I am Behind in Payments and Need Mortgage Help

The U.S. housing market is in a sad state of affairs right now. Millions of homeowners in the U.S. fell behind on their mortgage payments in 2008, and many more will join those ranks in 2009 and beyond. So it's no mystery why so many people are seeking mortgage help right now.

But where do you go? What can you do? How can you get help when you've fallen behind on your mortgage payments, and what options do you have? That's what I'll address in this article.

Generally speaking, people who need help with their mortgage payments fall into one of two categories. If you're seeking help in this area, you can probably identify with one of the following scenarios:

• Scenario 'A' - The homeowner has experienced a temporary financial setback, such as unexpected medical expenses or job loss. As a result, the homeowner falls behind on the monthly mortgage payments and needs help getting caught up. This is a short-term
• Scenario 'B' - The homeowner simply cannot afford the home anymore. This may be because of an ARM loan adjusts to a higher rate, a recent job loss, the accumulation of other debts, or a combination of these things. This is a long-term predicament.

The question is, which of these categories do you fall into? If you are behind on your mortgage payments and looking for help, you must first determine whether you're in a short-term or long-term predicament. You can't find the best path forward until you start with this important distinction. So let's talk about the options people have when they fall into one of these scenarios.

If you are having short-term financial problems, and you feel you can get back on track with your payments, you should start talking to your mortgage lender (or whoever is servicing your loan at present). Most lenders will offer some kind of repayment plan to help you get caught up when you've fallen behind on payments. Specifically, you should ask them about reinstatement, repayment plans and forbearance. These are ways to get caught up on payments in lump sum or through future installments.

If you are having long-term financial problems, and you simply cannot afford the home anymore, then you will probably have to sell. Once again, you should talk to your lender about your options. In particular, you should ask if they would be willing to allow a short sale (where the home is sold for less than what you currently owe on it).

A home loan modification might be another option if you are behind in payments and need mortgage help. This topic has been in the news a lot lately, mainly because it's part of President Obama's economic recovery plan. The government is actually providing incentives to lenders and loan servicers who modify mortgages (to make them more affordable for struggling homeowners).

Conclusion and Going Forward

So, if you have fallen behind on your mortgage payments and need help of some kind, you should take the following steps. First, determine whether your payment problems are short- or long-term in nature. Next, talk to your lender and let them know where you stand. Research the options that are available to you, depending on your scenario. Learn everything you can about the most relevant solutions, and start talking to your lender early on. The worst thing you can do is nothing -- so get started today!

Totally Free Credit Score - No Such Thing

There's a lot of confusion about the difference between credit reports and scores, where to find them online, and how to get a totally free credit score with no strings attached. So this blog post, I'll try to clear up some of the confusion that surrounds this subject.

First things first. Let's talk about the difference between reports and scores, since many people think they are one and the same.

• A credit report is a record of your financial history. It includes information about your past and present credit accounts, loans, payment histories, collections (if any), and other related items. You have three different credit reports, one for each of the reporting bureaus -- TransUnion, Equifax and Experian.
• A credit score is a numerical representation of your report. The FICO credit score is the one most commonly used by mortgage lenders, and it ranges from 300 - 850 (higher is better). You have three scores, one from each of the reporting bureaus, and they can all be slightly different.
  

Understanding the difference between these two things is the key to eliminating confusion. It will also help you understand why there's no such thing as a totally free credit score.

The Myth of Totally Free Credit Scores

In accordance with the Fair Credit Reporting Act (a federal law enforced by the FTC), you are entitled to one free credit report per year, from all three of the reporting bureaus mentioned earlier. You can do this once a year free of charge, and the best place to make your request is through the FTC-approved website at AnnualCreditReport.com.

However ... there is no federal law that entitles you to a totally free credit score. Remember, your score is different from your reports. Now, here's where things get a little confusing. But I'll do my best to keep it simple.

If you want to get a totally free credit report from Equifax, TransUnion and Experian, you can do that right now by visiting the AnnualCreditReport.com website. On the other hand, if you want to obtain your credit scores as well, you will have to pay for them in some way, shape or form.

On some webites, you will see an advertisement for "3 Free Credit Reports and Scores." But this will always be followed by an asterisk and a disclaimer of some sort. Usually, you have to sign up for some kind of credit monitoring service / identity theft protection. You'll have to pay a monthly fee for this service, but you can cancel it anytime. So you can see that it's not a totally free credit score because you've had to sign up for something in order to get it.

You can also purchase your credit scores directly from the reporting bureaus mentioned above, without signing up for any kind of monthly service. You can request it through the MyFICO.com website as well. You will probably pay between $15 and $30 for a single credit score, depending on where you get it.

