The Government has taken notice of the economic problems that millions of homeowners across the country are facing and have enacted the $75 billion “Making Home Affordable” plan to assist these homeowners. This mortgage refinance or modification plan allows homeowners to obtain a 4% fixed rate mortgage, and save their home from foreclosure.Homeowners are losing their jobs, losing their income, facing huge debts, or are in bad mortgages and this Government backed plan will help them save hundreds of dollars every single month. This money would help ensure that the homeowner gets their financial problems in order, save money for the future, or pay off other high interest debts. Also, a lot of homeowners now are already in the foreclosure process. This plan would help a homeowner, who is facing foreclosure, a fast track refinance or modification and a greatly increased chance of saving their home.As many as 9 million homeowners will be able to take advantage of this plan. This is due to mortgage lenders and banks receiving cash incentives from the Government for every homeowner they approve for refinancing or modification under the guidelines of this plan. Both the Government and mortgage lenders know that foreclosures really benefit nobody when everything is said and done. Banks and lenders stand to benefit much more by working with the homeowner to get an mortgage payment which is actually affordable. To do this mortgage rates will be lowered to as low as 4% through refinance or modification, to help ensure homeowners can stay in their home, and help the foreclosure rate drop.Homeowners who have already taken advantage of this program from President Obama are reporting savings that average in the hundreds, every single month. Other homeowners who were already in the process of foreclosure were able to actually save their homes. The bottom line is that if you are a homeowner who is in a bad mortgage, having financial problems, or are facing foreclosure, Obamas “Making Home Affordable” plan will likely be able to assist you save your home.
We have all seen the television ads about refinancing and lower payments no matter what type credit you may have, you should be wary of these ads. Many individuals refinancing with bad credit are in dire straits and are easy to take advantage of. Many of these type loans will offer low payments but also come with exorbitant fees that may be tacked on to the end of the loan. Most individuals refinancing with bad credit must go with sub-prime lenders these are completely different than your traditional lender.Depending on why you are refinancing will determine the best loan for you. If you are looking to reduce your mortgage payment due to a medical or unemployment situation than a loan modification or refinancing through your current lender might be the best option. If trying to lower your interest rate because of previous bad credit remember the cost of the loan is tied to your credit score. The worst your credit score the more expensive the loan will be. The interest rate can be reduced if you pay up front points. This is an option that you would need to discuss with your lender to see which way would save you more money to pay up front points or have a higher interest rate.When refinancing check with 6 to 10 lenders to make sure you get the best payment. Not only ask about the monthly payment ask about the total price of the loan creative accounting can be confusing. Lenders can mask the total cost of the loan by giving you the monthly payment that looks advantageous need to know the total cost. Always ask for a good faith estimate so that when the time comes to close on the loan there will be no surprises if a lender does not offer a good faith estimate. I would mark them of the list of viable lenders.Try to plan ahead check with the 3 credit agencies Experian, Equifax and Transunion sometimes you may be surprised your credit score maybe better than you expected. There are also ways that you can improve your credit within thirty days by paying down credit card balances. Take your time and shop around.
