Many people may have heard that the Chinese expression for “crisis” consists of two characters, “challenge” and “opportunity.” The expression could also describe the dual nature of the current housing market downturn – peril and potential.

Whether you are taking advantage of current prices to buy a house or trying to cope with a difficult financial situation to keep your home, it is important to understand how a mortgage works and what to do if you start to encounter payment problems.

According to an HSBC-North America consumer survey, one out of three people don’t even know if they currently have a fixed rate mortgage or adjustable rate mortgage. Moreover, three out of ten consumers surveyed have no idea of what types of fees are associated with their mortgage loan.  Loretta Abrams, senior vice president of HSBC’s Consumer Affairs, says improving mortgage know-how will help consumers protect their investment     

Before you obtain a mortgage or a mortgage refinance loan, make sure you understand the following:

•  What types of mortgages are you considering? Is it a fixed rate mortgage or adjustable rate mortgage (ARM)? What are the advantages and disadvantages to your personal situation?
• What’s the interest rate and how much are the fees associated with the mortgage loan? Costs such as points and processing fees can be an added two to ten percent of the loan. You don’t want to be surprised by an extra $2,000 or $10,000  in fees when you close your loan;
• As a general rule, you should spend no more than 28 percent of your gross monthly income on housing expenses. Besides the mortgage, remember to include taxes, insurance and other related expenses;
• If you have an adjustable rate mortgage (ARM) loan, make sure you know when the payment can change, by how much, and what the maximum payment can be. Check into options like mortgage refinancing before your adjustable mortgage resets.
• Do you have money to cover costs if your roof suddenly leaks or your furnace goes out? Set aside an emergency fund (three percent of your home value) for maintenance and other unexpected costs.  

If you have payment problems or you’re just having trouble keeping up with your mortgage payments, remember it’s never appropriate to “do nothing.”  No one – neither you nor your lender – wants you to lose your home. The earlier you take action, the more options you may have.

 Take the following steps:

•  Contact your lender at the first sign of trouble.  Respond to all your lender’s communications, describing your circumstances;
• If you prefer to speak first to a trusted third party about your options, call Homeowner’s HOPE™ Hotline, 888-995-HOPE. You can also dial 1-800-569-4287 or visit www.HUD.gov for a HUD approved counselor
• Take advantage of free resources on YourMoneyCounts.com, available in both Spanish and English, to find information that will help you manage your finances.

 Did You Know?

According to a  Financial Literacy Survey, one out of three people don’t even know if they currently have a fixed rate mortgage or adjustable rate mortgage. To learn more about mortgages, visit http://www.beneficial.com.

One must not be caught asleep and incoherent when it comes to refinancing mortgages. You may either be quick or careful about it, but if it turns out to be a pathetic effort, it tends to show all throughout the whole thing. Why rely on rabbit’s feet and horseshoes if you can learn about the things that you need to consider as you go through the whole process? These things need not be so hard as long as every bit of it is thought out and acted upon appropriately.

Since a mortgage refinance is basically loaning money to pay an existing loan. The logic of doing this is that the loan that you end up with may likely have a lower interest rate than the previous one, as well as having improved credit scores, and being able to use your home’s existing equities once you do. Lenders mostly reserve their best loan terms for people who have high credit scores, since they would consider those who have that to be less liable and more likely to pay up. They then do what they can to give such people some incentives such as a lower interest rate and more. So if you have gained such, refinancing is a good course of action.

Your queue to refinance is a significant lowering of interest rates. Always remember this if you are paying mortgage and stay vigilant. There is no reason not to and everything that entails it does have its benefits, one of these being great cost savings as time goes by, which shows how good it can be. You have to be careful though so that the new interest rates that you are considering are actually low enough to offset the costs of the new loan. If you are in doubt, consult an online mortgage refinance calculator that is readily available with one shot in a search engine.

It also gives you a chance to use the existing equities of your home, including cash out options which gives you the ability to use it for anything you wish to use it on. You can use them for maybe new furniture, getting your plumbing fixed, a new coat of paint, or some ornaments. Basically, home improvements are a good idea to use it on, which can potentially increase the value of your home to a good extent. Also, you can spend it on tuition fees, emergencies, a new business, and so on. It is not just about saving money, it is spending that money in the most worthwhile way. You are not to refinance your mortgage only to use that money you saved with reckless abandon. To do so, you can gain it through a equity credit line where the funds are there for homeowners but not given until requested, so you will have to do some work in that. There is usually a limited time for this “grace period.”

