Will Judgments on Your Student Loan Affect Your Mortgage Refinance?
People who want to start a new life and a new family will always look forward
to buying a new home. This should be easy, particularly if your credit standing is good but what if you've missed a few payments and already have a judgment on
your student loans? Student loans already make it challenging to obtain a mortgage but a judgment could make your application way more difficult and could actually
affect the success of your loan.
How lenders look at you
Your student loans are not the only consideration your lenders will look at in case you need a
loan from them. They will assess the whole picture - your credit history - which will include every single cent you borrowed that has been documented. This will
include your credit card loans, car loans, mortgages and every other type of debt you might have.
Your lenders will also consider the cost of the property
you're looking to purchase, the type of mortgage and your income. If you've had a judgment on your student loans, this could cause your lenders to sit up and be
wary of you. They could either downright refuse you for a loan or hike your mortgage refinance rates.
Should the first scenario occur, you might have to find
other means with which to pay off the judgment on your student loans or go and find other creditors that will take you in and give you a loan for a refinance. Should
the second scenario hold true, you will get the money for a mortgage refinance loan but you will have to pay your debt off the amount of money you
receive.
Will your home be seized?
Believe it or not, most creditors are not interested in seizing your home. If they place a lien on your property
because of the judgment on your student loan, they might have to pay a good amount of money just to take your property.
If it gets sold, the lender may not
always get a sufficient return on their investment. Homes that get seized through a judgment do not sell at market value, which means that your creditor will not get a
lot out of it. This is why most creditors are not really interested in seizing your home just to enforce a judgment on a debt.
Furthermore, a lien does not
automatically mandate you to sell your property - you are not forced to do so. However, should you voluntarily sell the property or in this case, refinance it, you will
have to pay your debt to your creditor out of the payment you received as a result of the transaction.
Second of all, seizure of property isn't something that
most creditors will do because it is, quite simply, bad PR. They want to enforce their right to collect but at the same time, they don't want to be seen in a bad light. If
you're still unsure about the whole thing, your lawyer can shed light on certain things, particularly about laws in your state.
What you should do
First, it's
important that you see a lawyer regarding your situation. They can help guide you on what you can do regarding your credit and give you information on the steps
your creditor could take should they choose to enforce your judgment. This should help you protect your property and whatever income you may be receiving at this
time.
Second, you might want to discuss the steps you have to take regarding your application for a mortgage refinance. Your goal here is to negotiate as
best as you can fair terms - the kind that will help you keep your home and set you back on your feet again.
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Mortgage Loan Calculator?
Is there a standard and known method of how to calculate mortgage ?
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Real cost of mortgage loan calculator?
My parents are considering refinancing to a fixed rate mortgate. I need software that can take in the following info: quoted rate, initial fees including mortgate points, loan amount, loan period, tax deductions on mortgate interest. The software needs to output the following. Total payments minus tax break plotted against time.
If there is no such software, a webpage with step by step instructions to do the calculation would be helpful.
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If you require a 9 percent return on your investments, which would you prefer? ?
If you require a 9 percent return on your investments, which would you prefer?
A.) $5,000 today
B.) $15,000 five years from now
C.) $1,000 per year for 15 yrs
2. The Mutual Assurance and Life Company is offering an insurance policy under either of the following two terms:
A. Make a series of 12 payments of $1,200 at the beginning of each of the next 12 years (the first payment being made today)
B. Make a single lump-sum payment today of $10,000 and receive coverage for the next 12 years
If you had investment opportunities offering an 8 % annual return, which alternative would you prefer?
3. You decide to purchase a building for $30,000 by paying $5,000 down and assuming a mortgage of $25k. The bank offers you a 15-year mortgage requiring annual end-of-year payments of $3188 each. The bank also requires you to pay a 3percent loan origination fee, which will reduce the effective amount the bank lends to you. Compute the annual percentage rate of interest on this loan?
4. Construct a loan amortization schedule for a 3-year, 11 percent loan of $30k. The loan requires three equal, end-of-year payments.
5. ira investments develops retirement programs for individuals. you are 30 years old and plan to retire on your 60th birthday. You want to establish a plan with IRA that will require a series of equal, annual, end-of-year deposits into the retirement acct. The first deposit will be made 1 year from today on your 31st birthday. The final payment on the acct will be made on your 60th birthday. The retirement plan will allow you to withdraw $120k per year for 15 years with the first withdrawal on your 61st birthday. Also at the end of the 15 year you wish to withdraw an additional $250k. The retirement account promise to earn 12% annually. What periodic payments must be made into the account to achieve your retirement objective?
6. Crab State Bank has offered you a $1,000,000 5-year loan at an interest rate of 11.25 percent, requiring equal annual end-of-year payments that include both principle and interest on the unpaid balance. Develop an amortization schedule for this loan.
7. using an online mortgage calculator (see http://moyer.swlearning.com) solve for the monthly savings and the number of months it takes to recoup the refinancing costs in problem 34. Hint under the question ?what will it cost you?? enter 2850 for ?Other? and 0 for all other items
Problem 34 (the Humphreys have 20 years remaining on their home mortgage loan. the loan balance is $125,000. the interest rate on the loan is 6.25 percent per year and their current monthly payment is $913.66. The Humphreys have been wondering if they should consider refinancing their mortgage loan as interest rates have fallen. After calling some banks Mrs. Humphreys found that she could get a loan for $125, 000mwith a maturity of 20 years at a rate if 5.1 percent per year. The refinancing will require that the Humphreys pay closing costs of $2,850. If the monthly savings in payments can be invested at 6 percent per year, would you recommend that the Humphreys refinance their home? Assume monthly compounding in solving this problem)
8. Use an online savings or retirement calculator (see http://moyer.swlearning.com) to solve the following problem: You are now 30 years old and would like to accumulate $2,000,000 in your retirement account at the age of 65. You currently have $50,000 saved in the retirement account. How much must you set aside at the end of each year over the next 35 years to attain your retirement goal if the account earns 6.5 percent per year? How much would you have to set aside each year if you currently have a zero balance in the retirement account?
9. Using one of the mortgage loan calculators available on the internet (see http://moyer.swlearning.com do a loan amortization for a $150,000, 30-year mortgage loan at a rate of 5 percent and answer the following questions?
a.How much is the monthly payment?
b.How much of the first payment (i.e., year 1, month 1) goes towards the interest? How much towards principal reduction?
c.How much of the 180 payment (i.e., year 15, month 12) goes towards interest? How much towards principal reduction?
d.What is the remaining balance on the loan at the end of the fifth year?
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