By: Christen Scott
Second Mortgage Home Loan is given on the basis of the equity of your home. First of all you must understand what is the equity of home? Equity is the value of your home minus the loans you owe. Hence, you get amount for this loan on the basis of the equity of your home. Most of the times, this loan is used to consolidate the debts of high interest rates like credit card other then this, this loan is used for home renovations, improving property, raising funds, starting a new business, or buying a new property etc.
Second Mortgage Home Loan should not be confused with mortgage refinancing because these are two different loans. Mortgage refinancing is the replacement of old loan for new one at new conditions like interest rate and duration etc. But second mortgage loan is the new loan other then the loan you already owe to the lender. You have to deposit an additional monthly installment for this loan. Therefore you must calculate before applying for this loan that whether your pocket allows or not.
There is no such rule that you have to borrow this loan from same lender rather you can get this loan at competitive rate with other lenders. Duration of this loan depends on the repayment term. If, you want to get rid of the loan early, then you must pay heavy monthly installments and small installments for long duration which may be 15 to 20 years. Interest rate for this loan may be higher than your first mortgage but it is lower than unsecured loans.
7/08/2009
Some Facts On Plastic Surgery Financing
by : Devora witts
Plastic or Cosmetic Surgeries are elective treatments and therefore not covered by most health insurances or the NHS with few exceptions. Moreover, these practices tend to be quite expensive and thus, it is not strange that the financial industry has found a niche and created products to aid those who want these treatments but can not pay for them in full and need financing in order to afford them.
It is important to note though that plastic or cosmetic surgery financing is not widespread and therefore it is not as easy to get financing for these medical procedures as it is to obtain financing for making home improvements, buying a car or a home. However, there are alternatives that are widespread and easy to obtain and that can also be used to finance plastic or cosmetic surgery too.
Financing Through The Physician
Some physicians are willing to finance their fees so you can pay for their services in small installments rather than with a lump sum. This of course needs to be discussed and agreed prior to any treatment and the terms need to be clear to avoid legal problems. Depending on the agreement, there can be a charge for financing or not. Bear in mind though that most of them include the costs in the installments even if they claim not to charge for financing. There may be a discount for paying in full in advance.
Medical Loans As An Alternative
Medical loans are specially tailored for financing plastic surgeries and other elective procedures not covered by the NHS and sometimes not even by health insurance. Often, the physicians or the clinics they work for, agree with a particular lender for providing financing to potential clients/patients. These loans are personal unsecured loans that feature more advantageous terms and that are granted for the sole purpose of paying for the medical procedure. Thus, in most cases, the money will never be in your hands.
Personal Loans Other Than Medical Loans
Though medical loans are special personal loans, if your medical loan is not available through your clinic, physician and/or local lenders, you can always resort to traditional forms of financing. Personal loans can be used for any personal purpose and therefore, they can also be used for financing a plastic surgery or other elective treatment. There are different personal loan types and depending on your needs you should consider one or another:
Personal unsecured loans do not provide high loan amounts. Therefore, you can resort to them only for small plastic surgeries or cosmetic treatments that are not too expensive (Botox, nose job, lifting, etc.). Also, the repayment programs for these loans are not that flexible, you can obtain a five year repayment plan at most and the interest rate charged for financing is significantly higher than that of secured loans though lower than what it costs to finance with credit cards.
Personal secured loans are the right option for higher cost surgeries or cosmetic treatments. The money you can obtain when you offer collateral is significantly higher and therefore it is easier to afford more expensive treatments and operations.
Plastic or Cosmetic Surgeries are elective treatments and therefore not covered by most health insurances or the NHS with few exceptions. Moreover, these practices tend to be quite expensive and thus, it is not strange that the financial industry has found a niche and created products to aid those who want these treatments but can not pay for them in full and need financing in order to afford them.
It is important to note though that plastic or cosmetic surgery financing is not widespread and therefore it is not as easy to get financing for these medical procedures as it is to obtain financing for making home improvements, buying a car or a home. However, there are alternatives that are widespread and easy to obtain and that can also be used to finance plastic or cosmetic surgery too.
