What to do When You Find Yourself Behind on Mortgage Payments
Because there have been so many mass layoffs, job losses, and decrease in hours and pay in the past year and a half, many people, especially Americans, are finding themselves struggling to make ends meet month to month. Many homeowners especially are finding that they are behind on mortgage payments or are in danger of falling behind soon if they don’t do something about it immediately. The stress that arises from this terrible situation is enormous and can lead to many negative side effects like strained relationships, bad credit, reduced quality of life, and even medical conditions such as high blood pressure and headaches. Since most couples will argue mainly about money you can imagine the effect it will have on the kids. But there is help and it is very important to know exactly what to do if you find yourself falling behind on mortgage payments.
If you anticipate a shortfall or if you find that you just cannot make a payment, you need to immediately contact your lender. Talking to your lender is a good thing and may buy you some time or they may tell you that you may qualify for a loan modification or a loan forbearance. Customer service reps always tell you the same thing and that is to make sure that you stay in constant communication with them in case you get behind.
A loan modification is an adjustment made by the investor or lender to the terms of your existing loan. This is not a new loan or a refinance. Once the loan is modified it should decrease the monthly payment and give relief to homeowners that find themselves behind on mortgage payments. Many times a loan modification will include principal reduction or an increase in the number of years that the loan term extends to. For example, the lender may take a thirty year loan and extend it to a forty year term, thus reducing the payment amount each month and giving much needed relief to borrowers strapped for cash.
Another way to find relief for homeowners who fall behind on mortgage payments is to apply for a loan forbearance. This is a type of legal agreement between you and your lender and may give you the opportunity to stop making payments for up to six months without the danger of possibly losing your home. Usually these forbearance agreements are for a borrower’s principle residence and not for rental properties but there have been some exceptions. It really all depends upon the investor and whether they will approve it or not.
The best way to apply for a loan modification or forbearance is to hire a reputable, professional loan modification company that specializes in these sorts of negotiations. If you go directly to your lender you run the risk of being declined and having to re-apply, which is not always allowed. You may have to pay a fee to these specialists but you will make up for it in time and money saved.
These are two effective ways of finding relief when you fall behind on mortgage payments. The most important thing is to not get too stressed out and realize that there is help available.
Sunday 30 May 2010
Wednesday 26 May 2010
A 15 Year Fixed Mortgage Rate Loan can Pay Off Your Home Faster
If you make enough money and are willing to make a larger mortgage payment each month, then you might want to take a look at a 15 year fixed mortgage rate loan.
15 year fixed mortgage rates are always about a half point lower than 30 year fixed mortgage rates. For example, if 30 year fixed mortgage rates are at 5%, then you can expect 15 year fixed mortgage rate loans to be around 4.5%.
In the first ten years of any mortgage loan, you are paying almost all interest. For example, on a mortgage loan of $200,000 at a fixed rate of 5% on a 30 year term, your fully amortized (principal and interest payment) will be $1073. Of that $1073, $833 is the interest payment.
That means that only $240 of that $1073 payment goes towards principal. As the fully amortized loan progresses, more and more of the payment will go towards paying down the principal loan balance, but you can see that by paying so much interest for so many years, you end up paying quite a bit more.
In the previous example, the total finance charge (interest paid) will actually total more than $219,000 over the 30 year period. So for a $200,000 loan you will actually end up paying $419,000.
The same $200,000 home loan at 4.5% interest rate (remember, half a point less) for a 15 year fixed mortgage rate term instead of 30 year term will mean a monthly payment of $1530. Of that $1530, only $750 will go towards interest while the remaining $780 will go directly towards principal.
This means that over the course of the 15 year fixed mortgage rate loan term, you will only pay $93,000 in finance charges (interest). That is $116,000 less than the 30 year loan.
Do you think that you could spend $116,000 on something else instead of your home loan?
The other big positive effect of paying your mortgage quicker with a 15 year fixed mortgage rate loan is that you end up building valuable equity. Equity is the difference between what you owe and what the home is worth.
Assuming that the $200,000 property you purchased fifteen years ago is now worth $300,000, you will be able to accrue a total equity of $300,000 by paying off your loan quicker. This all gets added to your net worth and will serve you well when you retire or if you decide to leverage your property at a later date.
