Posted using ShareThis

A question that is on the lips of many home owners that may have some equity in their homes but are at the same time struggling to meet credit card payments is – should I consolidate my debts by refinancing a home mortgage? Surprisingly the answer is not always, yes.

Take a look at this article written to examine what information you should take into account before making a decision on debt consolidation through refinancing a home mortgage.

Related Blogs

• Refinancing Your Home Mortgage Can Save You a Considerable Amount …
• Secured Loans, Mortgages And Remortgages Have Seen No Improvement. – Finance Article Directory
• Bookmarkindo Blog » Blog Archive » Types Of Home Mortgage Refinancing
• what is a Financial literacy secured loan?
• Fast Secured Loan-Get instant approval today! | GEEK!
• Remortgages And Secured Loans Are Best For Debt Consolidation
• Cheap Secured Loans UK – Get Affordable Cash At Ease
• Mortgage Refinance – Home Mortgage Refinancing – Bad Credit Mortgage Refinance : Home Mortgage Secrets Revealed
• Direct Home Loans » Home Mortgage Loans Online
• Apply Now For Mortgages, Remortgages And Homeowner Loans / Secured Loans | Home Mortgage Refinancing

Finding the best refinance mortgage rates depends on a few factors one of them being where you actually live. Another, significant, factor is the type of mortgage you are looking for and whether you want to opt for an interest only mortgage (not recommended). That said, there are essentially 2 main groups that mortgages fit into:

- Adjustable Rate Mortgages
- Fixed Rate Mortgage

At the time of taking out a mortgage, on a comparative basis, you should expect a fixed rate mortgage to be slightly more expensive than an adjustable rate mortgage. The reason for this is that should mortgage rates increase significantly, with a fixed rate mortgage your payments will remain, as the name suggests, fixed. So for your servicer there is the possibility that they will be receiving less profit than they might have done otherwise. The benefit for you of course is that you know where you stand with regard to payments and can budget on a known factor.

Bear in mind that mortgage rates can also decrease, so if you take a fixed rate mortgage and this happens, then you will have a more expensive loan than you actually needed. All in all it is a judgment call as to which way you think the market will go against how much you value knowing what your monthly cost for the mortgage is going to be.

An adjustable rate mortgage on the other hand follows the market trend and will go up and down in line with market conditions. So this can be good if the trend is downward but that may not always be the case. In fact in current conditions, the likelihood is that before too much longer rates will start to go up again. There are no guarantees that this will be the case, but historically rates are currently about as low as they ever have been.

Other Factors that Affect Refinance Mortgage Rates

• Having a good credit score will help you to secure a decent refinance mortgage rate
• Also having a good deposit to put down. This means the loan is less risky for the lender as there is likely to be more value in the house than the capital outlay of the loan. Therefore more chance to get the money back should the borrower run into trouble
• The last one is a low debt to income ratio, meaning you are more capable of repaying the loan

It’s not really rocket science, all these factors point towards a borrower who is low risk for the lender and consequently they are more prepared to offer a better deal to secure that business.

With respect to finding the best refinance mortgage rates, the best places to look are mortgage comparison sites. You will be able to put in your details and get quotes for various mortgage options. I have provided a link below to a site that does this which you can use as a starting point.

Before you start looking at the actual rates you can get, there is one more point that needs to be made. There is a loan type that is an ‘interest only’ loan, where you only pay the interest on the loan but not any of the capital owed. The intention with this type of loan is that you find an alternative way of paying off the capital of the loan at the end of the loan term.

There is a temptation to rely on the increase in the value of the property to cover this payment, hopefully with some left over to go towards another property. This type of loan on the face of it looks like a less expensive option in terms of the monthly payments, but it is a risky strategy as many people have found out to their cost. The worst case scenario is that the value of the property drops and you cannot clear the capital debt, so after paying for all the interest you can actually end up with negative equity the consequences of which means you could have an outstanding loan amount and no property. You can decide if that is a risk worth taking but you do need to be aware of the potential for this scenario.