Financing Through The Physician
Some physicians are willing to finance their fees so you can pay for their services in small installments rather than with a lump sum. This of course needs to be discussed and agreed prior to any treatment and the terms need to be clear to avoid legal problems. Depending on the agreement, there can be a charge for financing or not. Bear in mind though that most of them include the costs in the installments even if they claim not to charge for financing. There may be a discount for paying in full in advance.
Medical Loans As An Alternative
Medical loans are specially tailored for financing plastic surgeries and other elective procedures not covered by the NHS and sometimes not even by health insurance. Often, the physicians or the clinics they work for, agree with a particular lender for providing financing to potential clients/patients. These loans are personal unsecured loans that feature more advantageous terms and that are granted for the sole purpose of paying for the medical procedure. Thus, in most cases, the money will never be in your hands.
Personal Loans Other Than Medical Loans
Though medical loans are special personal loans, if your medical loan is not available through your clinic, physician and/or local lenders, you can always resort to traditional forms of financing. Personal loans can be used for any personal purpose and therefore, they can also be used for financing a plastic surgery or other elective treatment. There are different personal loan types and depending on your needs you should consider one or another:
Personal unsecured loans do not provide high loan amounts. Therefore, you can resort to them only for small plastic surgeries or cosmetic treatments that are not too expensive (Botox, nose job, lifting, etc.). Also, the repayment programs for these loans are not that flexible, you can obtain a five year repayment plan at most and the interest rate charged for financing is significantly higher than that of secured loans though lower than what it costs to finance with credit cards.
Personal secured loans are the right option for higher cost surgeries or cosmetic treatments. The money you can obtain when you offer collateral is significantly higher and therefore it is easier to afford more expensive treatments and operations.
7/07/2009
Mortgage Refinance and Loan Modification Tips
by Anthony Russell
It makes no difference how careful people are while spending money, it's possible to incur debt. As per statistics, for the average family, the monthly mortgage installment turns out to be the biggest payment while redeeming the mortgage refinance loan. In case there's an emergency, or money needs to be borrowed for a settlement of credit card debt, it can disturb the balance between monthly income or cash inflow, and the monthly overheads. As a result, an affordable situation becomes highly unaffordable. So how should one cater to unavoidable circumstances?
The basic rule is to communicate with your creditors. The second rule is to keep on paying to the best of one's ability, to prevent the mortgage refinance loan liabilities from becoming unmanageable. When delinquency occurs, or if the debtor stops paying the monthly payments, it reduces the creditor's sympathy, and creates unhealthy grounds for solving your financial problems. In addition, being delinquent means you attract penalties as well as service charge, which will mount up your net payable debt.
The solution you may desire from your home mortgage refinance provider would be ideally a reduction in your home mortgage refinance loan monthly installments. It would be possible to avail this facility by extending the term of the mortgage loan, or by decreasing the interest rate. The question is why should a creditor modify your loan? The issue is for lenders the foreclosure option is tantamount to using a sledgehammer to crack a nut. If the lender is presented with a foreclose, there are negligible chances of recovering the bulk of the amount lent in the form of refinance home mortgage loan. So lenders are now thinking about providing some additional chances or options so that the debtor can work out something and redeem, rather than get stuck up with litigations and a potential loss in recovery through judicial proceedings. It turns out o be more cost-effective to recover less from a borrower, rather than spend money to recover through legal suits and face the dilemma of selling or not selling the security.
To successful redeem the mortgage; the first step would be to learn what is required to qualify for a loan modification program, and how to meet the prerequisites. The following insights can help you select amongst the many loan modification companies, and help you prepare for your mortgage loan modification programs:
# Presentation
Each creditor has his or her own loan modification guidelines and policies. It's required to spend the required time and effort to educate yourself about how the mortgage modification process actually works, and find out what your creditor is hoping to see in your application before approving it, and what other options are available to pay the dues.
# Debt ratio
It's the ratio, which lets you know how much you owe in comparison to your monthly income. Your lender will determine a new target amount, which will ideally be a percentage of the gross monthly income. By availing a longer loan term, or doing a principal forbearance, you can improve upon your chances for a successful mortgage loan modification.
