If the credit report is correct, take care of any outstanding delinquent obligations first.

Resources: 
"Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993. 
 

Can I refinance after bankruptcy?     
Refinancing may be prudent but could be difficult after a bankruptcy. If you're considering bankruptcy, you may want to go to your current lender first and explain the situation. If you have been current on your payments, the lender may be accommodating and refinance your loan, easing your financial situation. 

What can I do if I have bad credit?     
While some people have rebounded from a foreclosure to buy another home within several years, credit problems stemming from a foreclosure can continue much longer for others.
Real estate experts say you should be candid with your lender in discussing these issues. If your bankruptcy resulted from losing your job due to your employer's financial difficulties, a lender probably will look upon your situation more favorably than if your bankruptcy was caused by overextended credit cards.

Resources:
*"Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993.
 

How bad is a previous foreclosure on credit? 
A property foreclosure is one of the most damaging events in a borrower's credit history. In terms of the effect on credit history, a deed in lieu of foreclosure or a short sale is not as adverse an event as is a forced foreclosure. 

What options are there after Chapter 11?     
A previous bankruptcy can remain in a credit file for seven to 10 years.
Depending on when the bankruptcy was discharged and what kind of credit a borrower has reestablished since then, it needn't be an obstacle to obtaining loan approval. The longer ago the discharge occurred, the better off a loan applicant will be.

Many lenders also will take into account the circumstances surrounding a bankruptcy. For example, they may look more favorably upon you as a borrower if your bankruptcy was due to financial reverses you suffered due to your employer's own financial difficulties. On the other hand, if you declared bankruptcy because you overextended your personal credit lines and lived beyond your means, a lender probably won't be as forgiving.

If you are in the latter category, you may want to contact a mortgage broker who may qualify them for a "b" or "c ," loan, which usually comes at a higher interest rate.

Resources:
* "Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993.

• Comptroller of the Currency, Compliance Division, Washington, D.C., (800) 613-6743.
• Office of Thrift Supervision, Consumer Affairs, Washington, D.C., (202) 906-6237.
• Federal Deposit Insurance Corp., Consumer Affairs, Washington, D.C., (800) 934-3342.
  Your state departments of real estate or commerce also may regulate the lenders in your area.
   

Where do I get information on refinancing?     
For information on refinancing, the following booklet may be helpful:
* "A Consumer's Guide to Mortgage Refinancings;" Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120; call (415) 974-2163 to order. 

Where do I get information on finding the best loan?    
For information on how to find the best home loan for you, check out this booklet:
* "How to Shop for a Mortgage," by the Mortgage Bankers Association of America, 1125 15th St., N.W., Washington, DC 20005; call (202) 861-6500.
 

Where do I get information on mortgages?    
Answer: For information on mortgages, check out the following sources for information:
* American Bankers Association; (202) 663-5000.
* Mortgage Bankers Association of America, 1125 15th St., N.W., Washington, DC 20005; (202) 861-6500.

Where do I get information on correcting loan payments?    
The following auditing services can do a thorough review of residential mortgages for lender calculation errors:
* Mortgage Monitor; 1372 Summer Street, Samford, 06905; (800) AUDIT-USA.
* Loantech, (301) 762-7700.

But keep in mind that these services come with a fee, and your lender should be able to work with you to make your own accurate calculation. 


Where can I get a list of mortgage brokers?    
Answer: For information on mortgage brokers, contact the National Association of Mortgage Brokers at (703) 610-9009 


How do I monitor my ARM loan?
Consumer Loan Advocates publishes a book with form letters and worksheets to help people who want to check mortgage payments or adjustments on their own. It costs $19.95 plus $4 shipping and handling. For a copy, write or call Consumer Loan Advocates, 655 Rockland Road, Lake Bluff, IL 60044; (847) 615-0024.

However, calculating the overall savings of the 15-year note over the 30-year note depends on several individual circumstances, such as the borrower's changing income status.
 

What about splitting my mortgage in two and paying bi-weekly?   
Answer: Some people set on paying off their home loan early and reducing interest charges opt for a biweekly mortgage. Monthly payments are divided in half, payable every two weeks.
Because there are 52 weeks in a year, the program results in 26 half-payments, or the equivalent of 13 monthly payments per year instead of 12. Using the biweekly payment system, a homeowner with a $70,000, 30-year biweekly mortgage at 10 percent interest could save $60,000 in interest and pay off the balance in less than 21 years. 
 
Are 40-year mortgages a good idea?    
Answer: Smaller monthly payments are the primary advantage of adding 10 years to the traditional 30-year mortgage, but real estate experts say the shorter-term loan usually is more beneficial for the home buyer. The drawback becomes apparent simply by calculating the cost of additional interest payments, which can total thousands for a few dollars difference in mortgage payments.

How do I drop PMI?     
In some states, the loans have to be at least two years old, and the borrower can not have made any late payments in the last year in order to drop private mortgage insurance. In addition, the loan-to-value ratio must be less than 75 percent. Some state disclosure laws require lenders to notify borrowers after the close of escrow whether the borrower has the right to cancel private mortgage insurance. Under the new federal law - The Homeowners Protection Act - lenders must drop PMI if the loan closed after July 29, 1999 AND the loan-to-value ratio reaches 78 percent of the home's original value. 

What is PMI?    
Answer: Private mortgage insurance, or PMI, insures the lender against a default. It is required when the borrower is making a cash down payment of less than 20 percent of the purchase price.
PMI costs vary from one mortgage insurance firm to another, but premiums usually run about 0.50 percent of the loan amount for the first year of the loan. Most PMI premiums are a bit lower for subsequent years. The first year's mortgage insurance premium is usually paid in advance at the close of escrow, and there is usually a separate PMI approval process.

Lenders generally turn to a list of companies with whom they regularly work when lining up private mortgage insurance.

In most cases, PMI can be dropped after the loan to value ration drops below 80 percent. The Homeowners Protection Act requires PMI to be dropped when the loan-to-value ratio reaches 78 percent of the home's original value AND the loan closed after July 29, 1999. For other loans, find out from your lender what procedure to follow to have PMI removed when your equity reaches 20 percent.

For homeowners who have improved their properties and believe that their equity has increased as a result of these improvements, refinancing the property at a loan-to-value ratio of 80 percent or less is another possible way of eliminating PMI payments. 
 
What does PMI cost?    
Answer: PMI costs vary from one mortgage insurance firm to another, but premiums usually run about 0.50 percent of the loan amount for the first year of the loan. Most PMI premiums are a bit lower for subsequent years. The first year's mortgage insurance premium is usually paid in advance at the closing. 
 
Is PMI always required on low-down home loans?    
Answer: A growing number of private lenders are loosening up their requirements for low-down-payment loans. But private mortgage insurance, or PMI, usually is required on loans with less than a 20 percent downpayment. The Homeowners Protection Act states PMI must be dropped on any loan originated after July 29, 1999 IF it has a 78 percent loan-to-value ratio.