All posts by Sirena Hurley

Mortgage Finance

How could you smartly refinance your home loan in 2011?

As the mortgage rates keep on fluctuating, there are many homeowners who are confused about whether to refinance their home loan and save a considerable amount of money. If you too are going through dire financial straits and are unable to arrange the high monthly payments on your current mortgage loan, you can certainly seek help of a refinance loan. Getting informed about the present refinance rates is very important before taking a plunge into the refinance bandwagon. A small mistake could cost you dollars in the long run. Therefore, you need to know about the vital steps that you need to take to refinance your mortgage loan in 2011.

1.Know your home value and compare it to what you owe on the home loan

While you’re about to consider a refinance, you must be having a clear idea of the how much money you owe on your house. If you still do not remember, you can check the last statement from the mortgage company. As you come to know this amount, you need to determine how much your house if worth. You may ask a real estate broker to get to know about the average estimate of your house. Divide the home value by the amount you owe on the home loan and see what percentage of the home value you owe to the lender. This will be your loan to value ratio which is necessary before refinancing your mortgage loan.

2.Determine whether or not you have any other lien

The second thing that you need to determine is whether or not you have a second lien that is a home equity loan or a line of credit. If you have, you can add that amount to the main mortgage loan. As you get the total amount, you need to divide it by the estimated value of the home. This will help you determine the total loan to value ratio and use it to calculate the amount that you need to pay to your lender. Also calculate the monthly payment that you require paying and check your affordability so that you do not default on your refinanced loan.

3.Call your lender and know the current refinance rates

As you’re done with your calculation, you must call your lender and ask for the refinance rates. Though you can make an online search to get the present mortgage rates, yet you must also check whether or not the lender is true to his business. Call your lender and negotiate regarding a refinance loan. Check the interest rates, repayment term and the monthly payments so that you can evaluate whether or not you’ll be easily able to make the repayments.

Thus, if you’re a prospective homeowner for refinancing your home loan, get to know the current refinance rates so that you can strike the best deal while refinancing your home loan. Make sure that you do not default on your monthly payments after refinancing and help maintain your credit score.

Home Loans, Mortgage Finance

Get your loan modified to avoid an imminent foreclosure in 2011

Do you have your home loan to be repaid? Are your monthly financial obligations posing to be a problem when it comes to managing your monthly mortgage payments? If answered yes, you need not worry as home loan modification can actually help you avert the risk of an impending foreclosure. You just cannot sit back and mourn as you cannot make your monthly mortgage payments. Take the decision of getting your home loan modified and paying off your monthly mortgage payments with ease. Have a look at the ways in which you can pay off your home loan through home loan modification.

1.You can lower the interest rates: Most homeowners are struggling to pay off their existing mortgage loans due to the sky-high interest rates and the simultaneous rise in the prices of commodities. After paying off several monthly obligations, most of them are left with no money at hand to repay their mortgage loan. At such a situation, you can benefit by modifying your loan. A home loan modification is just rewriting the terms and conditions of the loan so that the repayment procedure becomes easy for the homeowner. You can therefore benefit by modifying your loan and paying off affordably.

2.You can extend the term of the loan: In order to obtain lower monthly payments, you can also extend the term of the loan by modifying it. If you had taken out a 15 year term loan, you must be tired of making high monthly payments. In such a case, you can modify your loan and get a 30 year term loan to lower the monthly payments. On the other hand, you may also reduce the term of the loan so that you can get rid of your entire secured debt amount.

3.You can change the loan program type: If you had taken an adjustable rate mortgage and youíve been subject to sudden interest rate hike, you can get your loan modified and change the loan program to a fixed rate mortgage. The monthly payments on your mortgage may increase on a fixed rate mortgage but you can at least be certain about the stable interest rates and monthly payments throughout the term of the loan.

4.You can avoid foreclosure by modifying your loan: The biggest benefit of modifying your loan is that this is possibly the best way to avert the risk of a possible foreclosure. As you get favorable rates and terms on your modified loan, youíll be able to make monthly payments on your mortgage loan. As the lending company remains satisfied with your payments, he will not foreclose your house.

To obtain a home loan modification, you need to write an impressive hardship letter to the lender. If you cannot show the extent of your financial hardship, your lender will perhaps turn down your offer of a modification. Also keep your financial documents in place to make the process of home loan modification easier.