# Disposable income
How much do you spend each month? Loan modification application includes a financial statement, which represents a detailed breakdown of your income and expenses. The applicant has to show the monthly bills and expenses against the monthly income, and prove it's possible to redeem. This assures the lender that you extra liquidity and are not a risk in being delinquent, if granted the home loan modification.
# Hardship letter
To avail financial hardship benefits, a detailed explanation of your current situation, and why you want to keep your house, and your future plans will help your lender understand how you are facing payment difficulties. Draft your letter to the point, and include enough documentation to avail your refinance mortgage claim by modifying your refinance mortgage loan. A well-written hardship letter plays an important part for a successful application.
It makes no difference how careful people are while spending money, it's possible to incur debt. As per statistics, for the average family, the monthly mortgage installment turns out to be the biggest payment while redeeming the mortgage refinance loan. In case there's an emergency, or money needs to be borrowed for a settlement of credit card debt, it can disturb the balance between monthly income or cash inflow, and the monthly overheads. As a result, an affordable situation becomes highly unaffordable. So how should one cater to unavoidable circumstances?
The basic rule is to communicate with your creditors. The second rule is to keep on paying to the best of one's ability, to prevent the mortgage refinance loan liabilities from becoming unmanageable. When delinquency occurs, or if the debtor stops paying the monthly payments, it reduces the creditor's sympathy, and creates unhealthy grounds for solving your financial problems. In addition, being delinquent means you attract penalties as well as service charge, which will mount up your net payable debt.
The solution you may desire from your home mortgage refinance provider would be ideally a reduction in your home mortgage refinance loan monthly installments. It would be possible to avail this facility by extending the term of the mortgage loan, or by decreasing the interest rate. The question is why should a creditor modify your loan? The issue is for lenders the foreclosure option is tantamount to using a sledgehammer to crack a nut. If the lender is presented with a foreclose, there are negligible chances of recovering the bulk of the amount lent in the form of refinance home mortgage loan. So lenders are now thinking about providing some additional chances or options so that the debtor can work out something and redeem, rather than get stuck up with litigations and a potential loss in recovery through judicial proceedings. It turns out o be more cost-effective to recover less from a borrower, rather than spend money to recover through legal suits and face the dilemma of selling or not selling the security.
To successful redeem the mortgage; the first step would be to learn what is required to qualify for a loan modification program, and how to meet the prerequisites. The following insights can help you select amongst the many loan modification companies, and help you prepare for your mortgage loan modification programs:
# Presentation
Each creditor has his or her own loan modification guidelines and policies. It's required to spend the required time and effort to educate yourself about how the mortgage modification process actually works, and find out what your creditor is hoping to see in your application before approving it, and what other options are available to pay the dues.
# Debt ratio
It's the ratio, which lets you know how much you owe in comparison to your monthly income. Your lender will determine a new target amount, which will ideally be a percentage of the gross monthly income. By availing a longer loan term, or doing a principal forbearance, you can improve upon your chances for a successful mortgage loan modification.
# Disposable income
How much do you spend each month? Loan modification application includes a financial statement, which represents a detailed breakdown of your income and expenses. The applicant has to show the monthly bills and expenses against the monthly income, and prove it's possible to redeem. This assures the lender that you extra liquidity and are not a risk in being delinquent, if granted the home loan modification.
# Hardship letter
To avail financial hardship benefits, a detailed explanation of your current situation, and why you want to keep your house, and your future plans will help your lender understand how you are facing payment difficulties. Draft your letter to the point, and include enough documentation to avail your refinance mortgage claim by modifying your refinance mortgage loan. A well-written hardship letter plays an important part for a successful application.
6/20/2009
Lower your Home Mortgage Rate and Compare Low Mortgage Rates
by Vikramkuamr
Do you currently own a home and wish to lower your home mortgage rate? Or maybe you are going to be purchasing a home sometime in the near future? If so then you will probably have to take out a mortgage loan unless you are fortunate enough to be able to pay for the entire house. It is extremely important to compare low mortgage rates in order to find the lowest rates possible. There are a number of things that you can do to help lower your home mortgage rate. There are many websites that will allow you to compare low mortgage rates allowing you to select the lowest.Besides trying to compare low mortgage rates there are a number of other things that you can do to lower your home mortgage rate such as improving your credit score. In order to improve your credit score you will want to make sure that you pay all of your bills on time and also be sure to pay off any existing debts that you have. It is common for lenders to evaluate your credit score and your debts in order to determine how risky you are when it comes to you paying to paying your monthly payment. Therefore you will want to achieve a good credit score. It is also important that you do not apply for any new credit cards during this time.
