Archive for May 24th, 2011

How Can You Find The Best Mortgage Rate?

To obtain a best mortgage rate is always the best priority any individual may consider if applying for home loan. Lots of lenders are willing to offer their clients with great deals. But you need to be aware of some lenders that are charging lesser rates but have lots of hidden charges. So you need to be cautious in selecting your lender. The best thing for you to find the most ideal lender is to gather information regarding mortgage loans. Through this, it can help you enough to understand every thing prior to your application of loan.

Discovering the best mortgage rate for your financial loan will let you save lots of money in the end. You need to research to find the best mortgage rate for you. Here are some steps for you:

• Mortgage rates are lower if you opt to buy a property during the time of economic chaos.
• Make sure to check with the mortgage rates everyday, it may fluctuate often. Waiting for some time before getting your mortgage may benefit you to save money from your monthly interest.
• Select the mortgage company that can give you a lock for lower interest rates if you decide to purchase from them.
• Improve your credit rating because this is a great help to get the best mortgage rates. By doing this may delay the purchase of your property but can give you bigger difference for the mortgage rates.
• Stick with permanent rate mortgage and evade from flexible rate mortgages.
• Put in more money for down payment. If your down is lower than twenty percent, you will pay PMI (Private Mortgage Insurance). This is solely for the advantage of the financing bank, but it comes out from your payment.
• Evade points. Paying by points when you first have your mortgage might seem attractive, but then you are just paying technically more upfront that gets money from the down payment you gave. Moreover, if you plan to reside in your house for just a short period of time, you will really lose your money by means of paying points.
• Ask for removals or free discounts. Certain agency will be eager to take away fees to obtain your business. Furthermore, some companies such as Bank of America provide a mortgage without fees if you meet up certain conditions and terms.
• Select homeowners insurance that has bigger deductible.
• Refinance your credit, if needed. If you could refinance and acquire a notably better rate, then take it.

How Can You Compose a Hardship Letter for Loan Modification?

A hardship letter for mortgage loan modification is an essential step in requesting for a modification of mortgage loan. Lending and financing institutions should review the financial hardship of the applicant to determine his/her eligibility for adjustment of home mortgage loan.

Here are the instructions to follow how to create a hardship letter as a prerequisite in requesting for loan modification:

1. Before you start to make your hardship letter, you have to research first on the guidelines on loan modification to determine your eligibility. A few of the guiding principles are the following:
• The onset of the mortgage must be before on January 1, 2009
• Home should be owned individually that means the applicant is the owner of the home
• Home should be occupied
• The house must be your primary residence
• The lender should have curbed to an agreement with the treasury

2. Make a research on what hardship details are required by the lending institution to approve your application for modification of loan. The following are some examples of the details:
• Total amount of the mortgage expenses
• Kind of mortgage
• Date the mortgage was entered
• Gross monthly household income
• The actual value of the property
• Status of your loan payment

3. Include in your letter all pertinent data like the mortgage address, number of the loan and contact information to facilitate easily your loan.
4. Explain briefly hardship that includes financial implications, date of loan, and anticipated period of the loan in your letter for loan adjustment.
5. Provide the monthly mortgage operating expenses called the PITIA comprising principle, taxes, interest and insurance (hazard, homeowners and flood).
6. Present in your letter the gross income statement per month, utility bills, and tax returns to facilitate the easy processing of your loan modification request.
7. The lending institution will utilize these numbers stated in your hardship letter to form a correct DTI (Debt to Income) ratio in order to evaluate if your difficulty meets the target requirement to qualify a mortgage loan adjustment.

The lending institution will really grant your request if you can compose an honest hardship letter for mortgage loan modification.

Can You Qualify for the Federal Modification Loan Program?

If you have a hard time every month to cope up with the amount of money to pay regularly the mortgage loan, you may seek for a modification loan program from the lending source. Last 2009, the government launched the Home Affordable Modification Program to persuade lenders to reduce the monthly payments of mortgage of homeowners, who are at risk of failing to pay and losing their homes to foreclosure. To avail of this modification loan program, you have to meet the following requirement:

1. Your residence – To become eligible for a reduced monthly payment of your home mortgage, you should seek for modification for a house where you permanently reside. If you have difficulty in paying regularly the mortgage bills in your second house or a residence for vacation purposes, you won’t be qualified for modification in that residence with the Home Affordable Modification Program.

2. Your mortgage loan – You may qualify for an adjustment through this program of the federal government if your mortgage loan has balance of your loan is seven hundred twenty nine thousand and seven hundred fifty dollars or less. If the debt is more than the specified amount, the lender is not allowed to adjust your home mortgage loan by means of this federal program.

3. The time—The Home Affordable Modification Program is just open for homeowners who got their home mortgage loans before or on January 1, 2009. If your loan was approved after the specified date, you could still be qualified to request formally your lender to grant you the modification. The lending source will have to consent, even though without the monetary incentives from the federal government being granted to lenders that adjust home mortgage loans through the program.

4. Your financial state—The federal government also imposed monetary limitations that control if you are qualified or not to apply for loan modification through the program. You may qualify only for adjustment if your loan payment every month including the taxes, interest, insurance and dues of the association of homeowners will have a total amount of more than thirty one percent of the gross income monthly. You should be struggling also to make your monthly amortization to qualify to this program.

The program of the federal government is only open for homeowners who are struggling to pay their monthly payment of their home loans.