How to Refinance your Home and Prevent Foreclosure
The average person today in this country is possibly faced with a property value that is gradually declining as a result of the housing crisis that has affected the nation as a whole. Also many households are dealing with the possibility of at least one income earner being affected by a job loss in which is adding to the current hardships that many people are facing these days.
Due to the current hardships the economy has created, many home owners are now finding themselves in financial trouble and could risk losing their homes to foreclosure. However, many are turning to the possibility of looking for ways to refinance their homes to prevent a foreclosure.
refinance mortgage to prevent foreclosure
The idea of re-setting that loan can come in two ways. A.) Going back to the bank and asking for a new loan, B) Modify your existing loan. However there is a catch 22 , in that in many cases, the very event that has caused the problem will actually disqualify you from refinancing your home. So you don’t get a new loan, but you could modify that loan.
In a large number of cases, many people have loans that are probably as much or more than the actual value of the property, in which has made many home owners feel that they would not qualify for a refinance or a loan modification.
However this is not necessarily true.
If you are a person that is still working, and you’ve got a loan that is due to reset in the next year or two and you know that there will be a jump in payments, you can go ahead and refinance your home up to 105 % of the value of the property. This is possible through the new Fannie Mae and Freddie Mac plan established by the Obama administration (HASP) Housing Affordability And Stability Plan.
So there is in reality 2 options available through the new plan, you can refinance, or your can attain a loan modification. A loan modification is exactly what the term implies, you are not getting a new loan, nor are you getting rid of the old loan, but you are essentially modifying the existing loan with your existing lender.
Most people would be ill advised to try to represent themselves in these dealings, as the procedures and issues involved can be quite complex. Remember that the banks and financial institutions are NOT on your side, they are professionals who know all the ins and outs of the legal proceedings which is intended to result in the best possible deal for themselves. There fore it is highly recommended that you consult with a professional legal team that will look out for your best interest.
At time of this article, the interest rates have fallen to the lowest point in the last 50 years , creating a great opportunity for those looking to re modify their existing loans or seeking to refinance altogether. Many people have recently been able to reduce their interest rates by as much as 2 percentage points, resulting in savings totaling in the thousands of dollars for many home owners.
To put that in perspective, in some cases people have seen their mortgage payments drop from anywhere between $200.00 and $400.00 per month, which is a very significant amount in savings for any household.
If you are looking to refinance or modify you existing loan under the new government plan you may visit www.financialstability.gov for more information.
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