When it comes to putting up a down payment on your home you will want to put as much money as possible down. The bigger your down payment is the lower your interest rate will be. This is one of the ways that you can lower your home mortgage rate. You will need to check with your lender to determine if there are cut off points on the size of your down payment. By putting down five thousand dollars or ten thousand dollars more you can bring your interest rate down by a much as a tenth of a point and sometimes even more.
When trying to lower your home mortgage rate you will want to work with several different mortgage brokers or lenders and compare low mortgage rates to get the best offer. When working with a broker you need to remember that the broker will probably get commission from you as well as from the lender. Brokers will often work with many different lenders but they often will fail to tell you which option is your best. It is extremely important to make the brokers compete for your business when trying to lower your home mortgage rate. You will also want to use the internet to help you compare low mortgage rates.
There are many websites that will give the ability to compare low mortgage rates with one another. Lowest-Mortgage-Rates is one of those websites. The website will not only allow you to compare rates but it will allow give you the ability and tools needed to find the lowest mortgages rates and the best lenders in your specific area. The website and the company behind it will help you lower your monthly mortgage rate payment by giving you a new low rate. The company employs a number of debt settlement pros that will help you reduce your bills by forty to eighty percent.
Do you currently own a home and wish to lower your home mortgage rate? Or maybe you are going to be purchasing a home sometime in the near future? If so then you will probably have to take out a mortgage loan unless you are fortunate enough to be able to pay for the entire house. It is extremely important to compare low mortgage rates in order to find the lowest rates possible. There are a number of things that you can do to help lower your home mortgage rate. There are many websites that will allow you to compare low mortgage rates allowing you to select the lowest.Besides trying to compare low mortgage rates there are a number of other things that you can do to lower your home mortgage rate such as improving your credit score. In order to improve your credit score you will want to make sure that you pay all of your bills on time and also be sure to pay off any existing debts that you have. It is common for lenders to evaluate your credit score and your debts in order to determine how risky you are when it comes to you paying to paying your monthly payment. Therefore you will want to achieve a good credit score. It is also important that you do not apply for any new credit cards during this time.
When it comes to putting up a down payment on your home you will want to put as much money as possible down. The bigger your down payment is the lower your interest rate will be. This is one of the ways that you can lower your home mortgage rate. You will need to check with your lender to determine if there are cut off points on the size of your down payment. By putting down five thousand dollars or ten thousand dollars more you can bring your interest rate down by a much as a tenth of a point and sometimes even more.
When trying to lower your home mortgage rate you will want to work with several different mortgage brokers or lenders and compare low mortgage rates to get the best offer. When working with a broker you need to remember that the broker will probably get commission from you as well as from the lender. Brokers will often work with many different lenders but they often will fail to tell you which option is your best. It is extremely important to make the brokers compete for your business when trying to lower your home mortgage rate. You will also want to use the internet to help you compare low mortgage rates.
There are many websites that will give the ability to compare low mortgage rates with one another. Lowest-Mortgage-Rates is one of those websites. The website will not only allow you to compare rates but it will allow give you the ability and tools needed to find the lowest mortgages rates and the best lenders in your specific area. The website and the company behind it will help you lower your monthly mortgage rate payment by giving you a new low rate. The company employs a number of debt settlement pros that will help you reduce your bills by forty to eighty percent.
6/07/2009
Retire to PEI with Extra Cash
PEI is located off the eastern coast of Canada, situated 13km off the shores of New Brunswick and accessible by the Confederation Bridge or the Wood's Island Ferry. Our year round population is approximately 140,000 but grows close to 1 million in the summer including residents, summer residents, and vacationers.
PEI affords beautiful summers, lots of ocean and riverfrontage, parks to play in, all the shopping, restaurants and sports facilities you could want as well as access to hospitals and great PEI real estate.