You will certainly be looking forward to grapple and bang with bureaucracy just to save yourself from spending too much, as most people certainly do. One thing worth remembering before you set off to this endeavor is basically to think things through before you take it to the next level. Nothing is beneficial without risk, after all.

Improve Your Finances with a Debt Consolidation Mortgage Refinancing Loan

If your high-interest rate credit card debts are costing you a fortune, you could save money, reduce your taxes, and pay off your debts faster with a debt consolidation mortgage-refinancing loan. You have two options for a debt consolidation loan: mortgage refinance or home equity.

Mortgage Refinance Is Best for Big Debts

If you have credit card debt totaling more than $50,000 dollars or other high interest debts, then a mortgage refinance loan is the way to go. You’ll need to qualify for a new loan, but most people are offered a low rate if they’ve built equity in their homes and have a credit score over 700.

With a mortgage refinance loan, you can set a term anywhere from 10-30 years and the interest is tax deductible. It’s recommended for larger loans because the longer time frame stretches out the payments to an affordable level. Depending on the amount of equity you have, you could also borrow extra money to make home improvements like installing a new roof or remodeling an antiquated kitchen or bathroom.

Home Equity Loans Are Best for Small Debts

If you have smaller debts in the $10-20,000 range, then a home equity loan is a better choice. Your rate will be slightly higher than a fixed rate mortgage loan, but you’ll have little or no closing costs and receive the money much faster. You can also set payment terms for just a few years rather than 25-30.

There are several advantages to getting a home equity loan instead of other debt consolidation loans:

* Your interest rate will be lower than you can get with a credit card

* You won’t pay any balance transfer fees

* Your interest is tax deductible.

Borrow Safely to Protect Your Home

Whether you get a home equity or mortgage refinance loan, make sure you only borrow an amount you can afford to repay. If you can’t make your payments, you could lose your home. When deciding how much to borrow, keep in mind that you should never borrow more than 80% of the current value of your home so you have a cash cushion in case home prices decline and you need to sell.

You should only borrow funds against your home if the interest rate on the debt is higher than the interest rate on your home equity loan and isn’t tax deductible. It wouldn’t be worthwhile to get a 7% home equity loan to pay off a student loan fixed at 4%.

If you borrow smartly, a debt consolidation mortgage refinance loan or home equity loan can save you hundreds of dollars in interest and reduce your taxes. If you own a home, consider this solution for medium to large debts.

For more articles on Debt Consolidation Mortgage Refinancing Loans, visit: http://www.bills.com/debt-consolidation-mortgage-refinancing-loan/

Getting a Georgia mortgage refinance after bankruptcy isn’t as difficult as most people think it is. Because you already have a current mortgage, and will simply be replacing this loan with a new loan, lenders don’t feel there is a great deal of risk involved when offering you an approval.

How Soon Can You Refinance?

Within 6 months of filing bankruptcy, you will be able to find a lender willing to offer you a Georgia mortgage refinance. In some cases, you may be able to refinance even sooner. That said, the longer you wait, the easier it will be to get a low interest rate.

What Will Lenders Look At?

When reviewing your request for a Georgia mortgage refinance after bankruptcy, a lender will look at several different things to determine whether of not you are eligible for the loan. Income, savings, and the ability to pay back the loan will all be items of focus, but the big deciding factor will be your credit report. Lenders want to see that you have made an effort to keep up with your current bills, as well as any lines of credit established after the bankruptcy was filed.

How Much Will the Refinance Cost?

The cost of your Georgia mortgage refinance will depend on how much money you are borrowing, the state of your credit score, and the level of risk the lender feels they are assuming. The biggest cost will be in interest. Currently, rates on Georgia refinance loans average 5.53 percent. Borrowers who have a low credit score or a bankruptcy on their credit report will most likely be expected to an additional 2 to 4 percent points more than this average. The other major expenditure for a Georgia mortgage refinance will be closing costs. These costs typically average just over $3,000 for Georgia residents. The good news is that your bankruptcy should have little to no effect on these fees.

Buying points is a standard offer given to most people when they consider a mortgage refinance. This option was most likely presented to you when you applied for the initial mortgage and its benefits are equally as important to a mortgage refinance.

