Need Mortgage Refinance

One of the first things to consider when you want to make a property purchase is exactly how much you can afford to pay out, in total, on a monthly basis for a home loan mortgage. This sounds fairly straight forward and it is, as long as you actually consider all the costs involved.

It is much easier for someone who has actually gone through the process of either making their first purchase or have managed to arrange a home loan mortgage refinance; because they will at least have a reference back to the costs they incurred along the way. But if you are in the situation of being a first time buyer there are a few things you need to think about, because if you do not know about certain costs you may be forced into a position of borrowing more money than you intended to.

So what are the costs involved when taking out a home loan mortgage:

• Application fees
• Loan origination fee
• Home inspection and appraisal costs
• Points, these are paid on a once only basis usually to reduce ongoing interest costs
• Legal fees for the handling of the purchase (and sale if you are selling a previous home)
• Annual property taxes
• Repairs, remember when you own it you fix it
• House and contents insurance, contents you may be used to but now you will need to protect your house against damage or potentially complete loss, a house fire for example

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If you are having trouble keeping up with your home loan mortgage repayments you are likely to receive a letter from your lender asking you to get in touch.

If you are serious about avoiding foreclosure the worst thing you can do is ignore the letters and the problem. The more payments you miss the more difficult it will become to resolve the problem and loosing your house will become more likely.

So make sure you contact your home lone mortgage lender as soon as you become aware that you have a problem. There will be options available to you to help you through your financial difficulties and mortgage lenders really do not want your house, they would prefer that any financial problems are resolved. Some of the options are home loan mortgage refinancing and loan modification but there may also be alternative options.

Open and read all correspondence from your lender, apart from anything else the information provided may include suggestions for avoiding foreclosure. You are also likely to have any proposed legal actions against you outlined and you need to be aware of these, not opening your mail cannot be used in your defense or as an excuse if you end up in court.

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There has recently been a change to home loan mortgage refinancing under the ‘Make Home Affordable’ program regarding property value.

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.