For anyone in other parts of Canada looking for a place to retire, PEI real estate offers the best of all worlds. Small enough that neighbours know neighbours, large enough to still offer the amenities, PEI real estate is some of the best priced and best valued in Canada. You can live on PEI, the island that so many choose for their vacations, steeped in tradition and history, and with our less expensive cost of living, largely a result of lower housing costs, enjoy a better standard of living with more money to invest in income-producing investments.
As you retire you should be thinking of converting your biggest long term asset, your home, into income producing investments. You have lived in this home probably the best part of your life, raised a family there; but now they are gone and the house is usually too big. However you still need a place to live and you don't want to resort to renting. If you buy in the area you currently live you will have to substantially reduce the quality of home you live in or the neighbourhood in order to extract any money from your investment to re-invest in income-producing market investments
The alternative is to really change your neighbourhood, move from your province and reap the reward while still enjoying a great lifestyle - relocate to PEI. To give you an idea of the money that you can extract and re-invest in income-producing financial instruments consider that if you currently have a home in BC, the most expensive real estate market in Canada, you will be able to re-direct over 70% of the value of your home (because PEI's average home price is 30% of BC). Let's say that your home is valued at approximately the average BC home price of $450,000 - that means that you will have $315,000 to invest in income-producing assets. At a modest return off 5% that would net you an annual return of $15,750 per year or $1312.50 per month that will surely result in a better lifestyle here on the PEI.
Now if you live in Ontario, the average home price of just under $300,000 would mean that you could re-coup 47% of your investment. This would net you $14,100 per year or $1175 per month to make you retirement on PEI that much more comfortable. These are of course averages but I am sure that you can see the idea. Also taking your investment return at 5% is very conservative and represents investment security. That figure could be double or even more if you were willing to ride the market a bit more and accept some risk. This would mean that you could be into income figures in the range of up to $2500 per month.
The above scenario of course pre-supposes that you have paid off your mortgage. However this plan still brings benefits even for those who owe money on their current home. Even for those who owe too much to actually re-coup money for investment purposes, selling your current home and moving to PEI could result in reducing or eliminating your mortgage. That could be a saving of a thousand or more dollars per month. Money saved is the same as money earned and will still result in a better lifestyle.
So why not call a local PEI realtor and begin the search for your PEI real estate. With homes starting in the $50K's there are lots of opportunities for everyone. While retiring here is a great option, I also want to suggest that this is a perfect place for new couples and young families. You can get into the real estate market here while you might not be able to in other provinces. PEI is a safe place to raise kids!
PEI affords beautiful summers, lots of ocean and riverfrontage, parks to play in, all the shopping, restaurants and sports facilities you could want as well as access to hospitals and great PEI real estate.
For anyone in other parts of Canada looking for a place to retire, PEI real estate offers the best of all worlds. Small enough that neighbours know neighbours, large enough to still offer the amenities, PEI real estate is some of the best priced and best valued in Canada. You can live on PEI, the island that so many choose for their vacations, steeped in tradition and history, and with our less expensive cost of living, largely a result of lower housing costs, enjoy a better standard of living with more money to invest in income-producing investments.
As you retire you should be thinking of converting your biggest long term asset, your home, into income producing investments. You have lived in this home probably the best part of your life, raised a family there; but now they are gone and the house is usually too big. However you still need a place to live and you don't want to resort to renting. If you buy in the area you currently live you will have to substantially reduce the quality of home you live in or the neighbourhood in order to extract any money from your investment to re-invest in income-producing market investments
The alternative is to really change your neighbourhood, move from your province and reap the reward while still enjoying a great lifestyle - relocate to PEI. To give you an idea of the money that you can extract and re-invest in income-producing financial instruments consider that if you currently have a home in BC, the most expensive real estate market in Canada, you will be able to re-direct over 70% of the value of your home (because PEI's average home price is 30% of BC). Let's say that your home is valued at approximately the average BC home price of $450,000 - that means that you will have $315,000 to invest in income-producing assets. At a modest return off 5% that would net you an annual return of $15,750 per year or $1312.50 per month that will surely result in a better lifestyle here on the PEI.
