If you have an underwater mortgage, i.e you owe more on the mortgage than the home is worth, you can still refinance your underwater home. Some underwater homeowners with government-backed mortgages might be able to refinance through federal programs, such as the Home Affordable Refinance Program.
Lenders or Underwater Mortgages
The Home Affordable refinance program or HARP is US government backed program and it is only provided through government lenders.
- Fannie Mae
- Freddie Mac
Those looking to refinance through programs offered by Fannie Mae and Freddie Mac, the government buyers of home loans, will first need to find out who holds or services their mortgage so they can determine whether they qualify.
If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program, or HARP. Some 2.5 million to 3 million homeowners may be eligible to use HARP, according to government estimates — provided, among other things, that they have not been late on their payments more than once in the last 12 months.
Be carefull when trying to get underwater mortgage refinance
Apart from lenders such as Fannie and Freddie other banks have come up with underwater mortgages refinancing option. But be careful when dealing with them because they might take advantage of your situation to give you a bad deal.
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Mortgage statistics show roughly 11 million U.S. homeowners — about 23 percent of Americans with a mortgage — are underwater. What this means is the owners owe more on the mortgage than the home is worth.
How Underwater home owners Can Get Help
Some underwater homeowners with government-backed mortgages might be able to refinance through federal programs, such as the Home Affordable Refinance Program.
Conditions For Refinancing Underwater Mortgages
- If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program.
- Underwater mortgage finance is limited to those who have lost no more than 10 percent of their home’s equity.
- Underwater homeowners must also have not been late on their payments more than once in the last 12 months
It’s tough to refinance a loan these days, but don’t be disheartened. If your home is already underwater you have nothing to lose by talking to your lender. After all, talk is cheap!
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When borrowers run into financial distress and they can’t keep up with mortgage payment they make the mistake of using the services of Foreclosure prevention companies.
Avoid Foreclosure Prevention Companies
You don’t need to pay foreclosure prevention companies fees for foreclosure prevention help–use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.
Worse still some of these companies purporting to stop your foreclosure immediately have been outed as scams.
It is a risky option to seek the services of a foreclosure prevention company.
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If you are having trouble keeping up with your mortgage payments and your lender has sent you a notice to contact them be careful because if you ignore the summons, your lender could begin the foreclosure process and soon you might be out of your dear house.
Tips & Advice for Avoiding Foreclosure.
Don’t ignore letters from your mortgage lender
Contact your lender as soon as you run into financial difficulties.
Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses–cable TV, memberships, entertainment–that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.
Sell some Assets. A car, Jewelery, Stocks etc. Sell them to raise money to pay off part of the mortgage balance.
Once you have reviewed your expenses present your mortgage lender with a clear repayment plan.
But if you are in a serious financial distress and your mortgage lender has already issued notice for foreclosure then follow the next steps.
Know your mortgage rights Learn about the foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office. It is the only way you can know the legal options that you have.
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Mortgage Bankers Association’s economic forecast for 2011, released Tuesday at the group’s annual convention in Atlanta.
The group predicts rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to a 4.7% average in the first quarter of 2011, and climbing to 5.1% by the end of next year. That’s barring any “blockbuster” announcement from the Federal Reserve next month, said Jay Brinkmann, chief economist of the MBA.
Source Market Watch online
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A reverse mortgage is a loan available to senior citizens above age 62. What happens is that the equity in a home is used to give a loan. The loan provides the borrower with an income stream. The loan amount paid out in a steady stream of payments or in a lump sum like an annuity.
What happens is that the Senior citizen gets an income to live on in his sunset years while the bank now owns the home. The reality of the situation will come clear when the borrower dies. The beneficiaries of the deceased estate will only be entitled to any equity that is left after all of the cash from the deceased’s estate has been used to pay off the mortgage. Sounds scary!
Risk & Disadvantage Of Reverse Mortgage
- Reverse mortgage is expensive because a borrower has to pay high upfront costs e.g. origination fees, mortgage insurance, appraisal fees & attorney fees.
- The borrower loses full ownership of their home.
- The family is left with a mess to deal with when the borrower dies.
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An adjustable rate mortgage is a mortgage that starts you off with a low interest rate for the first two to five years. After two to five years the interest rate resets to a higher market rate. But borrowers can just take the equity out of their homes and refinance to a lower rate once it resets.
Advantages Of Adjustable Rate Mortgage
They allow you to buy a larger house than you can normally qualify for and have lower payments that you can afford.
Disadvatage & Risk of Adjustable Rate Mortgage
When housing prices drop, borrowers tend to find that they are unable to refinance their existing loans. This leaves many borrowers facing high mortgage payments that are two to three times their original payments.
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Taking a mortgage to buy a home can come with tax advantages that mortgage owners can take advantage off to lower their tax bill.
1. Interest on a mortgage is usually tax deductible. You can deduct the mortgage interest from your income taxes.
2. You’ll get a tax break on capital gains–if any–when you sell.
3. These tax breaks means taking that mortgage will costs you less, often a lot less, than renting.
For more information consult a tax attorney or accountant for specific details.
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In an interview with CNNMoney website Pat Lashinsky, CEO of national mortgage brokerage ZipRealty shared some ideas on how to boost the value of your house and be able to sell it at the highest price possible.
Pay a few hundred dollars to get your house inspected before you put it on the market. Then arrange to make any necessary repairs yourself. (In most states the law requires you to disclose to potential buyers any defects of which you’re aware.) “Taking care of any inspection issues upfront helps sellers limit the points that buyers can negotiate on,” says Pat Lashinsky, CEO of the national brokerage ZipRealty.
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If you’re ready to purchase a new home or refinance your existing mortgage you can get online mortgage quotes for the lowest interest rates and lowest total cost mortgages.
The best way to find the lowest mortgage rate is to compare lenders loan terms with those of others online. The following websites provide services for online mortgage quotes.
American Lender Resource
“one-stop shopping” for consumers seeking lenders with the knowledge and information they need to make the best home financing decisions for themselves and their families. Visit Website American Lender Resource
Mortgage Quotes
A detailed website providing a section for advice and articles. Visit website Mortgage quotes
Shoprates
Another well designed website packed with ton of information to help you naviagate around the mortgage market. Visit their website shoprates
Zillow Mortgage Marketplace
The best place to shop mortgage quotes anonymously. Visit website Zillows
Loan Network
It is not just about mortgage loan, they also provide quotes on student loans and auto loans. Visit site Loan Network
UK Online Mortgage loan quotes
Mortgage Quotes UK Visit site Mortgage quotes
Go Direct UK. Visit site GO Direct
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