Home Mortgage Refinancing in 2010’s Down Market

A lot of people are convinced that the bad housing market and economy are going to prevent them from getting a mortgage refinancing that will be beneficial. However, the truth is that mortgage lenders and banks are more eager than ever before to help struggling homeowners. Nobody wants the market to recover more than the lenders and banks who are holding a lot of risky assets unless things improve. Here are some reasons that homeowners should look into refinancing a home mortgage today, and why it is not that hard to get approved for.Many homeowners are struggling financially due to a tough economy and a unstable housing market. Because of these problems though, there are a few opportunities where nearly any homeowner can get a mortgage refinancing that will save them a lot of money, prevent their home from being lost to foreclosure, or both. Because of the housing market, home loan interest rates have actually been lowered to near record lows to help encourage growth and bring some stability. Because interest rates are so low, nearly any homeowner that has the same mortgage from 5 years or longer ago can refinance into a much lower interest rate that will save them a lot of money over the course of the home loan.Homeowners a few years ago would have needed to have a good overall financial situation, equity in their home, and need to meet a lot of other requirements to get a beneficial mortgage refinance approval. Now though, things have changed, and lenders and banks nationwide are easing their refinancing requirements so that more homeowners will get an approval. The vast majority of mortgage lenders and banks already have huge inventories of foreclosed and defaulted on homes that they need to sell, in a bad market. The last thing they want is to drive prices down even further, or deal with a lot of new home inventory. In order to prevent things from getting worse than they are, the lenders and banks are approving a lot of people, even some who have been denied just a few months prior to them applying again.There is even a stimulus plan from the Obama administration that is providing cash incentives to participating mortgage lenders and banks who help struggling homeowners refinance a mortgage. This main goal of this $75 billion housing stimulus program is to prevent foreclosures. Nearly everyone being foreclosed on is in financial trouble, but these incentives take some of the risk off the lenders and banks. Because of the cash incentives, many homeowners are actually preventing foreclosures that are already in place, and getting an affordable monthly mortgage payment through refinancing.Homeowners are being encouraged to take action and contact mortgage lenders and banks to see what the reality of refinancing a mortgage is in this economy. Most homeowners will be pleasantly surprised to see that the fact of the matter is that refinancing a home loan has never been easier, or more beneficial, than it is now.

Different Kinds of Home Equity Loans

Need cash fast but can’t find the right resources? Or perhaps because you have a not so decent credit score? Whichever the case maybe, home equity loan might be the right fit for you. Of course, this only applies if you own a home.Unlike the usual refinancing, these are just small loans which allow a borrower to pay an existing loan. While refinances take quite a while to process, home equity loans are more efficient. Since the equity of the borrower’s house serves as the main collateral, lenders feel more secured hence release the loan quickly. This means that in the event you are unable to settle the payment, you will be at risk of losing ownership of your house.There are certain types of home equity loan such as Home Equity Loans, Home Equity Lines of Credit and Bridge Loans.Home Equity Loans
Similar to conventional loans, it is a type of loan that uses equity as collateral. It is the difference between the value of your house and the total amount of money you have paid. To illustrate, if the appraisal value of your house is $300,000 and your mortgage balance is $200,000, your equity is $100,000. Equity is inversely proportional with your mortgage balance; which means that as your equity goes higher, your mortgage balance decreases.With home equity loans, the lender gives the complete amount of loan which will be paid back by the borrower in an installment basis. In most cases, it comes with a fixed interest rate.Some of the many benefits of home equity loans include longer terms which could reach up to 15 years, it comes with a fixed rate so there is no guessing game, and you can borrow the full amount of the equity. People choose it to pay for college education, home improvement or to purchase any consumer goods.HELOC
Unlike the home equity loan, the HELOC or home equity line of credit doesn’t involve a one-time release of the applied loan. It is basically like a credit card process; a line of credit. This means that if you don’t spend a dime, you won’t have to pay anything.Some of the benefits of HELOC include adjustable rate, flexible terms of payment, and once the total amount of loan owed is repaid, and you will be able to borrow it again. Most people apply for HELOC to support emergency funds. As the money is available for withdrawal, it can somehow add financial security as need arises.Bridge Loans
If you are planning to sell your house and you need cash to make improvements for your house before selling it, then you will be interested in availing bridge loans. So this type of loan is most used by typical home sellers.Some of the features of bridge loans include having competitive loan costs which could reach up to 80% of the total market value, and payments can be settled after 3 or 4 months after release.These loans can be helpful at times when you are in great need of money. However, take note that the risk of losing your valuable asset is at risk hence before considering to apply for any loan, try to find other resources which will put you at less risk or no risk at all.