Now if you live in Ontario, the average home price of just under $300,000 would mean that you could re-coup 47% of your investment. This would net you $14,100 per year or $1175 per month to make you retirement on PEI that much more comfortable. These are of course averages but I am sure that you can see the idea. Also taking your investment return at 5% is very conservative and represents investment security. That figure could be double or even more if you were willing to ride the market a bit more and accept some risk. This would mean that you could be into income figures in the range of up to $2500 per month.
The above scenario of course pre-supposes that you have paid off your mortgage. However this plan still brings benefits even for those who owe money on their current home. Even for those who owe too much to actually re-coup money for investment purposes, selling your current home and moving to PEI could result in reducing or eliminating your mortgage. That could be a saving of a thousand or more dollars per month. Money saved is the same as money earned and will still result in a better lifestyle.
So why not call a local PEI realtor and begin the search for your PEI real estate. With homes starting in the $50K's there are lots of opportunities for everyone. While retiring here is a great option, I also want to suggest that this is a perfect place for new couples and young families. You can get into the real estate market here while you might not be able to in other provinces. PEI is a safe place to raise kids!
6/01/2009
Ensure Financial Security For Your Old Age With A Texas Reverse Mortgage
Retirement brings with it not just a sense of insecurity but financial worries as well, because all of a sudden the regular inflow of income comes to a halt. The senior, retired citizen might have made many sound investments during his active service life but in most cases these investments take time to be converted into liquid cash. It is therefore, a cause for worry in case you are a senior, retired citizen of America and you need instant cash at a short notice. However, homeowners in Texas can have it easy if they are retired and fall into the age group of sixty five or above. The Texas reverse mortgage scheme makes it possible for any homeowner in Texas to put up their property for a mortgage and solve all their financial requirements without breaking into their investments.
A Texas reverse mortgage is the most feasible way to raise funds when you need them. The house owner who puts up his house for mortgage can continue using the property for his residential purpose for as long as he wishes. Also, the loan amount for the Texas reverse mortgage need not be paid back by the borrower as the house itself repays the loan through its sale. So the borrower need only pay the regular costs and charges associated with his house like that of house tax and cost of repair and maintenance. The ownership of the mortgaged property remains with the house owner till the very end or unless he decides to sell off the house. Even when the house is sold off by the owner, first the reverse mortgage loan needs to be repaid from the sale proceeds itself, before the owner or his heirs can claim any share of the proceeds.
The burden of the Texas reverse mortgage does not pass on to the heirs of the homeowner as the house itself is security enough for the lender. Also, a property that has been put up for reverse mortgage can be re-mortgaged again, provided that the mortgage was the first of its kind loan on the property. The borrower also gets the benefit of choosing the mode of payment of his loan amount. He could choose to get the entire loan amount as a lump sum or in monthly installments from the lender. Most of the retired, senior citizens prefer the monthly installment form of payment as it ensures a regular inflow of income for the household even after the retirement of the homeowner.
So if you are a retired, senior citizen who owns a house in Texas, then Texas reverse mortgage may be the most feasible option for you to raise cash. It not just enables you to get access to ready funds but by securing the roof over your head for your lifetime, it gives you a tremendous sense of financial security and peace of mind. An individual who has lived his entire life with dignity and self respect would not like to take the financial help of any family member or friend and thus the reverse mortgage helps him lead his life post retirement in the same way.
By: Simon Lowa
A Texas reverse mortgage is the most feasible way to raise funds when you need them. The house owner who puts up his house for mortgage can continue using the property for his residential purpose for as long as he wishes. Also, the loan amount for the Texas reverse mortgage need not be paid back by the borrower as the house itself repays the loan through its sale. So the borrower need only pay the regular costs and charges associated with his house like that of house tax and cost of repair and maintenance. The ownership of the mortgaged property remains with the house owner till the very end or unless he decides to sell off the house. Even when the house is sold off by the owner, first the reverse mortgage loan needs to be repaid from the sale proceeds itself, before the owner or his heirs can claim any share of the proceeds.
