2 Major Options for Refinancing
February 22nd, 2010 by aclazaro
To choose any possible refinancing option for the termed ‘underwater’ mortgages are minimal since majority of the lenders require at least 20 percent of equity in property. But the borrowers should never feel desperate about it. The good news is that there are available options left.
First option would be the HARP or the Home Affordable Refinance Program. This permits the borrowers who have passed the qualifications for a loan refinance that ranges from 105% to even 125%, the maximum for a value of a home. But with this option, you must not be headed for foreclosure. Your eligibility would be disqualified once you have delayed payments for the previous year.
The second option would the HAMP or the Home Affordable Modification Program which can be accessed through the lenders of mortgage. HAMP is said to be capable of lowering your payments for 60 months.
Photo via http://www.irishtimes.com/newspaper/finance/2009/0626/1224249564062.html
Refinancing?
January 21st, 2010 by daphne reyes
Most people who borrow more than 80 percent of a home’s value pay private mortgage insurance, which protects the lender in case of default. Let’s say the owner of a $150,000 home who wants to combine a $110,000 first mortgage with a $20,000 home equity loan. The combined, refinanced loan would be for more than 80 percent of the home’s value, so the borrower would have to pay PMI. Such a borrower would have to consider the PMI payment when deciding whether refinancing would save money.
Refinancing might be a bad deal for a homeowner who has been paying the same mortgage for many years. If you have been paying for 20 years on a 30-year mortgage, refinancing for another 30 years might result in a lower monthly payment. But you would be making those payments for 30 more years instead of 10.
The bottom line is that you have to look at the bottom line: figure out the costs of refinancing and compare those with your existing payment and calculate how long it would take to recoup the costs. If you don’t plan to stay in the house to make it worthwhile, stick with your existing mortgage.