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Amazon.de Widgets Have you been affected by the recent economic downturn and tried to get a home mortgage refinance only to find you did not qualify? You might feel the need to reduce your monthly payments because you have been laid off from your job or maybe you you’ve tried to sell your house but could not. If so, you are just one of the many citizens President Obama targeted when developing the plan called “Making Home Affordable”.About “Making Home Affordable”The basics of the “Making Home

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For many people who find themselves in debt , consolidation may be the answer to their problems. If they combine their outstanding finances into a one debt consolidation loan they can usually reduce their monthly outgoings quite considerably. It is not just the reduction in the amount of money they have to find each month that makes debt consolidation loans so appealing to people. Perhaps the greatest benefit of all is the peace of mind such loans can bring. For anyone who has been hau

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Many reasons exist to refinance mortgages. The most common include obtaining a reduced interest rate, change the type of loan, or receive cash back from accrued home equity. Reducing interest rates by 2-percent or more can save borrowers thousands of dollars over the course of a 15- or 30-year mortgage note.

When borrowers refinance mortgages the original loan is paid off and a new loan originated. Mortgage refinance requires homeowners to submit a new home loan application. Borrowers who hold two or more mortgages can refinance into one new loan.

Prior to contacting lenders, financial experts advise borrowers to review current loan documents. It is important to determine the interest rate applied to the loan and if a prepayment clause is included. Many mortgage lenders impose prepayment penalties for closing loans early. These fees will be charged in addition to closing costs associated with refinancing.

Lenders grant mortgage refinancing approval based on multiple factors. Borrowers must possess a solid track record of paying bills on time, along with a credit score of 700 or higher and a solid employment record. Other mortgage refinance criteria include the appraised value of the property verses the amount of outstanding interest and principal.

Homeowners can refinance mortgages to obtain cash to pay off credit cards, outstanding debts, student loans, medical expenses or for home improvements. Home loans are charged a lower interest rate than other types of credit. For example, the average rate for a 30-year fixed rate home loan is 5.03-percent, while credit cards are charged an interest rate of 12-percent or more.

Mortgage refinancing can occur at any time. Individuals who hold a subprime loan often elect to refinance into a conventional loan within a few years. Many borrowers who hold a 30-year mortgage choose to refinance into a 15-year loan once their finances improve and they can afford higher mortgage payments.

Homeowners who refinance mortgages will incur closing costs for the new loan. Some lenders provide no cost loans, meaning the closing costs are included in the refinanced loan. It is important to realize interest will be charged on settlement costs for the duration of the loan. It usually makes better financial sense to pay closing costs upfront and avoid paying interest for 15 to 30 years.

The decision to refinance mortgages should not be taken lightly. Borrowers should take time to seek out information and resources to help them make the best financial decision. The Federal Reserve Board offers a comprehensive consumer’s guide to mortgage refinancing via their website at FederalReserve.gov. Visitors can download worksheets to help them determine if they meet mortgage refinancing criteria; determine the actual costs involved; and obtain mortgage loan comparison guides.

Homeowners should only refinance mortgages when doing so will save them money. Otherwise, they could be placing their most valuable asset at risk for foreclosure. It is best to consult with a financial advisor, credit counselor or mortgage broker before engaging in mortgage refinance.

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Fannie Mae (fanniemae.com) and the Mortgage Bankers Association (mbaa.org) published economic forecasts in August 2009 that indicate rising rates.

According to Fannie Mae’s forecast, 30 year fixed rates are predicted to increase from the current quarter of 2009 through the end of 2010, with mortgage rates eventually reaching 6% or more.

Also, the 10-Year Treasury Note has been commonly used as a barometer of the direction of mortgage rates, and based on their economic forecasts of the 10-Year Treasury Rate, there is an indication of a corresponding upward trend in mortgage rate increases coming at a steady pace per quarter, which could amount to an increase of 1% or more by the end of 2010.

If the forecasts turn out to be accurate, the 30 year fixed rates may increase to 6% or higher by the third or fourth quarter of 2010. Rising mortgage rates could slow demand for buying homes and mortgage refinancing. The number of qualified borrowers may be reduced, slowing the housing market, and homeowners with adjustable loans could see payment increases, adding to the risk of more defaults.

The information appears to be credible, considering the sources: Fannie Mae is a government sponsored enterprise chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets. The Mortgage Bankers Association is a national organization that represents the real estate finance industry, including mortgage companies, mortgage brokers, commercial banks, life insurance companies and others in the mortgage lending field.

The following quote applies to forecasts “Predictions are difficult, especially about the future”, but in light of this information, those who have been sitting on the fence waiting for mortgage rates to come down may want to reconsider their strategy.

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Qualifying for a home mortgage loan is significantly more challenging than ever before. Subprime lenders approved too many mortgage loans to buyers financially unqualified to repay the debt. Careless lending practices led to a massive influx of foreclosures.

In order for homeowners to obtain home mortgage approval through traditional lenders today, they must possess a nearly perfect credit score, consistently pay bills on time, and have a solid record of employment. While this can be wearisome to borrowers with average or poor credit, alternative options exist for obtaining home loan approval.

One popular alternative is seller carry back mortgages. This type of financing involves the seller acting as the lender. Sellers can carry all or part of the purchase price. Buyers enter into a legal contract which outlines details of the transaction.

Seller carry back financing gives buyers time to clear negative credit marks or establish credit. Contracts generally last between two and five years. Once the contract expires, buyers obtain financing through a conventional mortgage lender.

Many property owners are entering into rent-to-own contracts. Tenants reside in the house and a portion of the rent is contributed toward the purchase price. Sellers usually require a down payment of 5- to 10-percent and apply 10- to 50-percent of the rental income toward the purchase.

Lease-to-own contracts should be drafted by a real estate attorney to ensure both parties are protected in the event of default. Contracts typically last between two and three years to help buyers establish a history of mortgage payments.

Real estate investors and investment groups provide hard money loans to borrowers unable to qualify for conventional loans. Private lender loans are not cheap. Interest rates can range between 10- and 20-percent, compared to 5.03-percent for mortgage loans obtained through lending institutions.

It is not uncommon for real estate investors to require down payments of 30- to 50-percent. Hard money home loans are not intended to last longer than three years. Borrowers should strive to refinance hard money home mortgages as quickly as possible.

Borrowers who not meet conventional home mortgage loan criteria might qualify for Federal Housing Authority (FHA) loans. FHA loan criteria include: providing proof of income, accurate property appraisal, and source of down payment (inheritance, savings, gift, etc.). FHA lending limits vary by state. In order to obtain FHA funding, borrowers must work with an approved mortgage lender.

The Department of Housing and Urban Development (HUD) provides homebuyer assistance programs. These state programs are offered to low-income buyers and individuals working in certain professions including police officers, firefighters, and teachers.

The recessed economy and housing market has opened the door to exceptional real estate deals. Now is the time to invest in real estate as long as you are financially prepared. Realize there is much more to owning a home than making mortgage payments. Take time to do the math of all costs associated with homeownership. If you are ready to take the leap, shop around for the best home mortgage deal.

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