The burden of the Texas reverse mortgage does not pass on to the heirs of the homeowner as the house itself is security enough for the lender. Also, a property that has been put up for reverse mortgage can be re-mortgaged again, provided that the mortgage was the first of its kind loan on the property. The borrower also gets the benefit of choosing the mode of payment of his loan amount. He could choose to get the entire loan amount as a lump sum or in monthly installments from the lender. Most of the retired, senior citizens prefer the monthly installment form of payment as it ensures a regular inflow of income for the household even after the retirement of the homeowner.
So if you are a retired, senior citizen who owns a house in Texas, then Texas reverse mortgage may be the most feasible option for you to raise cash. It not just enables you to get access to ready funds but by securing the roof over your head for your lifetime, it gives you a tremendous sense of financial security and peace of mind. An individual who has lived his entire life with dignity and self respect would not like to take the financial help of any family member or friend and thus the reverse mortgage helps him lead his life post retirement in the same way.
By: Simon Lowa
5/29/2009
Loan modifications and refinancing
No matter how careful people are, debts can get on top of them. For almost every family, the monthly mortgage installment will be their biggest payment. If there's an emergency of some kind and more money has to be borrowed on a loan or credit cards, this can disturb the delicate balance between paycheck and monthly payments. What was affordable suddenly becomes unaffordable. How should families react when disaster strikes? The first rule is always to communicate with your lenders. If you have a problem, they should be the first to know. The second rule is to keep paying as much as you can on all your liabilities. The moment you stop, this sacrifices every creditor's sympathy for your problems. You are now a delinquent, and penalties and service charges will drive up the amount owing. Can this all be avoided? Well, with some care, you can talk some lenders into modifying the loan or refinancing the debt.The modification you want from your mortgage provider is some reduction in the monthly installment. This may come from extending the term of the loan or from reducing the interest rate applied. Why should a lender modify the loan? The problem for lenders is that foreclosure is a sledgehammer remedy to crack a nut. If the lender does foreclose, there is a small mountain of fees to be paid to end up with ownership of a property it cannot sell in a depressed market. Indeed, lenders are now looking at increased costs to maintain and repair properties to prevent further losses in value. None of these costs will ever be recovered from the borrowers, particularly if they are forced into bankruptcy. It is more cost-effective to take less from a borrower and leave the house occupied. This preserves the asset value and keeps some money coming in from the borrower. Most lenders now have a dedicated department to deal with modification applications. Applying for relief is more likely to receive a constructive response today.
President Obama has pushed through a package called "Making Home Affordable". It covers both mortgage refinancing and modification. If you qualify, lenders must reduce your monthly repayments so that they are less than 31% of your income. To qualify, you must be current on your loan with no payment more than 30 days overdue. You must be able to show the resale value of your home has dropped by more than 15% and that your personal circumstances justify federal assistance. For these purposes, anyone with a mortgage from Fannie Mae or Freddie Mac qualifies automatically. This can entitle you to interest as low as 2% with all the lender's losses covered by the government and represents an excellent deal if you can bring yourself within the terms of the scheme. If you do not qualify, it will come down to you or a professional advisor acting on your behalf to talk the mortgage lender into agreeing a refinancing package on favorable terms. It's in everyone's interests that you save on mortgage installments and keep making some repayments to the lender. This way leads to peace of mind, knowing that the ownership of your home is secure.
by David Mayer
President Obama has pushed through a package called "Making Home Affordable". It covers both mortgage refinancing and modification. If you qualify, lenders must reduce your monthly repayments so that they are less than 31% of your income. To qualify, you must be current on your loan with no payment more than 30 days overdue. You must be able to show the resale value of your home has dropped by more than 15% and that your personal circumstances justify federal assistance. For these purposes, anyone with a mortgage from Fannie Mae or Freddie Mac qualifies automatically. This can entitle you to interest as low as 2% with all the lender's losses covered by the government and represents an excellent deal if you can bring yourself within the terms of the scheme. If you do not qualify, it will come down to you or a professional advisor acting on your behalf to talk the mortgage lender into agreeing a refinancing package on favorable terms. It's in everyone's interests that you save on mortgage installments and keep making some repayments to the lender. This way leads to peace of mind, knowing that the ownership of your home is secure.
by David Mayer
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