Points are an upfront fee charged by the lender. This fee is separate from interest and is designed to increase the profit to the lender. The cost to purchase one point is equal to 1% of the total principal amount of the loan. By purchasing points will lower your interest rate.

Whether purchase points is a good idea for you or not depends on if you will maintain the property long enough to recover the additional cost incurred from purchasing the points. For example, a lender gives Jane Jordan the option of a $90,000 loan at an 8% fixed interest rate. A 2-point purchase would cost $1800 due and payable at closing. The lender also offers a $90,000 loan at 9% with no points available. It will take over 2 ½ years to recover the $1800 paid for points. If Jane plans to remain at that location for longer than that time she will break even or make a profit. If she anticipates relocation under that time frame, refinancing and purchasing points will cost her money and is not worth it.

When considering buying points, also crunch some numbers on what that same amount of money invested in another way could generate if there were a higher rate of return. It is important to know what your goals are when refinancing so that you can make good decisions.

If you are financing new mortgage loans, purchasing points on a residential mortgage can deduct the money that you need to pay on that year’s income tax return. However, if you are buying points to refinance your home, the IRS considers this prepaid interest. This means, you will have to deduct them over the life of the loan rather than all at once at closing. You will need to some advice from your tax advisor or your accountant for his or her expert opinion on point deduction.

If your ultimate goal is to be debt-free then purchasing points may allow you to achieve that goal in less time. Only you know the details of your situation and it is important that you consider all aspects of your life and finances that could affect your goals, your mortgage refinance and your overall financial plan before making any significant financial decisions. See below for more information on Mortgage Refinancing.

Got a “bad” mortgage refinance deal? Blame yourself…

And what to do about it now in 5 simple steps…

First of all, let me clarify one thing:

There is no such thing as a “bad mortgage”, it’s just that the mortgage you have may not be the right one for you.

The primary reason why you got that particular mortgage, was probably because you really did not know what questions to ask and the loan officer was more interested in getting a fat paycheck from your “deal”.

Granted, there are exceptions to every rule. In this article however, I will not talk about the possibility that you were lied to by your loan officer or other circumstances. And even then, it’s still your responsibility because you signed the loan documents!

For most people, a home is the largest investment they ever make, yet people seem to think that “shopping” for a loan is as easy as finding the cheapest gas for their cars.

The way you probably ended up with your current mortgage probably started one of two ways:

1.A “telemarketer”, who tried to get you to refinance, contacted you.

2. Being bombarded with tons of advertisements, for mortgage products, you contacted various lenders yourself.

Either way, your first question was probably “What’s your rate?” and the next question most likely “How much are your fees?”

In the spirit of “shopping around” and pretending you actually knew what you were doing, you probably called a few more lenders, until you heard what you wanted to hear.

This was Strike one, two and three before you really got started!

But now what?

The past is the past. Following are 5 simple and easy to follow steps to move forward now:

1. Find a mortgage broker you can trust. Don’t know how? Ask your attorney, financial planner or CPA/Tax consultant for referrals and select someone you feel comfortable with and who you can trust. Stick with them, and build a long-term relationship. Just like you do with your family doctor, or auto mechanic.

2. Discuss your current financial situation and future goals with your “newly found” mortgage consultant. Obtaining a mortgage should not be viewed as an isolated transaction. It needs to complement and be part of your overall financial plan.

3. With literally hundreds of different loan products in the marketplace, your mortgage consultant should narrow down the field of potential scenarios, depending on your circumstances and future plans. The different programs need to be explained, as well as the advantages and disadvantages.

4. Ask yourself if it makes sense to refinance in the first place If the answer is yes, you will now be able to make an informed decision, and select the loan program that you feel most comfortable with.

5. Start the “actual” application process, and work with your loan consultant to ensure a smooth transaction.

For a FREE complimentary mortgage review, other Real Estate related articles or to subscribe to our newsletter, visit:

http://www.arelimortgage.com

If you are interested in learning how to refinance a home loan, then you should be familiar with that there are a number of important things you are going to have to take into consideration. In the end, in order to make intelligent choices regarding the issue of refinancing a home loan and related matters, you have to be an informed consumer, and this means making yourself as knowledgeable as you can on the matter.

Principally, refinancing your mortgage means taking out a new loan to pay off the original loan that you took out for your mortgage, and in the end the specific purpose is to save by having lower interest rates and as a result paying less in monthly mortgage payments.