15 year fixed mortgage rates are always about a half point lower than 30 year fixed mortgage rates. For example, if 30 year fixed mortgage rates are at 5%, then you can expect 15 year fixed mortgage rate loans to be around 4.5%.
In the first ten years of any mortgage loan, you are paying almost all interest. For example, on a mortgage loan of $200,000 at a fixed rate of 5% on a 30 year term, your fully amortized (principal and interest payment) will be $1073. Of that $1073, $833 is the interest payment.
That means that only $240 of that $1073 payment goes towards principal. As the fully amortized loan progresses, more and more of the payment will go towards paying down the principal loan balance, but you can see that by paying so much interest for so many years, you end up paying quite a bit more.
In the previous example, the total finance charge (interest paid) will actually total more than $219,000 over the 30 year period. So for a $200,000 loan you will actually end up paying $419,000.
The same $200,000 home loan at 4.5% interest rate (remember, half a point less) for a 15 year fixed mortgage rate term instead of 30 year term will mean a monthly payment of $1530. Of that $1530, only $750 will go towards interest while the remaining $780 will go directly towards principal.
This means that over the course of the 15 year fixed mortgage rate loan term, you will only pay $93,000 in finance charges (interest). That is $116,000 less than the 30 year loan.
Do you think that you could spend $116,000 on something else instead of your home loan?
The other big positive effect of paying your mortgage quicker with a 15 year fixed mortgage rate loan is that you end up building valuable equity. Equity is the difference between what you owe and what the home is worth.
Assuming that the $200,000 property you purchased fifteen years ago is now worth $300,000, you will be able to accrue a total equity of $300,000 by paying off your loan quicker. This all gets added to your net worth and will serve you well when you retire or if you decide to leverage your property at a later date.
Tuesday 25 May 2010
Online Mortgages Will Give You The Best Options Available
Whether you are buying a new home, or just want to refinance the property you already own, checking out online mortgages will give you the best options available. The term mortgage applies to the loan that is taken out when buying a house or some type of real estate property. Online mortgages are loans that you get on the Internet instead of driving to the local bank.
Since the number of banks and financial opportunities that you can access easily from your computer is so much greater than the number of banks in your hometown, you are able to shop around and find the best online mortgages to suit your needs. You are no longer stuck with only a few choices. Online mortgages are available at thousands of sources.
With so many banks and mortgages available online, they actually compete with each other to fill your needs. This may include lower finance rates, locked in rates, special incentives and quick approvals. Online mortgages are much more convenient than spending all that time in a bank and still having to wait for your money.
Do not feel intimidated by the number of websites offering financing. Remember it is to your benefit to have so many options. So how should you go about narrowing down those options to find the best for you? The first hint is not to spend time on sites that do not price the type of loan you are looking for. Ease in usage is one of the best features of a good site offering online mortgages. The most popular sites show some price functionality, provide varied potential transactions, and show all closing costs.
Look for options that are priced beyond 15 and 30-year fixed rate conventional loans. Check out different types of ARM’s, balloon loans and FHA/VA loans if you are eligible. It never hurts to ask. Do make sure to look for full disclosure on the features of the ARM. Look for sites that allow you to enter the amount of the down payment you are willing to pay. Some online mortgages sites will allow the down payment amount to be less than 5 percent. They are out there!
The best sites to choose will show all settlement costs. Lender fees should be listed separately, and make sure the lender fees are guaranteed. You should also check to make sure the price of any of the online mortgages includes the appraisal, the credit report and all of the third-party fees.
The final points to look for when searching for potential financing sources are sites which price online mortgages with multiple combinations of interest rates and points, as well as no-cost loans. Try to find sites that allow the user to fully document their income and assets. This will help you get the best bang for your buck.
Since the number of banks and financial opportunities that you can access easily from your computer is so much greater than the number of banks in your hometown, you are able to shop around and find the best online mortgages to suit your needs. You are no longer stuck with only a few choices. Online mortgages are available at thousands of sources.
With so many banks and mortgages available online, they actually compete with each other to fill your needs. This may include lower finance rates, locked in rates, special incentives and quick approvals. Online mortgages are much more convenient than spending all that time in a bank and still having to wait for your money.
Do not feel intimidated by the number of websites offering financing. Remember it is to your benefit to have so many options. So how should you go about narrowing down those options to find the best for you? The first hint is not to spend time on sites that do not price the type of loan you are looking for. Ease in usage is one of the best features of a good site offering online mortgages. The most popular sites show some price functionality, provide varied potential transactions, and show all closing costs.