Most people tend to believe that they can not refinance their manufactured or mobile home mortgage. In reality, however, there are a variety of refinancing options available. You have a mortgage payment and a deed you will receive when you finish your payment, the same as any other type of homeowner, you also have the same home loan options. If your current mortgage rate is higher than the current nationwide rates, or if your credit has improved since moving in, you most likely would save money, or even walk away with money, if you refinance your manufactured or mobile home.Like any other refinance, you are simply taking out a new loan, with better terms, rates, or both, and repaying your old loan in full. This will reduce your monthly mortgage payment. You can even refinance for more than you owe (but less than the home is worth) and walk out with that cash. Maybe you do not need to save money every month but you could get a loan with a shorter term and same payment as you have now.However, what will matter is whether the mobile home is located on your own private property, or if you rent space to put it on. Then things tend to be less favorable as the refinanced amount would only be worth what your home is worth, not including the land. For most homes the true value is in the land. Check with different lenders to see the terms and conditions for your particular state as it varies.Also, do not forget that you must pay closing costs. These can be paid upfront, or worked into your refinancing. You are better off paying them up front to avoid paying 30 years worth of interest fees on your closing costs. You will pay a lot more in the long run for these closing costs than if you paid them upfront.Right now is a good time for any home owner, regardless of type of home, to at least look into adjusting their mortgage. Use the internet for easy comparison of a wide variety of companies. There’s more often than not, a solution for everyones mortgage refinancing problems. Just be sure to do your research first and go in with some general knowledge gained from reading articles, and looking at lenders websites.-M Petrone
Refinancing a fixed rate mortgage is usually only suggested when interest rates fall, but you can also save money by changing your loan terms. You can also pull out part of your equity to pay bills or renovate.Lower Interest RatesIn general when interest rates are at least 1% lower than your current mortgage rate, it pays to refinance. But you need to consider other factors, such as the length of your mortgage, loan costs, and how long you plan to stay in your home.An adjustable rate mortgage (ARM) should also be considered if you plan to move soon. With rates lower than a fixed, you will see lower monthly payments. But you have the risk that your rates and payments will increase over time.To help decide if refinancing makes sense for you, calculate the difference in interest payments over the course of your loan. Online mortgage calculators can help you find both total interest costs and monthly payments.Better Loan TermsBesides lower interest rates, you can save money by converting to a better loan term. A shorter loan, such as a 15 year term, can save you thousands on interest payments, even if you don’t have a lower interest rate. However, your monthly payments will be 10% to 15% higher.You can also reduce your monthly payments by refinancing for a longer term. You trade lower payments for higher interest costs.Access Your EquityWhether you want to pay off credit cards or pay for your child’s education, you can pull out your equity by refinancing. One of the advantages of using your equity is that your interest is tax deductible.However, if you just want to tap into your equity, a better option is a home equity loan. You can pull out your equity, write off your interest on your taxes, and avoid loan fees.Online LendersOnline financing companies allow you to research terms and fees from your home. You can receive quotes within minutes online, so you can compare finance packages. You can also apply online and qualify for discounts on closing cost with some lenders.To view our list of recommended mortgage refinance lenders online, visit this
page: Recommended Mortgage
Refinance Lenders Online.
The amount of time you should wait to refinance your home depends on some key factors. Some deal with your type of mortgage and the lender you are currently with. Other factors depend on your financial situation and the market at the time you are considering to refinance your home. The type of mortgage you already have on your home determines refinancing timing more than anything else, so lets start there.Questions to Ask Regarding Your Current Mortgage
Does it have a seasoning period? A seasoning period is the time the mortgage company has written into the mortgage documents before which you cannot refinance your home. Some people buy foreclosure homes planning on refinancing once they get it re-appraised with enough value to eliminated the Private Mortgage Insurance. Many banks have time lines on mortgages that help them determine when they break even and will not allow the mortgage to be refinanced before then. If there is no seasoning period then any time is good.
Does your current mortgage have early payoff fees? Most mortgages now have eliminated these clauses because consumers caught on to them. However, if your home was mortgaged some time ago, it may have an early payoff penalty. This means if you pay off the mortgage early (even with a refinancing loan) you will pay a fee. If there is no payoff fee then you do not have to factor in those costs.
Is your current home loan fixed or variable? A fixed term mortgage gives you indefinite security with the current interest rate you have. You can wait out the market and your own personal financial situation to determine when the best time to mortgage will be. If you have a variable or adjustable rate mortgage (ARM) then when the fixed term portion of the mortgage (5 year ARM is 5 years fixed) is up, you may have a significant percentage increase if you do not refinance. If your ARM is getting ready to become variable it is a good time to refinance.
