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Mortgage Fearbuster 14

Posted by  on May 17, 2010
 

Q: I'm really frustrated. Mortgage rates are super low, and I don't have enough money to put 20% down and pay closing costs. I don't want to go FHA because of the mortgage insurance. What can I do to get in on these low mortgage rates?

A: FHA may be your only option as many conventional lenders are requiring 20% down. If they accept less than 20% down, they will require you to pay for private mortgage insurance, which is similar to FHA mortgage insurance. If you are a first time buyer, check with your state housing finance agency to learn more about programs that provide funds for down payments; you sign a note for a second mortgage, but usually don't have to repay until you sell or otherwise vacate the home. Mortgage lenders can provide information about first time buyer assistance programs in your area.

Q: I'm worried that my brother is going to get ripped off. His mortgage lender has filed for foreclosure, and he's getting all kinds of solicitations for "mortgage help." One guy even came to the door and said he could guarantee the lender would stop foreclosure if my bro signed up for his program and paid him an advance fee of $500. What gives?

A: I'm hoping your brother and everyone else does not take the bait on these scams. Legitimate credit counseling services never ask for up-front payments. When mortgage lenders file foreclosure papers, the documents become a matter of public record. Scam artists access these records and solicit their scams to people whose homes are in foreclosure. It's best not to let help come knocking; be proactive and ask your mortgage lender or a HUD approved housing counseling service for help.

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