Refinance Mortgage Rates

Related Blogs

• Adjustable Rate Mortgage – Is This The Right Type Of Loan For Me? | Home Mortgage New
• Pick the Right Perks for your Adjustable Rate Mortgage | AIO News – Health, Insurance
• Dublin Homeowners – Are You Holding An Adjustable Rate Mortgage — It May Shift To 3 Percent Or Lower | Tips and Techniques for Buying or Refinancing your house in Dublin, Alameda County and the East Bay Area
• Free Missouri fixed and adjustable rate mortgages | Mortgage Rates Calculator
• You Can Get a 2% Fixed Rate Mortgage Through Obama’s Stimulus | Fixed Rate
• Homeowners Face Grim Future on Expiry of Fixed-rate Deals : Clickbank Diary
• Ultimately, drawing the line is a judgment call « Lushhomemedia
• Mortgage Rates in California with Bank of the West | FindLocalMortgageRates.com
• Mortgage Interest Rates-the Current Situation | The Lowest Mortgage Rate

In these troubled times, most people are facing economic uncertainty. They are worried about having the ability to pay their bills. Some of them are looking for a way to simply just lower their monthly payments that are going out. If you are looking for a reputable company that offers mortgage refinance, there are a few things you can do to locate a lender that can help you in your particular situation.

There are many companies out there that you can find that can help you with your home loan. In fact, locating a company that has been around for a long time that can offer you the services you need is actually very easy to locate. The first step is beginning to shop around for a corporation that offers loans on the terms that you are comfortable with.

The best way to find these companies is to begin with the Internet. When you turn on your computer, by simply going to a search engine and typing in the type of mortgage company that you are looking for, several will come up. By choosing a website that offers a comparison of the different companies, you can make an educated guess on which one is best for you.

Websites that offer customer testimonials are even better. You can of course find these on the home pages of the corporations that offer refinance services, but you can truly find out if they are telling the truth sometimes by looking at the genuine responses of other people that are giving a testimonial about their experience after using the company.

As a caveat, it is not recommended that you go to an online forum that offers anyone the ability to login and post nonsense about any company that they want to attack. Make sure that the forum is moderated and that it is focused upon this particular area of interest. Only in this way can you be somewhat guaranteed of reading reliable information.

Before you take the plunge to do any kind of second mortgage or redoing your financing, you need to remember there is a fee that is associated with such an action. This can usually be between 5% and 10% of the actual value of the amount you are taking out so be careful as you may end up paying more than you are now.

The last place to check is the Better Business Bureau to make sure that there are no complaints against the company. You can also see their rating and also how long the company has been in business. By taking all of these factors into consideration, you will be able to make a very educated decision.

Once you have found the right mortgage refinance company for you, go ahead and fill out their application and get the process started. Only by doing your homework ahead of time can you be confident and feel safe that your finances are in the right hands on that soon your payments will be much lower and more affordable.

If you would like more information on finding a mortgage refinance lender, go to: http://www.mortgagerefinancelenderguide.info.

Article Source: http://EzineArticles.com/?expert=Tommy_Hilligan

http://EzineArticles.com/?A-Few-Suggestions-on-How-to-Find-a-Reliable-Mortgage-Refinance-Lender&id=3558067

The goal for the HAMP program is to offer assistance to between 3 to 4 million homeowners who meet the eligibility requirements for the program (see link at the bottom of the page) over a 3 year period, the program ends on the 31st December 2012.

There were 728,000 loan modifications being progressed as of the end of November 2009 with 31,382 having reached the permanent stage.

That said, the expectations are that the program will meet it’s objectives over the coming years and with an average saving of $550 per month for borrowers there are real benefits to be gained. So if you are wondering how can the Obama stimulus help you, then all you need to do is consider how much the refinance incentive is helping real people. 31,382 loan modifications may not sound a lot, but for those people that have reached the conversion stage, on an individual basis, these savings often represent the difference to keeping or losing homes.

So if you need a home loan modification you may want to think about applying, as stated the program is set to run over 3 years and so far only about a 1/3 of the 3 million target have had trial period plan offers extended.

The evidence is showing that people who have converted their mortgages are meeting their payments and that top administrators in the government have recently been putting pressure on mortgage servicers to speed up the program to get more borrowers to the finish line.

