Mortgage Advice Corner

Mortgage Foreclosure Scams
Beware of Con Artists

With the rise in mortgage foreclosures, more and more homeowners are finding it increasingly more difficult to meet their monthly mortgage payments as interest rates reset. As a result, more people are falling victims to mortgage foreclosure scams. “Rescue” firms promise to save your homes but instead they flee with your money. The BBB offers the following advice for homeowners facing mortgage foreclosure:
  • Contact your local Better Business Bureau (BBB or go to www.bbb.org) to request a free reliability report before engaging any "rescue" company.

  • Talk to your lender directly. If you are unable to make your mortgage payments, the first thing you should do is talk to your mortgage company about how to refinance or restructure your loan payment.

  • Never sign a contract under pressure or before you have time to review. Most importantly, do not sign any document that would transfer your ownership in your home. Ask an attorney or a financial professional to review any paperwork you may be asked to sign.

  • If you believe an unethical mortgage foreclosure “rescue” company has taken advantage of you, file a complaint with your BBB at www.bbb.org.

More from the
Advice Corner

Mortgage Approval Process

Pre-approved Mortgage Commitment - Pre-approved means the borrower receives a loan commitment from bank or mortgage company before a home is found, based on a pre-approval application and a review of the borrower’s credit and finances. Pre-approval signals to sellers that the borrower is a qualified and serious buyer, and it helps to establish a price range. The Mortgage loan calculator can help you determine your monthly payment based on the principal amount and interest, an important first step towards the mortgage approval process. Our mortgage approval calculator can determine your chances of success.

Credit problem - A borrower’s credit history is one of many factors in qualifying for a loan. Nevertheless, if you have credit problems, it does not necessarily mean you will not qualify for a mortgage. Someone who has consistently made payments on time and maintained a good credit record has more financing options than someone who has not and, consequently, a better change for mortgage approval.

Minimum down payment - Generally there is no minimum down payment required for buying a home. However, if your down payment is less than 20% of the value of the home, you may be subject to PMI (which increases your monthly payment). In generally, the larger the down payment, the more inclined the lender is to approve your loan.

Private Mortgage Insurance - Private Mortgage Insurance or PMI provides the lender with a way to recoup its investment if you are unable to repay the loan. PMI is generally required when the mortgage amount is higher than 80% of the home’s value. Thus, if you buy a home with a down payment of less than 20%, you will be subject to PMI.

Closing costs - Closing costs vary from lender to lender. They generally are based on a several factors including the mortgage type, purchase contract, and where you are located. Closing costs usually include the following:

  • Lender fees - fees charged by the lender for expenses related to making the loan, including appraisal fee, credit report fee, origination points, and discount points.
  • Third party fees - these generally include settlement fee, title insurance, and attorney’s fees. 
  • Prepaid items-these include pre-paid interest, hazard insurance, and deposits to set up an escrow account.

Discount points - Discount points are prepaid interest, which you can pay to your lender in exchange for a lower interest rate on your mortgage. Paying discount points (one point is equal to 1% of the loan amount) is often called “buying down” your rate. 

Does paying points make sense? It depends primarily on how long you plan to stay in your home. First, find out how much lower your monthly payments will be if you pay points. Then, calculate how long it will take for those monthly savings to add up to the cost of the points. CalculatorPLUS.com has calculators that help you determine the break-even point of buying down your interest rate.

Interest Rate Lock - Locking your interest rate means your lender guarantees the mortgage rate being quoted on your loan even if market rates change before closing. Most rate locks are for 30 to 90 days, with the option to extend the rate-lock period for a fee. Should you lock your interest rate? That depends on whether you expect rates to rise or fall before you close on the loan and during the mortgage approval process. While no one knows for sure which direction rates will go, by following the financial news and keeping track of Federal Reserve Board announcements you may have some indication as to how rates may change in the near future.

CalculatorPlus.com provides a variety of loan calculator, and credit card calculator that can help you save and make the right decisions.



CalculatorPlus offers free mortgage loan calculator to calculate adjustable rate mortgage. In addition, homeowners can use the loan amortization calculator to generate an amortization schedule. These finance calculator including CD calculator and credit card calculator available on CalculatorPlus can help users make smart personal finance decisions.

Mortgage MarketPlace
Resources from Around the Web