Homeowners can avoid foreclosure and mortgage default be refinancing or getting a home loan modification through President Obamas housing stimulus plan. Millions of homeowners can use this plan to see savings of hundreds of dollars per month on their mortgage, and more importantly, save their home. Here is what you need to know to use this plan for yourself:

-Home loans which were signed prior to January 1st 2009 are able to use this mortgage bailout plan for their situation. Mortgages which were closed on after that are eligible for an $8000 tax credit, but that is different.

-Mortgages from Fannie Mae or Freddie Mac and are over 31% of a homeowners income, are eligible for a home loan modification. This modification will lower the homeowners monthly mortgage payment to less than they are paying now, or lower than 31%. This is a savings of 20% or more for a lot of homeowners.

-Homes which have dropped in value, can now get approved for mortgage refinancing or modification with this stimulus plan from the Government. Homeowners all over have seen their property values drop due to foreclosures, a bad housing market, tightened lending, and bad mortgages.

-Mortgages which exceed the homes market value by as much as 5% will still qualify for home loan modification or refinancing. Previously, a homeowner who owed more than the homes worth would never have a chance at approval.

Foreclosures and mortgage defaults can easily be avoided if a homeowner just takes action. The Government put this plan in place to help struggling homeowners, and if you are, you need to take control of your situation and get a mortgage refinancing or home loan modification through this plan before time runs out. You do not want to lose your home if you do not have to, and now you have an option.

By: Michael Petrone

Knowing when to refinance your second mortgage is a difficult decision. Prior to making the decision to refinance make sure that you will benefit from refinancing. Either you should be saving a few hundred dollars a month from lower interest rates or you should be switching from an adjustable rate to a lower fixed one.

Lower Rates = Savings

Refinancing to a new mortgage with a lower rate than your current loan can save hundreds of dollars a month. To make sure that you are saving money and not wasting it you should compare your current home loan with a potential new loan. Knowing when to refinance is important so always be aware of what is going on and check for lower rates whenever you can. By combining you first and second mortgages you can reduce any possible fees and high rates, but it may only work if the first mortgage loan comes with a high interest rate.

Rising Rates – Protect Yourself

Although refinancing will lower your interest rate there is still a possibility of the rate increasing. However if your second mortgage has an adjustable rate it can protect you from the possibility of increasing interest rates. Although there may be caps put in place you loans length could be extended and as a result the total increases. It is possible to find a fixed rate that is lower than an adjustable rate. With a fixed rate you can rest easy knowing your payments will not increase from one month to another.

Refinancing – Timing Is Important

Most times with home equity loans the majority of the interest is paid at the beginning of the pay period. What this means is that by the half way point of your loan you will be paying less interest and more on the principle of the loan. In order to save the most possible it is best to refinance early. Knowing when to refinance can be difficult to decide but is well worth the possible savings every month.

Although refinancing is a good move it is best to hold off if you plan on moving soon. It can take a couple of years to recoup the cost of refinancing. Refinancing before you move can end up costing you money instead of saving you some. Look into the possibility of refinancing and see if it will work for your situation. It can be the answer that you have been looking for this whole time.

By: Michael Petrone

If you are in the process of refinancing your mortgage loan, your new mortgage lender may require an appraisal prior to approving your loan. Here is what you need to know about appraisals, including tips to help maximize the equity in your home.

Your home’s appraisal is a written estimate of the market value of your property. Mortgage lenders use the appraisal to determine how much of a mortgage you qualify for. When you are refinancing your mortgage, the appraisal will also determine how much equity you own in your home. If you will be borrowing against this equity, the lender will most likely require that you pay for a new appraisal prior to approving your loan.

The appraiser is a licensed professional that will do a market analysis of sale prices for similar properties in your neighborhood and evaluate the condition and amenities of your home. The appraisal will require a thorough inspection of your home inside and out.

When you are refinancing your mortgage your goal is for the appraised value to be as high as possible. There are a number of improvements you can make to your home that will improve the appraised value of your home; however, don’t go overboard. New carpet and a coat of paint will go a long way to improve the appraised value. What you don’t want to do is purchase top of the line appliances; these purchases rarely give you enough of a boost in your home’s value to justify the expense. The best thing to do is make sure your home is up to snuff with your neighbors as far as the amenities and add-ons you invest in to improve your home’s value.

When searching for a home appraiser, look for an experienced professional licensed in your area. Your realtor may be able to recommend a good one; if you are not able to find a recommendation try contacting the Appraisal Subcommittee. The ASC maintains a database you can access on their website to help you locate a licensed appraiser in your area. You can learn more about your mortgage and the appraisal of your home by registering for a free mortgage guidebook.

By: Louie Latour