So let's sum up what we've discussed so far:

• Your credit reports and scores are two different things.
• Federal law entitles you to one free credit report per year, from all three bureaus.
• There really is no such thing as a totally free credit score with no other purchase required.
• You can buy your scores individually or in conjunction with a monitoring service.
• Either way, you're going to pay for the score in some fashion. So it's not totally free.

In closing, I'd like to make an important point on this subject.

It's Still Worth the Money

I'm not saying all of this to dissuade you from purchasing your credit scores. On the contrary, I encourage you review your scores before applying for a mortgage loan. I just want you to understand how the process works. My goal with this article is to help you navigate your way through all of the marketing hoopla to get what you're after.

So even though you can't find a totally free FICO score online, it's still worth the money. You can sure that a mortgage lender is going to review this information when considering you for a loan, so you should preempt that by reviewing your own credit situation -- before applying for a loan. You also need to know where you stand, in terms of your score. If it's low, you should focus on improving your credit so you can get qualified for a good loan with a decent interest rate.

I hope this article helps you understand the world of consumer credit and how all of these things tie together. If you'd like to learn more about this topic, check out the credit section of the main website.

Real Estate Purchase Agreements Online

These days, you can find just about any type of real estate form online. In some cases, you can even get them for free. The same goes for the real estate purchase agreement forms needed when buying a home. So in this blog post, I thought I'd take a break from writing about mortgage loans in order to share a list of useful websites.

Here are some of the places online where you can find free and low-cost purchase agreement forms, as well as other real estate paperwork. Please note that the legal requirements for purchase agreements vary from one state to the next. So before buying a real estate form online, you'll need to do some research to see what your state requires.

Find Purchase Agreements Online

I am not endorsing any of the websites below, but simply presenting them for your consideration (and to save you some time).

• http://www.ilrg.com/forms/realestate-purchase.html
• http://www.lawdepot.com/contracts/real-estate-purchase-agreement/
• http://www.lectlaw.com/formb.htm
• http://www.alllaw.com/forms/real_estate/assignment_of_real_estate/
• http://www.totalrealestatesolutions.com/realestateforms
• http://www.legalwiz.com/free-forms
• http://www.urgentbusinessforms.com/purchase_agreement.asp
  

LegalZoom.com is another website worth checking out. They have a variety of other legal forms available for online purchase. They have some real estate items, but at the time of this article they did not have any purchase agreement forms available. They might be helpful in other real estate areas though.

The real estate purchase agreement is a pretty standard document, across the board. But there are some light variations from state to state. You can probably find information about your particular state's legal requirements on the official website.

Mortgage Interest Rate Predictions for 2009

What will the economy do in 2009? How far will the housing market recover? What kind of mortgage rates will be offered? These are some of the most common questions among home buyers right now, and with good reason.

In this article, I've compiled a list of mortgage interest rate predictions given by a variety of experts. Most of the predictions given below are specific to the 30-year fixed mortgage.

Mortgage Rate Predictions - What the Experts Say

I'll start with my own interest predictions, based on what I've seen the federal government do over the last few weeks. I would predict that the rates for fixed mortgages will hover in the 5.25% - 5.75% range for most of 2009. My prediction for adjustable-rate mortgages is a quarter of a point below that (depending on the type of ARM loan).

U.S. News
The interest rate predictions offered in this article on the U.S. News website are less optimistic than my own. Quoting the 2009 mortgage predictions given by HSH, the article predicts that rates on 30-year fixed mortgages will exceed 6% by the end of the year.

New York Times
This article on the New York Times website quotes the interest rate predictions given by the economic forecasting guru from the Mortgage Bankers Association. She said they expect to rates of 5% or slightly higher through most of 2009.

Business Week
This article by Business Week quotes sources from Freddie Mac, who predict that mortgage rates will remain relatively flat throughout 2009. They expect to see a hovering between 5% and 5.25% for most of the year. It's worth noting that Freddie Mac has a lot of influence over the rates being offered by mortgage lenders, because they buy loans from those lenders.

Not Everyone Gets the Best Rates

Keep in mind that these rate predictions pertain to best-case scenarios. Just because a lender offers a rate of 5.25% on a 30-year mortgage doesn't mean you'll qualify for it. In order to qualify for the best deals on a home loan, you'll need to meet the lender's definition of a "well qualified borrower." This means having a credit score of about 720 or higher, having a favorable debt-to-income ratio, etc.

Related Article:
How to Get the Best Rates on a Mortgage