The full report is available here Financial Stability and is based on figures made available through November 2009.

The 2 programs available through the Obama refinance package are the  home loan modification program and the home loan refinancing option. Click on the links to find details on the eligibility requirements for each part of the program.

The ‘loan refinancing’ program is due to end by June 2010 which is rapidly approaching, but with average monthly savings of around $150 dollars available it is at least worth checking your eligibility; you will need to move fast however as time is running out.

There is a 3rd option, the Hope for Homeowners program which is due to end on September 30th, 2011. The eligibility for this program is different to the other 2 programs and you should be aware that this program was set up initially during the Bush administration period.

You can follow these 4 steps to getsuitable mortgage loans.

• Check your credit score: At first, you should check your credit score as your mortgage interest rate will depend on it. If you have a good credit score, then it’ll be easier for you to findmortgage loans with suitable terms and conditions. In the present situation(2009), your score is excellent if it is between 750-840. Your credit score will be regarded as a good one if it falls between 660 and 749. Thoughyou will face problems if your score is between 620-659, yet you may qualify for a mortgage loan. However, it will be really difficult for you to get a
  mortgage in this present situation if you have a credit score below 620.

• Assess your financial condition: After you know your credit score, it is the time to examine your financial
  condition. It is one of the most important steps as you need to determine whether or not you’ll be able to afford a mortgage. Even if lenders approve your loan request, you may face problems later if your not able to afford your mortgage payments. It is advisable that you assess whether or not you’ll be able to make payments for the entire loan term. Make sure you take into consideration additional spending, such as, taxes, insurance premiums, homeowners association dues along with other expenses that are rolled into your mortgage payment.

• Shop and compare mortgage rates: While shopping for mortgage loans, you can compare rates offered by individual lenders as well as mortgage brokers. However, lenders usually have limited number of loans. Therefore, it is better if you contact a mortgage broker as they have contact with several lenders. An experienced broker may be able to meet your loan requirements. Make sure that you work with a broker who has been in the business for quite a long time.Apart from this, you should also be careful while selecting a mortgage loan. It is not at all advisable to go for a home loan with the lowest interest rate. You should also take into consideration other factors, (such as, broker fees, loan term, prepayment penalties, etc.) that affect the true cost of mortgage loans.

• Apply for a suitable mortgage loan: This isprobably the easiest step in the overall process. Apply for the loan that matches your requirements as well as the lenders criteria. You should support your loan application with required documentation (as asked by the lender). You may need to provide your bank statements, paycheck stubs, investment earning reports, etc. It is advisable that you hire a professional appraiser to assess whether or not the value of your home is worth your purchase price.

Lenders may not accept specific mortgage loan requests for a number of reasons. It is sometimes really hard to find out why your application is denied. It may be due to the fact that you don’t have the required employment history; it may also happen that could not satisfy the lender’s minimum income requirements. Whatever be the reason, it is always better to ask your lender to give you a written explanation. Under the ECOA (Equal Credit Opportunity Act), lenders are supposed to give you a written explanation when they deny your loan application.

About The Author

Author: Kate Jones is a contributing writer of realestateguidance.org. She
specializes in real estate, mortgage, insurance and credit industry.

Article Source : Articles Directory

Article URL : 4 Essential steps to get a suitable mortgage loan

Article Author : katejones

Reverse mortgage lump sum

The principle behind a reverse mortgage is fair enough, it gives you access to funds without having to sell your house or having to take out another loan against your property for which you would then have to make monthly payments. With a reverse mortgage there are no monthly repayments to make.

But be aware that the mortgage lenders would not be offering the mortgage unless there was something in it for them. In this case what happens is, because you do not make any payments, the capital value of the loan increases year on year as the interest you would have paid is added to the amount you borrowed.

Typically that amount is not allowed to exceed the value of your home so in practice once the current value of your home is equal to the loan amount then no further funds will be available and of course if that happened then there would be funds from the house left as part of your estate. That is of course the worse case scenario but there will always be some cost involved when repaying the loan and the house is the security for that loan so the loan company get first dibs.