What is your current loan interest rate? Don’t look at the APR (annual percentage rate) since that counts in to your mortgage one time costs you have already paid and cannot recover (closing costs, points, etc). Look at the loan interest rate (the lower number you were likely quoted). Once you have figured out the above factors, and have the loan interest rate in hand you can move onto the next set of factors.Questions to Ask Regarding Your Financial Situation and the MarketThe mortgage market fluctuates interest rates for home loans daily. When that interacts with your personal financial situation and its fluctuations, a few months’ time can make thousands of dollars of difference. Here are some pieces of information you need to make an informed decision about when to refinance your home.
What is your FICO credit score? Do not pay or the vantage credit score, since it is not as well known and likely is not what banks will look at. Get your FICO credit score with a number. If your FICO score is above 700 then it may be a good time to refinance your home loan. If your FICO score is below 700, then you will likely want to repair your FICO score before refinancing since it could save you thousands of dollars to do so.
How much cash do you have on hand? To refinance a home loan you often need cash to cover closing costs (average cost is around $2500). You need to be sure you can cover the closing costs and still have a 3-6 months emergency fund in hand.
How long will you be in the home? If you plan on staying only a short time then the refinancing loan will have to pay for itself quickly. If you plan on being in the home for the foreseeable future then you can afford to take a few years for the refinance to pay for itself. Divide the total costs of refinancing by the savings per month over your old loan to determine how long it will take to pay or itself.
Is the APR for a new loan less than the loan rate for the current loan? You basically want to be sure that the costs of closing (assessment, points, origination fee and so on) when considered as part of the interest rate of the loan save you money over the loan interest rate you already have. Again, don’t look at the APR of your current home loan, that includes previous closing costs that you can’t change.
One of the most valuable assets you may have is not your stocks and bonds and
your diamonds, but your home. If you are like many individuals, you are not
aware of the hidden value of the equity in your home. There are many ways to
use this equity. We can only talk about a few of the most popular ones.You can take out a home equity line of credit and use it for just about any
purpose you can imagine-an addition to your home, start up a new business, fund
a retirement plan, make investments, or consolidate your debt. The latter is one
of the most popular uses for home equity debt. Using the equity in your home,
you can eliminate debt that is at high interest rates by paying it off with the
proceeds of your home equity line of credit. Besides saving money on interest,
you may also receive a tax deduction when you file you taxes.If you are not aware of these possibilities, it is time to learn about taking
out a second mortgage, a home equity line of credit or re-financing your current
mortgage. Some people may be afraid to risk such a valuable asset as their home
and they do not take advantage of these things because they are afraid they will
lose their homes. However, if you inform yourself about how these things work,
you can take advantage of them to be able to do things you dream of, such as
add a room onto your home or just make an existing room larger.If you have thought about how you could possibly use the equity in your home,
there are many ways this can be done. The possibilities about how to use these
funds are as varied as the people who decide to use them. What is the most
valuable use for you? Perhaps you should talk to your tax accountant or
financial advisor to decide what is right in your circumstances.As we said, you can take out a home equity line of credit, a second mortgage or
you can re-finance your current mortgage. A home equity line of credit is the
amount your bank can set aside for you that is the difference between the equity
in your home and the amount you currently owe on it. This kind of line usually
has a variable rate of interest, or it may be adjusted periodically based on the
prime rate. If you have an appraisal that is fairly new, say less than five
years old, the bank will probably let you use that to determine the value in the
house.A new mortgage re-finance will be a bit more complicated, since a new appraisal
is required and a new note is established. Because of this extra work, many
homeowners avoid them, but they are really a good idea since the rates on a
second mortgage are better than on an equity line of credit, and they are
usually fixed, so you won’t get hit with high interest over time.A second mortgage is closer to a home equity line of credit in that it taps the
difference between the existing home loan and the market value of the home.
