Loan Modifications - Mortgage Refinance - Car Loans

Refinancing your home mortgage is not the same thing as getting a second mortgage. While both allow you to cash out your home’s equity, terms and rates differ between the two types of loans. To know which financing option is best for you, learn each loan’s features and pick the one that best meets your needs.

Refinancing Your Mortgage

Traditional refinancing is basically replacing one mortgage loan with another. Typically, refinancing lowers mortgage payments through lower interest rates or longer loan terms. You can also cash out part or all of your home’s equity while refinancing.

Refinancing requires paying closing fees. To recoup these costs, you usually need to stay in the house for a couple of years. However, you will save money with better terms than if you choose a second mortgage.

Second Mortgage Option

Second mortgages, also known as home equity loan, have slightly higher rates than mortgages, but you have less or no closing costs. Second mortgages also only charge interest on the amount you borrow, not the total amount you are approved for. You can take out your equity over the course of several months or years. Terms vary widely between second mortgage lenders, so watch out for balloon payments or repayment fees.

If you want tap into your equity to make some home improvements but plan to sell soon, then a second mortgage would be better than refinancing your mortgage. Second mortgages also are a better choice when your current mortgage interest rate is lower than those being offered by refinancing lenders.

Factors To Consider

When deciding which financing option to choose, consider the purpose of the loan. If you want to reduce monthly payments, then refinance. If you simply want to tap into your home’s equity, then apply for a second home mortgage.

Also, consider how long you want to stay in your house. You can lose money refinancing your mortgage if you don’t stay in your home. However, if you sell your home or refinance, you will have to pay off your second mortgage.

In order to help people who are having a hard time meeting their mortgage payments a new federal mortgage loan modification program has been introduced under the Obama administration. The program is intended for anyone who has high interest loans against their homes. This problem is currently affecting millions of homeowners so the financing that has been set aside in order to provide the levels of aid required totals $75 billion dollars.

The intention of the Obama federal mortgage loan modification program is reduce the repayments of homeowners to affordable levels that can be sustained on an ongoing basis. The maximum total monthly repayment level (including capital repayments, interest, insurance and tax) that is available is 38% of gross monthly income and that is only available under special circumstances; the more typical maximum for people meeting the qualification criteria is 31%.

To encourage participation the government is offering financial rewards for each home loan modification and any lost revenue due to lower interest rates will be government funded. The borrowers are also being offered incentives to meet repayments that could be worth a total of $5000 dollars over 5 years; these incentives will be used to pay off a portion of the capital (Principal) of the loan.

To speed up the application for a mortgage modification you need have available the following documented information:

• Proof of gross monthly income from all sources


• Your latest tax return


• Proof of any valuable assets


• The details of any 2nd mortgage on the house


• The balances and minimum monthly payments required for all credit cards


• The balances and monthly payments of any other loans you have


• A letter that explains why your mortgage has become unaffordable

With Obama’s ‘make home affordable’ program you do not have to be delinquent on your payments, if you can demonstrate that your total monthly mortgage repayments are greater than 31% of your gross monthly income, you may be eligible even if you are up to date on your payments.

Refinancing the home mortgage loan seems to be the best solution to escape from the troubles created by existing loan. But, it is not so in every case. People must consider many aspects before applying for Home Mortgage Refinance Loan.

It is not so that if you get refinance at lower interest rate then, you are going to save money and this would be the best financial solution. Lower interest may let you save some money but other expenses like home re-appraisal, attorney fees, and loan application fees add up to a lot of money. This way you may go into loss in spite of saving money.

To avoid this situation you must do some homework that is to search and compare the interest rate and other expenses. This is not enough to get best refinance loan, the most important thing is to compare the amount you would need to pay for your existing mortgage and the amount you will need to pay after refinancing including the hidden charges. If your refinance lets you save some money then you deserve this loan otherwise this would lead to overpaying in spite of saving some money.

To calculate refinancing amount many websites are available over internet with free mortgage refinance calculator. Here you can not only check whether refinancing would be better for you but you can also find how it will be good for you to repay the amount. You can check by entering different length of time and your amount that how much monthly installment you will have to pay for how long?

To get best deal with Home Mortgage Refinance Loan, you should also avoid overpaying by watching out retail markup. Mortgage company or brokers markup your interest rate to increase their revenue and they do not want you to know about this. They do this because the wholesale lender pays them a bonus for overcharging you for your Home Mortgage Refinance Loan.

To avoid retail markup you must check the original loan rate guarantee from the wholesale lender, so that you can come to know about the actual rate of your refinance. If, the wholesale lender does not give the guarantee to check then you must do is to search for another lender. This way by being careful and checking all the aspects of Home Mortgage Refinance Loan you can make a smart decision and can borrow a smart mortgage refinancing loan.

You may be having question like when is the best time to refinance home mortgage loans. This may be difficult, as there are various factors affecting the credit facility, which decide whether you should go in for mortgage refinancing, or whether you ought to wait.