Repayment of the loan and any other associated charges are made either when the last remaining occupant of the house dies, if you sell your house or if the house ceases to be your primary residence (the latter is usually a requirement to secure a reverse mortgage in the first instance)

Eligibility for a reverse mortgage

• All owners of the house have to agree and be prepared to sign the loan papers
• All of the borrowers entering into the loan agreement must be a minimum of 62 years of age
• Normally owners must be using the house as their primary residence
• Typically the home is a single one unit dwelling, but other types of permanent property will be considered

You are still the owner of your home and are responsible for its upkeep, any taxes and insurance. These will all need to be properly maintained as a condition of the mortgage. You should also be aware that once you are in possession of the funds from the property, whether that is in the form of a lump sum, monthly payment or on a requested cash release basis, this may affect or cause you to loose any benefits you are currently receiving. This aspect of the decision must be carefully examined to ensure that you are not worse off as a result of taking out the mortgage.

Sometime the loans can be secured via ‘public sector’ arrangements, maybe for a property repair or to pay taxes, this is a much cheaper option than taking out a private reverse mortgage in terms of the charges and interest paid, but with the private sector loans you can use the money as you wish. The largest cash advances tend to come from HECM (Home Equity Conversion Mortgages) which are federally insured but funded through the ‘private sector’. However the amount of cash you get is very much dependent on the plan you go with and the associated terms and conditions which can vary widely.

There are a number of different costs involved with initially setting up the mortgage but these costs can normally be added to the loan amount. Don’t forget though that you will be paying interest on the full amount loaned including any added costs. So make sure you ask for and get a detailed breakdown of all costs involved and how much that amounts to so that you know what will be added to the loan.

The calculator below uses the HECM reverse mortgage rates as a basis and will give you the results based on an adjustable rate mortgage (ARM) and a fixed rate mortgage so you can compare the two.

Reverse Mortgage Calculator

Reverse Mortgage Calculator

Whatever the reason you still need to know the advantages, the consequences and where there are potential pitfalls. Watch the video below to see if refinancing your mortage is an option you need to pursue.

Part of the acceptance criteria for mortgage refinancing under the ‘make home affordable’ plan was that the new mortgage could not exceed the current value of your home by more than 5% (i.e. 105% ).  That has proved to be a number that was not a workable level and so the criteria has been extended to 125% recently so that more people qualify.

Although this is a more practicable acceptance criteria in the spirit of the program, the level is getting a little scary in terms of the loan to value ratio and is starting to smack of what got us all in this mess in the first place. At the end of the day the intention is that the repayments need to be sustainable and the loan ultimately needs to be paid off.

For that reason I suspect that this will be the only increase that will be done so if you still don’t qualify I wouldn’t hold my breath, you may have to wait until house prices rise again to see yourself in line for the program and right now who knows when that will be for sure.

Obama’s Stimulus Package has 2 main components:

1. Refinance

2. Loan Modification

Let us discuss each one of these components in detail:

1. Home Refinance Stimulus Package

· In this program the two most powerful mortgage lending agencies of the government Fannie Mae and Freddie Mac would refinance the home loans of all the owners who owe much more amount to the bank than the actual value of the house. The only condition for this package is that the mortgage must be a guaranteed one by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount, you can gain advantage of the program.

· But there is one major condition joined with refinance stimulus package and that is; the offer is only valid for the properties which are used for residential purpose. Any property which is lying like a building and no one is living inside, will not qualify for Obama’s home refinance stimulus package.

2. Loan Modification Stimulus Package

· There have been special incentives that Obama’s government is going to provide to all the lenders for doing loan modification on the existing home loans of the borrowers. According to this program, the homeowners can get rid of foreclosure by getting it done. The main features of this program would be; interest rate would be reduced and it can go down to 2% only, tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.

· With loan modification, lender will also take care of the total monthly payments that a borrower is making and it would not increase than 31% of the total monthly gross income.

To know more about Home Refinance Stimulus Package and to check if you qualify

Click Here –> Loan Modification Help

President Obama has offered $1000 incentive for home owners that opt for Loan Modification instead of Short Sale Or Foreclosure.

