Mortgage refinance became headline news when President Obama announced the Homeowner Affordability and Stability Plan on March 4, 2009. The mortgage stimulus plan is offered to borrowers' struggling to make their mortgage payments. Homeowners are given the opportunity to refinance their mortgage note and lock-in a fixed rate of interest.
Mortgage refinance involves paying off the original home loan and taking out a new loan. In addition to mortgage refinancing the Homeowner Affordability and Stability Plan offers the option for qualified borrowers to obtain loan modifications.
Modified loans permanently alter the terms of the note. Lenders offer a variety of loan modifications to help borrowers get back on track. Much depends on their ability to repay the loan and circumstances which caused them to default on the mortgage note.
Borrowers who obtain loan modifications under the mortgage refinance stimulus plan are offered incentives of up to $5000 if they remain current with payments for five years. According to Univision.com, the stimulus plan will help 3 to 4 million homeowners avoid foreclosure. Details are presented via the White House blog at Whitehouse.gov/blog.
Other reasons exist for homeowners to engage in mortgage refinancing. This option is available to borrowers with good credit and a solid payment history. Borrowers can elect to refinance their home loan when interest rates drop or if they want to change the type of mortgage loan.
Those who are unfamiliar with refinancing should take time to become informed about the process. The Federal Reserve Board offers a consumer guide to mortgage refinance options, along with downloadable refinancing and loan comparison worksheets via their website at FederalReserve.gov.
Homeowners who opt to refinance home loans are advised to shop around for lenders. Interest rates can vary ¼-percent to 5-percent between lenders. While ¼-percent might not sound like much, it can amount to thousands of dollars over the course of the loan.
Borrowers who refinance should talk to lenders about Homeowner Affordability and Stability Plan eligibility requirements. If they meet the criteria, they may not have to pay closing costs normally associated with mortgage refinance.
Financial experts recommend reviewing current mortgage notes to determine if prepayment penalties of costs for closing the loan exist. Although home loan refinancing can provide reduced payments and lower interest rates, there can be substantial upfront costs.
Closing fees are often associated with home refinance loans. Some lenders offer "no-cost" loans; however, closing costs are added to the loan and interest is charged for the duration of the note. Take time to calculate the true cost of mortgage refinance before signing on the dotted line.
If you are financially unable to continue making mortgage payments or do not qualify for a loan modification or mortgage refinance, I may have a solution for your problem. Although it may seem as if there are no answers to your dilemma, options exist that you may not know about. Fill out the "we buy houses" form and I will personally contact you to discuss available options.