Like the home equity line of credit, there is not usually a need for an
appraisal, title search or closing fees.But the tax benefit exists with all of these options. Any mortgage interest
paid, up to the value of the home, is tax deductible on your income tax. Even
if you have used the funds for something other than your home, you can take the
tax deduction, as long as the total loans are not greater than the total equity
in the home.So what can you use these new found funds for? You can think of almost anything
to use them for. One of the most common uses, as we discussed, is home
expansion or home improvement. But education costs for you or your children,
business startup costs,and many other uses can be found. No matter what you use
the funds for, you will find that using the equity in your home for your
financial needs is a great idea. You may find that after a number of years of
making payments on your mortgage you have built up a nice equity in your home
that you can take advantage of instead of having the value of it just sit there.
One common way that individuals try to pull out of debt is through refinancing. Refinancing requires individuals to take out loans that pay their other loans in full. There are several advantages and disadvantages to this, and it is important to note that certain pros and cons may not apply to everyone.Among the most positive outcomes of refinancing is debt consolidation. Individuals can cut down the number of monthly payments that they have, which often means a lower monthly payment. A lower monthly payment is key in refinancing, and there are several ways to obtain one.The most common way to secure a lower monthly payment is to look for a refinancing loan that has a lower interest rate than your current loan. Though the overall loan amount will be more, a lower interest rate may result in lower monthly rates.A lower interest rate alone may not lower the amount that you owe each month Another way to lower payments is to agree to loan terms that stretch out the repayment period. Though there may be a longer debt period, stretching out a loan can drastically reduce the monthly payment.All of these actions may have negative consequences though. In some cases, refinancing will lower monthly payments by a negligible amount. When this is the case, debts may not become any more manageable.Worse yet, individuals will be stuck with the loan for a longer period, which can cause more financial strains. Ultimately, an individual may be better served by declaring bankruptcy and wiping out his or her debts entirely.
When you refinance it simply means taking out a new loan in order
to cover the cost of a previous loan. Hopefully you walk out with
some cash as well! Ideally, the refinanced loan should have a
lower interest rate and a lower monthly payment.If you have bad credit, refinancing at times is helpful.
Refinancing makes perfect sense when the first loan taken during
a period of high interest rates can be paid off and a new loan
with lower interest can reduce your monthly payout. Be aware
though, if the difference in interest rates isn’t significant,
you should avoid refinancing as some lenders require additional
charges up front.Since a period of time has passed since you took out your first
loan it does impact the new loan. You will need to compare
different lender’s offers before refinancing your home or car
with or without bad credit.A big advantage to refinancing your home or car is the money you
can save from the first loan payment schedule. It’s also possible
to change the amount of your monthly payments or even change
banks so that you can get a loan on more favorable terms.It’s vital you pay attention and refinance at the right time. Be
patient and do your homework. Take the time to research the
market thoroughly to find the best interest rate and terms on the
loans available for your credit rating. Your credit history will
play a key role in being able to refinance. You might want to
beef up your score before you go into a lender to make a deal.Obtaining a Bad Credit Home LoanIt’s a common misconception that those carrying a bad credit
rating can’t get a home loan. This isn’t true since getting a
loan for homes and many other needs are now more than ever
possible even for those with less than glowing credit scores.Having bad credit means usually means you’ll be required to put
down more at closing in the form of a larger down payment and
you’ll likely end up paying a higher interest rate as well.A typical down payment on a bad credit home mortgage ranges from
3% to 5%. If you find yourself unable to come up with the down
payment you might need to find other avenues for the money as at
short stop gap measure such as a short term personal loan. Then
once you’ve refinanced you can access your financial position.
Another alternative is to look for a down payment assistance
program.Improving your credit rating will give lenders more confidence in
giving you a home loan. Actively working on
consolidating debt to improve your credit score
consolidating debt to improve your credit score, paying all your bills on time and
getting a major credit card with all payments current will help
tremendously. Also, keep a close eye on your credit report for
inaccuracies and incorrect information.Lending companies look at several factors when deciding whether
or not to grant home loans to bad credit individuals.Typically the loan to value ratio, monthly income and debt to
income ratio are considered. However, keep in mind that you’re
free to negotiate with your lender. Oftentimes it’s possible to
get better terms for your bad credit loans simply by doing a
little “haggling” with your lender.
