Easy Home Equity Loan

2 days ago I got a letter from Aurora Loan Services, they are offering me to pay about half of my second mortgage loan and saying that, if I do it, "my loan will be considered payed in full". I have to do it within 30 days and the payment has to be done in the form of a cashier check or money order. They also say they will give me an IRS 1099-C form for the amount forgiven.

I have never been late in a payment but I have a terrible loan, I don’t trust my bank (just google Aurora Loan Services and you will see why) and I was considering refinancing soon (it might not be possible as my loan is higher than what my house is appraised for).

Some details about the offer and the loan:

First Loan:
9,000 30 years (5 years interest only)
6.5% APR for the first 5 year, then it will go up

Second Loan:
,000 30 years fixed
13% APR
***offered to pay only ,000 to pay it off***

My loans total: 4,000
My house is now worth: 0,000 to 0,000

I called them today and they said there was no more information I could get, just the letter, in which there isn’t a lot of fine print, pretty much all it says is what I state here. They were kind but not helpful.

Should I take the offer? Will this inflate my income and kill me at taxes time? What questions should I be asking? Is it as good as it seems?

Professional advice is very welcome.

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We had a first mortgage balance of 108,000. However, to avoid PMI our refinanced loan had to be 104,000. So now we have 2 loans, one is the main 104,000 loan and the other loan is about 6,000 which covered the 4,000 balance drop and closing costs. We have the money to pay off the second loan. So, should we pay off the second loan (our rate on this loan is 4.875%)? Also, am I able to deduct this second loan interest as mortgage interest? Thanks.
We have k+ in savings so paying off the loan isn’t a problem. Our "rewards checking" rate is 4.5% so we are basically coming out even by keeping the loan (plus we can deduct the interest).

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…your mortgage early.
Your mortgage balance can only be impacted/reduced only once per month. Therefore, if you have a 30 year fixed rate mortgage at 6% you will pay 6% per year every year until the end of the 30 year term. Interest on these loans are front end loaded as well. Conversely, if you borrow from a home equity line you can make payments every week if you so choose and drive down the outstanding balance of that loan weekly. As you drive down that balance, the bank must reduce the amount of interest it charges you thus yielding a much lower rate than the stated rate charged.

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I have a 5/1 Interest only loan. Resetting 09/2011.

I want to refinance only my first mortgage from an ARM to a 30 year fixed. (It’s currently 8K)
I want to keep my second as is (2K ARM)

Due to declining home values, I have very little to no equity in our home. However, I just want to refinance the 1st (which would be plus or minus about 80% of my current home value).

I have both loans through Wells Fargo.
WF say they can’t do anything unless I have 10% equity.
So I’m looking around for ideas.

I have: Good credit. No car payments. No student debit. No credit card debt.

Any thoughts or other ideas.
I’m happy to keep my 2nd as is.
Just want to get the 8K fixed at a low rate.

Thanks

Interesting Blogs

I want to refinance just my 1st Mortgage.
I have a 5/1 Interest only loan. Resetting 09/2011.

I want to refinance only my first mortgage from an ARM to a 30 year fixed. (It’s currently 8K)
I want to keep my second as is (2K ARM)

Due to declining home values, I have very little to no equity in our home. However, I just want to refinance the 1st (which would be plus or minus about 80% of my current home value).

I have both loans through Wells Fargo.
WF say they can’t do anything unless I have 10% equity.
So I’m looking around for ideas.

I have: Good credit. No car payments. No student debit. No credit card debt.

Any thoughts or other ideas.
I’m happy to keep my 2nd as is.
Just want to get the 8K fixed at a low rate.

Thanks

Interesting Blogs

I have noticed that many many people on here will deny something that is very blatantly true.

or at the very least when cornered, then will try to blame that truth on someone else other than who it belongs.

So lets say for example we say that there is a foreclosure crisis and that it was caused by the government policies that turned a blind eye to regulating mortgages and financial institutions allowing them to make whatever crazy loans they wanted to anyone which of course led to a house boom for which some took credit when it was booming claiming how great of a job they were doing putting new homeowners into houses and how wealthy americans were being able to borrow all that money from the equity in their homes. Things were booming they claimed. But then reality set it, the crash occurred, the bubble burst……and now if you say well there is a major foreclosure crisis due to those policies of deregulation and artificially low interest rates etc…, then the same people who were bragging about the boom will now try to say a) either there is no crisis going on..and its all in your mind, or b) that if there is a crisis going on, it was really caused by the policies of someone who came before them.

This is an example of what I mean by my question. In other words, there is no honesty in political debate..there is no mea culpa…no the buck stops here…no you were right, I was wrong.
I think what I am saying is that some people are purposely dishonest so they can an argument at all cost.

I am just wondering what goes on in their minds, when they know they have to lie to win the argument. How can they believe their policy beliefs are best when they have to lie to win an argument? Or is it that politics is basically just about your own self interest and not the greater good?

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We bought our house in 2002 for ,900. Because we put no money down, we had to obtain Mortgage insurance. If I understand correctly, this would have to be carried as long as their was less than 20% equity in the home.

When we bought the house, there was fear that the local Navy base would close and people were selling their homes to anyone who could breath. We got our house cheap and with a 5.7% fixed interest rate.

The base stayed open and close to 2,000 jobs have been added. Home construction is booming here. At last check, Zillow.com says our house is worth 1,000 after falling from a high of 6,000.

My question is, shouldn’t I be able to drop the mortgage insurance? If so, how do I go about doing it? I have heard it is almost a nightmare to have it dropped. I have not taken out any loans against the house and have paid an additional 0 on my principle almost every month.

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This is what the essay calls for:

research paper explaining the various concepts of mortgages, amortization, principle, interest, accelerated payments, and equity. Include detailed explanationss of the difference between fifteen and thirty year fixed loans, Adjustable Rate Mortgages (ARMs), Private Mortgage Insurance (PMI), home insurance and property taxes.

I have no clue what to write!! I’m all confused. COuld you guys give me some tips on what to write or any websites I should use that’ll help me? I need all the help I could get!!!

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