Economic situation

Interest rates depend upon the economic situation in the market. Frequently, the government often uses higher rates of interest due to inflation, and this affects the consumer’s net expenses. As customers tend to overspend because of inflation, the interest rate increase, and this lowers the actual spending. However, as the economy slows down, the rate of interest drops, and encourages consumers to spend more and avail low interest loans. Thus, one of the best times to refinance home mortgage loan would be when the economy situation is low, and interest rate gets lowered down.

Your credit ratings

Even if you have an existing loan, it’s still possible to think about refinancing mortgage loan. You should have good credit ratings to avail the lowest possible rates of interest to get the best deal on refinancing. It’s always advisable to get your credit report approved by three main credit-reporting bureaus, before submitting your application for refinance. It’s possible to avail a bad credit mortgage refinancing loan even if you’re having “bad” or “poor” credit score through many financial institutions.

How long you have availed your loan?

The period of time for which you have availed your loan is also an important factor. Generally lending organization won’t agree if the borrowers refinance soon after availing a loan. Normally it’s recommended to wait for a minimum of 4 to 7 years before considering refinancing your home.

Additional reasons to refinance home mortgage

Frequently, a raise in the market value of housing might be the best time to refinance. Especially, if you plan to merge some of your debts, or avail some equity through your home. If your earnings have increased or if you’ve been repairing your credit scores, refinancing can be the best alternative for you. As you can avail a much lower interest rate, or renegotiate the terms for your home mortgage refinancing.

What is Chapter 7 of Bankruptcy?

Chapter 7 Bankruptcy is ideal for debtors that have huge unsecured debt. When you file for this, the trustee uses all the non-exempt assets at disposal and pays of whatever possible fraction of your debt. The remaining debt is0 discharged. Thus, you become free of debts. Laws vary from state to state and all states provide the liberty of keeping a part of your possessions. It would be best to consult a bankruptcy attorney to find the application of Chapter 7 Bankruptcy.

Am I eligible for Chapter 7 Bankruptcy?

Several schedule need to be first completed by the bankruptcy lawyer. One’s assets, income, debts, expenses, income, and other documents are listed in these schedules. It is only after this that one’s eligibility can be determined. The evaluation of your income in comparison to expenditure is done by bankruptcy means test. This test decides the number of applicants who can file on the basis of their income. One should know that the eligibility is not determined solely on the basis of the debt amount. In the past, the number of those who have filed for bankruptcy has been restricted and limited. Prior to filing Chapter 7 Bankruptcy, a credit counseling class becomes compulsory.

What does Chapter 7 Bankruptcy involve?

The main steps towards application of Chapter 7 Bankruptcy are as follows.

• Consult a bankruptcy attorney to decide your eligibility for Chapter 7 Bankruptcy
• The Bankruptcy Attorney should be able to answer your queries and explain which one of Chapter 7 Bankruptcy and Chapter 13 Bankruptcy is better suited for you. He should be thorough with the chapter 7 bankruptcy rules.
• Set all the information about you financial details in order. The financial details include income, expenses, debts, and assets
• To make your work easier seek a check list from your Bankruptcy Attorney
• After filing bankruptcy application one is informed about the schedule of appointment with the bankruptcy trustee
• One has to wait for the final order for the discharge of the debts
• One is free from debts.

Mortgage refinancing or refinancing your home loan can very beneficial in that it may save you money on your monthly mortgage payments but may also save your home from foreclosure. If you have good credit scores then the process of refinancing is easy. Nevertheless what if you have poor credit, can you do mortgage refinance with bad credit?

If a home is on the way to being repossessed it time to act quickly. Ideally, it is best to make a change long before this happens. A Poor Credit mortgage refinance is not automatic; you will have to put some effort in getting your home ready, getting mortgage refinance advice, and doing some research for lenders. Nevertheless it is possible to refinance with poor credit.

While Bad Credit mortgage refinance may be helpful they also have serious guidelines to follow. Chances are that if a new loan goes bad so will renewed credit. Real estate may still be sacrificed.

The reality is that a new chance is given but making those payments on time is going to be more crucial than ever. Vigilance is important as well in preparing a home for a pre-mortgage inspection. Real estate needs to be in tip top shape when an appraiser comes around with a camera in tow.

Ideally, a local lending institution can be most helpful with new loans as real estate is considered substantial equity. To secure a new home mortgage refinancing it is important to be able to convince a new lender that real estate equity is solid. When they ask about the prior lender and why they aren’t being used it may be true confessions time. Some people say they want a fresh start and are trying to re-establish credit. These are actually what many people do say and it is the truth.

If a local bank will not refinance there are other options. Mortgage brokers are very familiar with poor credit mortgage refinancing. When prospective customers walk through their doors or through an Internet site they already know that banks have been exhausted.

Sometimes this is the best case scenario as they can put a realistic package together to sell a lender to take new clients on. The way they work is that they review all credit obligations. This means every loan that might be owed is tallied. These meant outstanding student loans, credit card debt and any other loans will be figured into the equation. While the sounds bad to some, it can be an answer for solving several debts in one.

Likely there will be a recommendation to take a loan to cover all the debts in the household. While there may not be a check to spend on other things the fact that there is only one bill to pay for debts.