Look for options that are priced beyond 15 and 30-year fixed rate conventional loans. Check out different types of ARM’s, balloon loans and FHA/VA loans if you are eligible. It never hurts to ask. Do make sure to look for full disclosure on the features of the ARM. Look for sites that allow you to enter the amount of the down payment you are willing to pay. Some online mortgages sites will allow the down payment amount to be less than 5 percent. They are out there!
The best sites to choose will show all settlement costs. Lender fees should be listed separately, and make sure the lender fees are guaranteed. You should also check to make sure the price of any of the online mortgages includes the appraisal, the credit report and all of the third-party fees.
The final points to look for when searching for potential financing sources are sites which price online mortgages with multiple combinations of interest rates and points, as well as no-cost loans. Try to find sites that allow the user to fully document their income and assets. This will help you get the best bang for your buck.
Wednesday 19 May 2010
30 year mortgage rates are at a very competitive level right now, really almost at a 40 year low.
It seems that current 30 year mortgage rates are at a very competitive level right now, really almost at a 40 year low, and so it is an ideal time to refinance your home or business and get the cash needed for new construction or other projects.
With current 30 year mortgage rates being what they are, you really can not afford not to get a 30 year mortgage on your home for any one of a number of purposes.
When I saw what current 30 year mortgage rates were at, I immediately began thinking of the deck that I have dreamed of building on the back of my house for years – that spacious pation where I could have barbecues, concerts, and just oodles of good times if I only had the money and time to get it built, so that I immediately mortgaged my house and set about building my dream.
Taking advantage of current 30 year mortgage rates, I was able to actually save money off my previous mortgage and use that money to begin work on my many fantastic projects which I had dreamed of building.
The deck, of course was the first, and I immediately had all of the money which I needed to get the supplies to construct the thing from exploiting the advantageous current 30 year mortgage rates. I was also helped by the existence of a tool lending library in my community.
A tool lending library is a community service which functions much like a normal library, where anyone who wants to can borrow supplies to fix or refurnish their house, or car or other major project for free. If you use the tool lending library, be careful, as fees for late returns are often steep.
So, after borrowing a cement mixer, saws, blades, a steamer, and several other various implements of construction, I was ready to start building my deck. First, I laid the concrete supports so that it could be elevated off the ground.
Then, I built a framework out of rugged unfinished lumber – it didn't have to look too nice as it wouldn't be in public view, but it was strong and did the trick. Finally, I laid the planking on top of it.
This was the most difficult part, and took the longest. But once I added railings, varnish, and double checked everything for safety, I was ready to go. Now I have barbecues out there every week, and I could never have done it if I hadn't re-mortgaged my house.
With current 30 year mortgage rates being what they are, you really can not afford not to get a 30 year mortgage on your home for any one of a number of purposes.
When I saw what current 30 year mortgage rates were at, I immediately began thinking of the deck that I have dreamed of building on the back of my house for years – that spacious pation where I could have barbecues, concerts, and just oodles of good times if I only had the money and time to get it built, so that I immediately mortgaged my house and set about building my dream.
Taking advantage of current 30 year mortgage rates, I was able to actually save money off my previous mortgage and use that money to begin work on my many fantastic projects which I had dreamed of building.
The deck, of course was the first, and I immediately had all of the money which I needed to get the supplies to construct the thing from exploiting the advantageous current 30 year mortgage rates. I was also helped by the existence of a tool lending library in my community.
A tool lending library is a community service which functions much like a normal library, where anyone who wants to can borrow supplies to fix or refurnish their house, or car or other major project for free. If you use the tool lending library, be careful, as fees for late returns are often steep.
So, after borrowing a cement mixer, saws, blades, a steamer, and several other various implements of construction, I was ready to start building my deck. First, I laid the concrete supports so that it could be elevated off the ground.
Then, I built a framework out of rugged unfinished lumber – it didn't have to look too nice as it wouldn't be in public view, but it was strong and did the trick. Finally, I laid the planking on top of it.
This was the most difficult part, and took the longest. But once I added railings, varnish, and double checked everything for safety, I was ready to go. Now I have barbecues out there every week, and I could never have done it if I hadn't re-mortgaged my house.
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