It is general knowledge that to get the best in refinancing you will have to make comparisons regarding various lenders although it is also something that can cause a certain amount of misunderstanding. Nevertheless, you will still need to look at different lenders and judge against rates, points as well as fees and also be conscious that even though the rates of interest may be low, it still does not assurance the best option and may even not be the best home loan mortgage refinance.

One more main reason that people refinance home loans is to include a chance to shorten the term of their mortgage, and the prospect to tap a home’s equity in order to finance a large purchase is another common reason.

Securing a low interest rate is unquestionably the most general of all reasons, and as well the most understandable. Reducing your interest rate will not only facilitate by saving you money overall, but as well it increases the rate at which you build equity in your home, and can still reduce the size of your monthly payment, which is great, in particular if you have a lot of other bills that you have to worry about as well.

There are certain situations in which refinancing your mortgage can be amazingly beneficial, but it is essential to understand that this is not true for all situations, and so you need to think about a few different things in order to determine whether refinancing a home loan is a good idea for you or not.

For example, refinancing a home loan would be favorable for you if purchased your home at a time where interest rates were higher and you are now considering refinancing at lower rates. This is for the reason that you will end up saving money by doing so, and so obviously it would be advantageous to you.

Everyone who is interested in refinance loans ought to know about how best to reduce the amount that needs to be paid because it will help you to save money in the process. In consequence, you need to take a peek at your own credit report, see about your current loan, exercise caution about the loan that you agree to, ensure that there are no closing cost refinance loans which frequently belie the claims made by lenders, stay away from paying for appraisal fees or even application fees particularly if your credit history is good, and in conclusion, makes sure that your repayment does not last longer than the lifetime of the product that you buy.

A significant step you need to take when taking into account refinance loan is to have your credit report copy on hand so that you can fix any errors present in the credit report and so lower how much the loan is going to charge you. Subsequently, you must peruse your documentation that accompanies your existing loan and find out if there are charges for prepayment penalties since some companies may ask you to pay fees for leaving them despite the fact that many will also not enforce this clause when you refinance with them.

In any case, prior to selecting refinance loan be certain that you don’t agree to loans that have accompanying pre-payment penalties because there are many refinance loans that do not have such conditions. Along with, be careful not to accept tempting offers that have need of that you accept pre-payment penalties because of the accompanying lower rates of interest offered. It is at all times better to make an informed decision and veering towards the deal in which there is visible profits to be made will always be a better idea.

In addition, there are clear to be closing cost refinance loan which will usually mean higher rates of interest as this is a means for the lender to create money which is why they generally make use of pre-payment penalties. Another feature you should consider regarding refinance loan is that if your credit history is good in that case there should be no need to pay application as well as appraisal fees, and in case a lender asks you to pay these fees, you would be better off looking for refinance loan from elsewhere because there are many lenders who will not charge you other than the recording fees that are merely a small amount that you should not mind paying.

Last but not least, it is by no means a good idea to borrow for longer than the product you want to purchase will last you since otherwise you will end up paying for something that has lost its worth.

There are times when it’s a good move to refinance your mortgage. Simply put, refinancing means you borrow the money to pay off your current mortgage. This is generally done in order to lower mortgage payments and/or take advantage of lower interest rates.

If you have an adjustable rate mortgage (ARM) it will save you a considerable sum to refinance during periods of rising interest rates. You can choose to refinance to a fixed rate mortgage, which guarantees that the rate you finance at stays the same no matter how high interest rates rise.

If you already have a fixed rate mortgage but interest rates have fallen below what you’re presently paying, it might be a good idea to look into refinancing. However, if you’re planning to sell your home within the next couple of years it would not pay to refinance.

There are many factors that determine the cost of refinancing. One of these is points, which are prepaid fees. Each point is one percent of the amount that you are borrowing and these points are subtracted from the mortgage proceeds that you receive.

Most lenders will charge a point as a fee for the loan. They may also charge points if your loan’s interest is less than the current market rate. This is how the lender makes a bit more money and you get lower interest. If you plan to stay in your home for a long time and can afford to pay more points in the beginning, this may actually save you money over the long term and allow you to get a better interest rate.

There are other costs involved in the refinancing process. Private mortgage insurance (PMI) premiums will be added into your payment to insure that the lender is recompensed should you default on the loan. PMI is tacked on when the loan amount is more than eighty percent of the property’s value.