To know more about Latest Loan Modification Programs and to check if you qualify for Government Grants

Click Here –> Federal Grant For Homeowners

FREE Trials are for a limited time only, so get yours today.

Article Source: http://EzineArticles.com/?expert=Luke_Cambell
http://EzineArticles.com/?Home-Refinance-Stimulus-Package—Obamas-Stimulus-For-Mortgage-Refinancing-and-Loan-Modification&id=2213316

One thing you should know for sure is that there are differences between the mortgage refinancing program from Obama’s initiative “Making Home Affordable’  and an earlier initiative that came from George Bush  the ‘Hope for Homeowners’ program.

Hope for Homeowners Program

This program is administered by the Federal Housing Administration and its key features are as follows:

• Mortgage is fixed rate and can be taken over a period of 40 years (recently extended from 30 years)
• Refinancing provides the possibility of reducing monthly repayments
• The agreement is entered into voluntarily by both lender and borrower

To be eligible for this loan certain criteria needs to be met:

• The house must be your primary place of residence and you should have no interest in other residential properties
• Your mortgage must have been in place before January 1st,2008 and you must have made at least 6 monthly payments
• You must be is a situation where you cannot make your current mortgage payments without assistance
• You cannot have been convicted of a fraudulent offense in the last 10 years, obtained a mortgage off the back of false claims or deliberately failed to make a payment on a debt
• You must maintain a full record and documented evidence of income and employment
• You have to be prepared to share the positive equity in your home, both current value and any future increases
• Your total mortgage payments, including capital repayments, interest and insurance will have been more than 31 % of your gross income from March 2008.

Constraints and payments:

• the loan to value ratio of your house can be no more than 96.5% (recently increased from 90%) on the understanding that your total mortage payments can be no more than 31% of your gross income and your total debt repayments can be no more than 43% of gross salary for equivalent time periods (e.g. monthly). This can be increased to 38% and 50% repsectively if the loan to value ratio is 90% or less.
• the interest rate will be based on current market rates and agreed between you and the lender
• there will be an initial mortgage insurance payment of 3% after which you will pay a 1.5% mortgage insurance premium as part of your monthly payments.
• You will also be required to pay closing costs on the loan, for an idea of what these costs will be you will be provided with a best estimate at the time of taking out the new loan.
• if you have a second mortgage and want to take out another mortgage under this program you will have to wait 5 years from the start of the first loan.
• This program ends on September 30th, 2011

These are the key features of this program, to find out further details and information you can talk to a FHA approved lender or a housing counselor.

Making Home Affordable

This program was introduced by Obama to try and get the American housing market back on line and the key features are as follows:

• there are 2 aspect to this initiative, mortgage refinancing and loan modification, it is the mortgage refinancing aspect that is comparable to the ‘HOPE for homeowners’ program which is why this is the aspect we will be looking at here. Refer to my previous post for ‘loan modification.
• Anyone who has an existing mortgage that is owned or guaranteed by Freddie Mac or Fannie Mae can be considered for mortgage refinancing  providing they meet the additional qualifying criteria.

Qualifying criteria for the ‘Making Home Affordable’ mortgage refinancing option:

• you have to be the owner of a 1 to 4 unit home
• your mortgage payments must be up to date (no more than 30 days late on a payment in the previous 12 months)
• your loan amount cannot exceed more than 125% of your house valuation (recently increased from 105%)
• you must be in a position where you can afford to make the repayments on the new loan albeit they should be lower than your current loan (this refers to a change in circumstance since you took out your current loan e.g. you may have lost your job and consequently income)
• refinancing improves the affordability or long term stability of your loan

Constraints and payments:

• Points and fees will be advised by the lender in accordance with their terms
• Interest will be set at market rates around the time of the loan.
• Anyone who is considered to be delinquent or has exceeded a  30 day late payment period more than once in the last 12 months will not be eligible
• Mortgage insurance is required only if your current loan includes private insurance
• The monthly payments by default will include an allowance to cover taxes and insurance.
• This program ends in June 2010

You are entitled to free advice from your lender or a HUD approved housing counselor for the ‘Making Home Affordable’ program never pay anyone for this service.

Technorati Profile