Risks and Benefits of Interest Only Mortgages

The interest-only loan has recently grown in popularity with home buyers, particularly first-time home buyers. Its popularity can be linked to the increase in housing prices, which have outpaced the rise in Americans’ incomes.

With an interest-only loan, the borrower pays only the interest on the loan each month for a set period of time, typically three to five years. By only paying interest, the initial monthly payments are significantly reduced.
For example, the median price of a single-family home in Boston in 2004 was $379,000.00. At a 6 percent interest rate, the monthly payment for an interest-only loan of 80 percent of the purchase price (a standard mortgage loan) would be $1,516.00, compared to about $1,817.84, for a regularly amortized 30-year loan. Read More

Massachusetts Loan Modification Attorney – Loan Modification

If you are one of the many homeowners having difficulty paying your monthly mortgage, then loan modification could be right for you. If you’ve been late, defaulted on your payments, or owe more on your home than it’s currently worth, you may think that foreclosure is your only option. However, loan modification is an effective and smart alternative, allowing homeowners to avoid foreclosure by lowering interest rates, deferring payments, reducing the principal, or a combination of modification tactics. Although borrowers may be tempted to contact their lenders directly to modify their loans, this process can be lengthy and time-consuming, involving much paperwork, persistence and patience. Read More

Refinancing Your Jumbo Mortgage in Massachusetts

Have you considered refinancing your jumbo mortgage, but held off because you have not qualified? President Bush signed a law last week raising the cap on the mortgages that Fannie Mae and Freddie Mac can buy. “This will reopen the refinancing door to many homeowners who have not been able to refinance because of the low cap on the secondary mortgage market,” according to Ryan Kelly associate of Parker Scheer. Contact Ryan for help in deciding if the timing is right for you to refinance. Read More

Reviewing Mortgage Documents

Homebuyers don’t need an attorney to apply for a mortgage. The mortgage lender is usually able to give an overview of the financial aspects of a particular loan program, and is required by law to disclose the costs and fees involved.

That said, it makes sense to understand the legal aspects of a mortgage application and each lender’s particular requirements before proceeding with a mortgage loan. Every lender is different, and many require the borrower to make numerous representations about their financial situation, the details of the purchase, the source of the down payment, and other critical items. While many borrowers try to negotiate this process on their own, it is important for a buyer to know their rights and obligations before signing on with a mortgage lender. Read More