the lenders are saying that currently my DTI ratio is too high and they can't do it. I know it's too high that's why I'm trying to consolidate, if I'm not late on bills now why won't they approve me? What are my options?
Answer: Information on consolidation loans.

Question: If the average mortgage rate for a 30-YR fixed rate loan is 5.98%, how would either an "A-Paper" Loan compare to a Subprime Loan? Would A-Paper loan interest rates be a certain percentage less than average and subprime a certain percentage higher than average?
Answer: All about comparing mortgage rates.

Question: I have owned one house for almost 6 years and I haven't refinanced. Now I wanted to refinance and try to pull out my home equity to renovate my house. Is this a good idea or not? How do home equity loans works?
Answer: See the Bills.com Home Equity Loan resource.

Question: I turned 60 this year. I am single, live alone, and own a home that was purchased 6 years ago after a divorce. I have a nice job making approximately $47,000 per year. I want to move and buy another house but don't know if that is wise at this time or if I should wait until I am ready to retire (maybe 6 or 7 years). Will a mortgage company give a new loan to a 60 year old woman? I owe less than $100,000 on this house. It is a two-story and I want a ranch style and to downsize as well. I wish to know what the best way to go financially.
Answer: Here are your home loan solutions.

Question: What are the expenses, fees and closing costs associated with securing a home equity debt consolidation loan?
Answer: What you need to know about a home equity debt consolidation loan.

Question: Do all reverse mortgage products currently available to consumers have adjustable rates?
Answer: Your reverse mortgage products.

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  • DV
    Dimas,
    Turlock, CA,
    Jan, 2012
    I live in California, I had two houses. I bought the rental back in 2005 and in 2007 I bought another house and we made that our primary and rented the one from 2005. Our primary (2007) was 80/20 through Countrywide. at the end of 2008, i had some difficulties that needed help with the payments. I contacted both lenders and B of A declined it for the primary and GMAC was able to lower the payments for the rental(2005). At the end of 2010, we left the primary house and moved to the rental and let the primary foreclose because B of A didn't cooperate and couldn't sustain both properties. Finally the primary house was foreclosed on 6/30/2011 and now I just started to get calls from Fucus Receivable Managements and I'm sure they want the deficiency balances. What should I do or expect at this point? Thanks in advanced for your response.
    • BA
      Bill,
      Jan, 2012
      Read the Bills.com article about recourse loans in California. Consult with a California lawyer regarding your legal liability for the deficiency balance. I infer all of funds were used as purchase money, which should excuse your liability. Gather together all of your documents and review them with your lawyer.
  • JD
    Jean,
    Morton Grove, IL,
    Jul, 2011
    Foreclosure vs Chapter 7. Unemployed since 11/08. 65 yrs old. Used all of my savings & 401K, sold items of value. Current w/mortgage. Owe RE tax 8K. Paid off all creditors, except Chase. They would not work w/me placed a lien on my home. Mortgage is with local credit union. I can't afford to keep my home. I want to file Chapter 7, my understanding is that the trustee w/pay lender 151K, 10K R.E. Taxes, & me 15K, the balance w/go to Chase for lien. House would list for 200K. I've been told (by 2 legal aid sources) an alternative "legal strategy" would be to just stop making payments. That would allow me to accumulate some funds. How can I consider that solution? Wouldn't that leave my Credit Union on the hook for Chase lien? My monthly SS is $1604., monthly expenses (bare) $2,533, shortfall of $929.00. I want to do right by my credit union, but I also want to collect some of my equity. My credit has been ruined by the lien, so that is a non-issue. Foreclosure will take about 7-8 months. I could not accumulate 15K in 7-8 months, which is what I would be guaranteed by Chapter 7. Both legal agencies said not to file Chapter 7. I have health issues, chance of employment is nil. What would provide fairness to all (except 14+due Chase!)and provide me with closure, so I can make the best of what I have.
    • BA
      Bill,
      Jul, 2011
      I will not tell you how to proceed. There are no perfect, one-size-fits-all solutions to debt problems. What is the best, or perhaps I should say the "least bad," solution for you may not be the best solution for your next-door neighbor. As long as you understand the pros and cons of each solution, and pick a solution fully informed of its pros and cons, then you are making the choice that fits your wants and needs.

      The Bills.com Debt Coach illustrates my perspective. You enter your debts, goals, and other information into Debt Coach, which then calculates the costs and benefits to you for each debt solution. You decide which is best for your needs with full knowledge of the consequences of each choice.
  • MT
    Mary,
    Davenport, IA,
    Jun, 2011
    Bill My friends husband recently died leaving if they can find it an old will, he never made a new will leaving her named as benificary. His home loan was in his name only. They live in Iowa is the new wife responsible for the mortgage. I know like on credit card bills in Iowa she is not responsible if her name is not on the account.
    • BA
      Bill,
      Jun, 2011
      The divorce and old will that does not mention the surviving spouse is almost certainly covered by Iowa statute or case law. The answer to your friend's question is also very fact dependent. In other words, the last place to seek legal advice for a fact-dependent legal question is online. There is no quick and easy one-sentence answer.

      The best advice you can give your friend is to urge her to consult with a lawyer in Iowa who has probate experience. Yes, a lawyer's time is not cheap, but the cost of ignorance and not exercising one's rights and understanding one's liabilities is very high indeed.
    • MT
      Mary,
      Davenport, IA,
      Jun, 2011
      There was no divorce in the old will,it was stated his wife at the time would inherit, upon her death it would go to their daughter, the first wife died and the husband remarried, but never made out a new will. Right now they are still searching for the old will. Does this info change your answer in any way?
    • BA
      Bill,
      Jun, 2011
      Your friend should still consult with a Iowa lawyer who has experience in probate law. He or she will review the facts in person, ask probing questions, and offer an opinion based on the particulars of Iowa statute and case law.

      Generally speaking, people can inherit property, but they do not inherit mortgages. A mortgage is a contract, and mortgage borrowers usually cannot assign a mortgage in a will. I can name my spouse as the inheritor of my home, but that does not mean she can assume the mortgage that is in my name only, generally speaking. I add "generally speaking" because I have not studied Iowa law, and it may be possible that the Iowa legislature and governor passed a law allowing surviving spouses to inherit a mortgage. This takes us back to my original point.
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