The recent announcement of President Obamas “Making Home Affordable” plan will allow millions of current homeowners the chance to refinance or modify their home loans into new 2% fixed rate mortgages. The savings, through interest alone, easily add up to hundreds of dollars per month. Here is how this $75 billion housing bailout plan works:-Homeowners who have seen their home or property values drop by 15% or more as a result of this housing crisis, are in luck. Millions of homeowners who purchased their home in the past few years now are stuck with mortgages that are actually worth more than the home. Now, you will still be approved for a 2% fixed rate finance even if you owe up to 5% more than your home is actually worth.-Homeowners who have been able to make every one of their mortgage payments on time and in full for the past 12 months, or longer, in a row, can now refinance into the Government backed fixed rate 2% home loan. All homeowners will qualify for this refinancing part of the “Making Home Affordable” plan as long as you have not been late or missed any payments.-“Financial Hardships” such job loss, income loss or reduction, hospital bills or tuition payments, high interest debts, or a whole list of other things will help a homeowner qualify and be approved for a home loan modification. This loan modification will allow homeowners who have missed or been late on a few mortgage payments and are struggling financially. Include a handwritten letter stating your “Financial Hardships” and hand sign it. Attach this letter to your loan application for a 2% fixed rate, government backed, home mortgage loan modification.-A homeowner who is lucky enough to have a mortgage financed or backed from Freddie Mac or Fannie Mae will be automatically eligible, regardless of your financial situation, for a 2% home loan refinance or modification. This is possible, again, because of President Obama’s and the Federal Governments “Making Home Affordable” plan.By taking advantage of this great time for refinancing or loan modification, a homeowner can easily save hundreds of dollars every single month, in interest savings alone. This easily adds up, in most cases, to tens of thousands of dollars in savings over the course of the mortgage, which is usually 30 years. Homeowners who are having financial problems, or think there mortgage payments are too high and they could do better, should look into the potential savings refinancing or modification of your home loan are. Odds are, especially using this “Making Home Affordable” plan, you will qualify for a much better home mortgage than you have now.
President Obama is aware of the hard financial times that the average American faces. Home values have dropped, and the rising number of foreclosures just makes things even worse as each foreclosure lowers the surrounding home values even more. In an effort to help homeowners, the Government now offers 2% home mortgage refinance or modification.This plan, enacted just last month, makes millions of homeowners eligible for a 2% refinance or modification. Some things that were typically needed to be eligible to refinance, such as a 20% equity stake in your home, are no longer required as mortgage lenders and banks strive to follow Obamas guidelines and approve as many homeowners as possible. This stimulus refinance package should make the average homeowners average monthly payment much smaller and savings of hundreds every month are typical. This will help a lot of homeowners who are in foreclosure, or will be, by giving them a chance to save their home.This government backed plan will restore consumer confidence in the housing market, prevent millions of foreclosures, and to help struggling homeowners. There is over $75 billion dollars available to mortgage lenders and banks to help them approve homeowners they otherwise would have denied. This means that getting approval for a mortgage refinance or modification is now easier than ever.Homeowners who are seriously looking into a mortgage refinance or modification and use this stimulus plan will be able to obtain a mortgage payment that is no larger than 31% of the homeowners gross monthly income. A lot of homeowners currently pay 50% or more every single month just on their mortgage payment. A reduction of 20% would equal big time savings which would add up quickly.The mortgage lenders and banks who abide by this stimulus bailout plan will need to follow an exacting set of guidelines set by the Government. Homeowners will easily be able to save huge sums of money every single month just by taking advantage and refinancing their home. At least look into the potential savings from modifying a home using this “Making Home Affordable” plan from Obama.