With all of the home foreclosures taking place across the country, many people may feel that it is not a good time to refinance. This is actually not true. Lenders want to keep people in their homes because of the expenses they incur when they try to sell a foreclosed home. Most times, they will actually take a bit of a loss. If you are considering refinancing for a better rate or to clean up any outstanding debts, there are many reasons why this is a good time to refinance your mortgage.
Mortgage refinancing is when you take a second mortgage to pay off the first mortgage and possibly consolidate debt under one loan. Like the first mortgage, it is secured against your home. Today, because of the current market conditions, lenders are offering interest rates at record lows. A record low rate could reduce your monthly mortgage payments by hundreds of dollars. As well, a fixed interest rate will not be affected by any down turns in the economy.
Another benefit of refinancing your mortgage is President Obama's mortgage refinance stimulus plan. His plan has allowed millions of mortgage owners the opportunity to refinance their mortgage at a low fixed rate in order to get out of financial hardship caused by the housing crisis and a decline in the economy. If you are having trouble paying your current mortgage or you are seeking to refinance for a better rate, President Obama's plan may be the solution for you.
Highlights of the Homeowner eligibility requirements as outlined in the President's "Home Affordability Plan" include:
- The house that will be refinanced must be the principal residence.
- The amount remaining on the mortgage must be for less than $729,500 - Income must be verified through tax returns or pay stubs.
- Homeowners must provide a handwritten and signed letter of "Financial Hardship"
- The mortgage loan must be through Fannie Mae or Freddie Mac
- If monthly debts exceed 55% of the homeowner's gross monthly income, the homeowner must get credit counseling.
There have been special incentives that President Obama's government has provided all lenders for performing loan modifications on existing home loans. Banks and mortgage lenders can now offer the following highlighted benefits as outlined in President Obama's "Home Affordability Plan:"
- The bank or mortgage lender can lower monthly mortgage payment to 31% of one's gross monthly income. - Home interest rates can go as low as 2% in order to meet the Obama plan guidelines. The 2% and 4.5% mortgage interest rates are adjustable after a 5 year period - Home loan modification fees will be paid by the Government as part of the Home Affordability Plan.
- Incentive plans are available to reduce the homeowner's principal over 5 years, up to a maximum of $5,000.
Mortgage refinancing has always been a popular method of getting better rates and consolidating debt. According to the Mortgage Bankers Association, "the average interest rate on a 30-year mortgage in April was 4.76 per cent." Because of President Obama's new mortgage refinance stimulus plan, as well as lenders offering record low interest rates, this is a great time for you to refinance. It could save you hundreds of dollars a month.
by Amy Nutt
5 comments:
In regards to the Presidents Mortgage Stimulus Plas her is the link to the Making Home Afforbale Program: http://www.makinghomeaffordable.gov
Here are the links to Fannie and Freddie to see if you loan is thru one of these Government Sponsored Entities
http://loanlookup.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/
The Mortgage Rates being offered will vary sightly from banks to banks. So Make sure you compare at least 3 different lenders.
Gene
Voyage Home Loans
If your loan is owned by Freddie Mac or Fannie Mae, as most are, you may be able to refinance through the Home Affordable Mortgage Program, or HAMP. This program was specifically designed to enable those homeowners with no equity to refinance their mortgages to a more affordable interest rate. Refinance
Seeking to attain a Home Refinance Loan without actual reason is without a doubt, a wasted effort on any homeowners behalf. Yet, on the other hand, if there are definitive grounds and specific circumstances calling for a home refinance loan pursuit then it's wise to go head and motion for a mortgage refinancing, as soon as you can.Home Refinance Loan
A Equity Home Refinance may be a great way to go right now, before rates go up. Over the last few years everyone has heard about friends and family refinancing their home mortgage. Well, you may also know that the interest rates going back up.Equity Home Refinance
While the housing industry is slowly recuperating from the crisis, it's a good time for people to refinance their mortgage. It would be especially advisable if they do so at a time when the interest rate is better than the time when they applied for it.
Randy Robinson
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