7 Tips for Mortgage Loans and Refinancing
Financial expert Ethan Ewing, president of Bills.com, shares seven tips for mortgage loans and refinancing. If keeping your home and achieving financial security is your goal, then you don’t want to miss Ewing’s money and mortgage tips!
“While it’s painful to face losing your home,” he says, “The earlier you start addressing a potential problem, the more options you will have available to find the solution that is best for your financial future.”
For more info on mortgage loans and refinancing, click on the book cover Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Finance by Carolyn Warren. And, read on for Ewing’s tips for mortgage loans and refinancing…
7 Tips for Mortgage Loans and Refinancing
1. Determine if you qualify for Hope for Homeowners. The Hope for Homeowners program, initiated by the U.S. Department of Housing and Urban Development (HUD), helps certain homeowners refinance their mortgages into a 30 or 40-year mortgage to avoid foreclosure. Homeowners must have originated the existing mortgage before Jan. 1, 2008. The existing payment must exceed 31% of the homeowner’s gross income. For more info, visit the Hope for Homeowners website.
2. Refinance the loan. In the past, one option would be to refinance the mortgage for a lower interest rate and/or lower monthly payment. In today’s credit market, refinancing is much more difficult, especially for people who have late payments on their credit file, unstable income or whose houses have declined in value. If you are clear of these issues, contact a trusted mortgage lender or broker to determine your refinancing options. This tip for mortgage loans and refinancing involves learning about current rates: check online rate comparison sites and using online calculators to determine the real costs of refinancing (try the online calculators at Bills.com).
3. Inquire about forbearance. For temporary hardship – for instance, an earner has an unusual, seasonal or otherwise-temporary loss of income – lenders might grant a forbearance agreement to lower or eliminate some payments. This tip for mortgage loans and refinancing may require humility, but it may be worth it to achieve your long-term financial goals.
4. Consider loan modification. A loan modification seeks a permanent change to the loan, such as lowering the payment and extending the loan’s term, or incorporating any delinquencies into future payments. This is an increasingly popular option for homeowners grappling with unaffordable mortgage payments, and many lenders will attempt to make an affordable monthly payment plan for some borrowers. For more info about this tip for mortgage loans and refinancing, go to Hope Now – it’s an alliance among counselors, mortgage companies, investors and other mortgage market participants formed to help homeowners.
5. Sell your home. Selling our home may not be ideal, but it is a way to avoid foreclosure proceedings on the house and repay the lender. Today, some homes are worth less than the mortgage amount. These cases might require special permission from the lender to sell the home at a loss (known as a “short sale”) for its current value.
6. Obtain a “deed in lieu” of foreclosure. A “deed in lieu” essentially allows the borrower to return the title or deed of the property – giving the home back – to the mortgage holder to avoid foreclosure. The borrower forfeits any equity in the property, but does not have a foreclosure on his or her credit record.
7. Be wary of so-called equity skimmers. This tip for mortgage loans and refinancing involves you being very cautious about your financial decisions. “If you face foreclosure, you will probably receive solicitations from companies looking to ‘help’ you prevent foreclosure by offering to sell your home for you or by taking ownership of your home,” says Ewing. “In most cases, these solicitations are scams trying to take advantage of people in difficult situations. Instead, work with a trusted lender, broker and/or a realtor.”
What are your tips mortgage loans and refinancing? Do share below – we need all the help we can get!
Based in San Mateo, Calif., Bills.com is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages, and and other loans.
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