Other refinancing fees include having your home appraised, a title search, county recording fees and various processing fees. All these costs must be taken into account when you are decided whether to refinance your home. You should also consider any tax savings you may lose if you refinance. By paying less interest on your mortgage you will have less of a deduction on your yearly tax return.

So will it pay you to refinance? You can determine this by dividing the total of the points and all fees and closing costs involved in refinancing by the monthly savings that the new loan affords you. The final monthly savings is your reduction in interest less any tax advantage losses and the PMI premiums your new loan may involve. If the final figure actually does save you money, it may be a good idea to refinance.

There are lenders who offer to roll the points and closing costs into your new loan. While this may seem like a good deal at first, it would be better to pay the costs up front rather than pay interest on that amount for the life of the loan.

As always, there are unscrupulous lenders who are always on the lookout for people to rip off. Most mortgage lenders will charge document and administrative fees separately but the mortgage origination fee should cover these. Be sure to ask your lender to waive, or forego, these charges up front.

Your lender will obtain a credit report, which will cost between $6-12 and perhaps involve $20 in courier fees. However, you can be charged as much as $200 for this! Be sure that you are aware of what your lender will charge you for getting a credit report and negotiate if the amount seems exorbitant.

Some lenders advertise refinancing with no points or closing costs. If you choose to take advantage of such an offer, be sure to read every word of the contract and ask questions if something seems untoward. A no-cost refinancing often hides the costs you generally pay in other fees added to the mortgage and actually do cost you as much as paying the points and closing costs up front. You may end up paying for them for the life of your loan.

Thinking about refinancing your Louisiana mortgage after bankruptcy? If so, head for the web. The Internet will prove to be your best resource during the refinancing process. Here are just a few of the things you can do online before applying for a Louisiana mortgage refinance after bankruptcy:

Get Your Credit Report
Anytime you apply for a loan, you should pull a copy of your credit report to see what lenders will be looking at. This is especially true if you are applying for a Louisisana mortgage refinance after bankruptcy. You can visit the website set up by the three major credit reporting bureaus or you can sign up with one of the many companies that offer credit report services.

Estimate the Value of Your Home
For the most part, home values in Louisiana have substantially increased in the last few years. To get an estimate of how much your home is worth today, you can use one of the many home value calculators that can be found online. These calculators allow you to punch in your address and/or zip code and pertinent information about the property. In the end, you will be given a roundabout estimate of your home’s value. This information will prove to be very important when determining whether or not you can refinance your mortgage after bankruptcy.

Estimate the Cost of Your Loan
Before getting a post-bankruptcy Louisiana mortgage refinance, you need to find out how much the loan is going to cost you. The two main costs involved will be your interest rate and the fees you have to pay at closing. There are several different sites dedicated to providing this information to Louisiana borrowers. Take advantage of it and use these sites to research the affordability factor of a Louisiana mortgage refinance after bankruptcy.

Refinancing a mortgage may help lower monthly payments by changing the mortgage refinance plan, consolidating debt or liquidating the home equity available for personal usage – including home improvement projects. When you refinance your mortgage you want to make sure that the fees or penalties you pay are well worth it. Remember that by refinancing your house acts as collateral meaning you are in the risk of losing it if you default the mortgage.

Refinancing to a Fixed Rate Mortgage

Consumers who have obtained an ARM and have decided to refinance to a fixed rate mortgage usually are on the right track. Adjustable rate mortgages are cheaper in the long term but require higher monthly and uncertain payments. By refinancing to a fixed rate mortgage you will have a better picture of how much you have to pay each month, giving you a better idea of how to spend your income wisely.

If for some reason you have decided to refinance your current mortgage to an adjustable rate mortgage, be sure to check if any down payments or penalty fees apply to your case. ARM are usually obtained by people looking for a short term mortgage and can manage to pay high and variable interest rates.

Don’t Make the Mistake of Refinancing Twice

Refinancing a mortgage can be very beneficial for several reasons. However, refinancing more than once is nowhere close to beneficial. You will have to pay 2 times a down payment and additional closing costs. If you get the idea of refinancing to improve credit scores, then think again. It is easier to maintain a proper monthly budget, pay all your bills on time and you will find you credit score to boost. Don’t place your home in extra risk by paying money that won’t give you any financial benefits. Do some due diligence before getting an online home loan from a mortgage lender.