Taken from EDMONDson.com — "If you owe more on your home than it would bring in today’s housing market you may feel trapped with no options. Should you have tried to recently refinance your home you may be painfully aware that your options are severely limited. Most lenders require equity in your home before they will allow you to refinance.
You may think you have nowhere to turn, but you might be wrong. Options do exist and two of them are part of the federal government’s Making Home Affordable program.
Option one is HARP, or Home Affordable Refinance Program. Don’t you just love how all government programs seem to be required to have a catchy acronym? If your situation meets certain criteria, you could be eligible for a refinance of 105 percent and in some cases up to 125 percent of the value of your home.
Before throwing that “refinance celebration party” there are a couple of qualifications that must be met. First, you cannot be on the road to foreclosure. If you have had any delinquent payments during the past 12 months, you will not qualify for this program.
Also, Fannie Mae or Freddie Mac must own your home mortgage. This is because this federal program is made available only through these two mortgage behemoths. You find out whether or not your loan is owned by Fannie or Freddie at making homeaffordable.gov and following the four steps linked to the home page.
Your ability to take advantage of this program also will depend on your credit score, the way your current home financing is structured and other lender-specific guidelines. It won’t help everyone, but it could help you and it’s worth looking into. HARP literally can shave $200 to $400 off your monthly payment and can make the difference in your ability to keep your home.
Option two is HAMP, or Home Affordable Modification Program. Not quite as catchy an acronym as the former, but it’ll do. To qualify for this option you will need to prove financial hardship that puts your mortgage in imminent danger of default. If you travel down this path, be prepared for a thorough personal financial audit of all income and assets. It’s guaranteed not to be a pleasant experience having someone comb through your personal finances, but it could mean the difference between keeping and losing your home.
Again, this program requires that your current loan be owned by Fannie or Freddie, but this program includes those home loans owned by the U.S. Treasury. There’s not a Web site for easy look-up of Treasury-owned loans — you’ll have to make some calls to find out. Your lender should be able to help you ferret this out.
The federal government provides up to $1,500 to lenders for processing these modifications, but the final approval rests with the lender, not the government.
HAMP is not a refinance program, it is a restructuring of the terms of your current note. This restructuring can lower your payment for up to five years (that’s 60 months). Then beginning in the sixth year the borrower’s interest rate may begin to increase but no more than one percent per year until it reaches the “market rate at the time the modification agreement is prepared,” this according to the Making Home Affordable Web site.
Some of the options available to the mortgage company are re-amortize your loan to a longer term, lower your interest rate or forgive some of the principal balance of your loan. But in the final analysis, the decision rests with your lender. Once the new agreement has been reached, the modification has a ninety-day trial period where the lender evaluates your ability to meet the terms of the modification before setting the changes permanently in place.
Option three, if you don’t qualify for HARP or HAMP, there’s nothing to keep you from trying to negotiate a modification with your lender. Call them up and give it a try. Whatever you do, don’t bury your head in the sand and ignore the problem. Ignore it long enough and your lender will foreclose on your home.
If modification or restructuring your home loan is not an option for you, consider a short sale, which means selling your home at market value with the remaining loan balance being forgiven by your lender. It will take some negotiating with your lender, but this option is better than foreclosure." copied from Trey Bowden
Special to The Sun
About Me
- Couch on Houses
- Central, Ohio, United States
- Full time Real Estate agent/ consultant with HER Realtors in the Central Ohio area. Dedicated to a clients success using the latest real estate tools, honest communication, and available when you call!
5 Top Trends in todays homes
"1. The live-in kitchen. Consumers spend three to four hours in the kitchen every day, not only cooking there but using it as a place to entertain, work, craft and spend leisure time, Mirabile said. The kitchen is being reinvented as a second living room, he said, as appliances are camouflaged and functional objects are hidden or minimized, allowing people to create ambiance in the room.
2. Living within our means. The recession is changing long-held opinions on how we spend our money. Consumers are looking for quality and durability in products -- a shift away from disposable consumption, he said. They're canning food more and growing their own herbs, they're brown bagging lunches and they're shopping in bulk at warehouse clubs or stocking up during grocery store sales to save money. Read tips on how to buy and use a home freezer if you're thinking of saving money on groceries.
3. The green kitchen. Americans continue to make their lives more environmentally friendly, but they're increasingly confused and frustrated about what is really "green," Mirabile said. While they want products to be eco-friendly, they're not going to pay much of a premium for it either -- they expect retailers and manufacturers to deliver green products at competitive prices.
4. The wellness kitchen. Buying local food and/or growing your own often means it will be fresher and free from pesticides and preservatives -- in short, more nutritious, he said. Today's consumers are also interested in purifying their water and air.
5. Cooking for fun. We're a nation of foodies, Mirabile said, quoting a Nielsen survey that found one in every five households has a "budding gourmet chef." It's not just women spending more time in the kitchen, either; "gastrosexuals" are men who consider cooking more of a hobby than a household chore, and use kitchen skills to impress friends and prospective partners. The popularity of the Food Network has helped to inspire a new love with food and cooking, and he expects consumers to continue to search for new recipes, techniques and cooking tools. "
taken From Market Watch reporter, Amy Hoak.
Do you agree with Amy? Let me know.
2. Living within our means. The recession is changing long-held opinions on how we spend our money. Consumers are looking for quality and durability in products -- a shift away from disposable consumption, he said. They're canning food more and growing their own herbs, they're brown bagging lunches and they're shopping in bulk at warehouse clubs or stocking up during grocery store sales to save money. Read tips on how to buy and use a home freezer if you're thinking of saving money on groceries.
3. The green kitchen. Americans continue to make their lives more environmentally friendly, but they're increasingly confused and frustrated about what is really "green," Mirabile said. While they want products to be eco-friendly, they're not going to pay much of a premium for it either -- they expect retailers and manufacturers to deliver green products at competitive prices.
4. The wellness kitchen. Buying local food and/or growing your own often means it will be fresher and free from pesticides and preservatives -- in short, more nutritious, he said. Today's consumers are also interested in purifying their water and air.
5. Cooking for fun. We're a nation of foodies, Mirabile said, quoting a Nielsen survey that found one in every five households has a "budding gourmet chef." It's not just women spending more time in the kitchen, either; "gastrosexuals" are men who consider cooking more of a hobby than a household chore, and use kitchen skills to impress friends and prospective partners. The popularity of the Food Network has helped to inspire a new love with food and cooking, and he expects consumers to continue to search for new recipes, techniques and cooking tools. "
taken From Market Watch reporter, Amy Hoak.
Do you agree with Amy? Let me know.
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