Monday, February 22, 2010

Home Refinance Stimulus Package - Obama's Stimulus For Mortgage Refinancing and Loan Modification

Obama's government has come up with home refinance stimulus package and loan modification programs to help all the needy owners in avoiding foreclosure. This program is designed specifically for all the borrowers who are facing financial hardships as they are not in a condition to repay the loan. The home refinance stimulus package and loan modification would cover as much as 9 million mortgages and the government would spend $75 billion for helping the homeowners.

Obama's Stimulus Package has 2 main components:

1. Refinance

2. Loan Modification

Let us discuss each one of these components in detail:

1. Home Refinance Stimulus Package

· In this program the two most powerful mortgage lending agencies of the government Fannie Mae and Freddie Mac would refinance the home loans of all the owners who owe much more amount to the bank than the actual value of the house. The only condition for this package is that the mortgage must be a guaranteed one by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount, you can gain advantage of the program.

· But there is one major condition joined with refinance stimulus package and that is; the offer is only valid for the properties which are used for residential purpose. Any property which is lying like a building and no one is living inside, will not qualify for Obama's home refinance stimulus package.

2. Loan Modification Stimulus Package

· There have been special incentives that Obama's government is going to provide to all the lenders for doing loan modification on the existing home loans of the borrowers. According to this program, the homeowners can get rid of foreclosure by getting it done. The main features of this program would be; interest rate would be reduced and it can go down to 2% only, tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.

· With loan modification, lender will also take care of the total monthly payments that a borrower is making and it would not increase than 31% of the total monthly gross income.

To know more about Home Refinance Stimulus Package and to check if you qualify

Click Here --> Loan Modification Help

President Obama has offered $1000 incentive for home owners that opt for Loan Modification instead of Short Sale Or Foreclosure.

No Cost Mortgage Refinance - Potentially a Massive Saving and Convenience For You

A no cost mortgage refinance has came into common use over the recent times owing to swelling property costs which proportionately means a growth in loan prices!

What is a No Cost Mortgage Refinance?

A no cost refinance is basically a remortgage where the consumer is looking for a fresh mortgage deal which includes no initial costs involved that many normal mortgages may have. These costs include but are not limited to assessment fees, escrow costs, lenders "trash fees" (meaning things for instance document preparing, admin fees, processing fees - fundamentally made-up fees that bump up the lenders' earnings), broker fees, title fees, etc.

This type of a no cost mortgage refinance appears good, nonetheless, the downside is that you'll be paying out a higher interest rate than you should be if you were looking for the best deal using a normal mortgage where you must pay points and settlement costs. This shouldn't put you off conditional upon your circumstances, because it could take you approximately 4-6 years to break even with the interest savings you'll make using a regular mortgage:

Who're No Cost Mortgage Refinances For?

While anybody may benefit from such remortgages, the two main different kinds of people or buyers who benefit are:

People who are not planning on keeping their house for more than around 5 more years - If you're planning on giving your property on within the near future to get a profit, then you will probably save by taking a no cost mortgage refinance! This is because of the fact that you have sold your property well before you start start seeing a saving using a regular mortgage.

The second type of buyers are people who don't quite hold the extra obtainable cash to pay for the first costs of a mortgage! These costs can often add a lot more money on top than the buyer bargained or organized for, therefore a no costs mortgage refinance is definitely the way to go in order to close the deal without having the funds for initial fee's! This sort of consumer can always remortgage in another 5 years anyhow before the mortgage begins to show bad value - which is a standard thing to do amongst house owners.

Would They Be Of Great Benefit?

As discussed above, a lot of the time this sort of refinancing is worth it because most property owners shall be remortgaging an average of every 5 years (subject to rates). However, if for any reason you wish to keep your mortgage for a lengthier time frame, then a no cost mortgage refinance results in being pretty bad value following around the 5 year mark.

It's definitely worth comparing and calculating the length of time it'll take you to break even and spending extra with each mortgages individual rates of interest. With this in mind, you are able to make the needed mortgage choice for your circumstance. The following is an example of 2 mortgages:

No Cost Mortgage Refinance

Mortgage: 300k

Interest: 6.25%

Initial Costs:

Monthly Payment: Approx 1,847

Standard Mortgage Refinance

Mortgage: 300k

Interest: 5.75%

Initial Costs: Approx 5.5-6k

Monthly Payment: 1,750 (saving 97 per month)

Approximate time required to break even if you went for the standard mortgage: roughly 5 years. Anything beyond this point makes the average mortgage less expensive than a no cost mortgage refinance. Anything shorter and the no cost mortgage wins.

More Interesting Facts about This Kind of Refinance

These types of no cost mortgages came into being at the start of the of the 1990's and were being frequently supplied then. They have recently been thought to be somewhat of a rarity and hard to get however, this really is untrue if you seek information it is possible to still find a good amount of lenders who offer a no cost refinance. They became popular as a result of inflated real estate prices which also pushed up the price and sum of loans.

A good practice with any mortgage and in particular the no cost mortgage refinance brokers, is to make certain you read every little bit of small print to ascertain that this is the correct mortgage for you and your situation. Loan companies have recently caught a bad reputation due mainly to bad lending practices from the sub-prime division of mortgage lending.

This makes buyers extremely cautious with lenders but that is a positive thing when looking for an investment as vital like a mortgage! As long as you are thorough in your research, you will be fine in the no cost mortgage refinance sector.

Want to find the best mortgage for you and save BIG? - Check out Al's FREE authority mortgage site to find the perfect no cost mortgage refinance tips for you!

jumbowholesalemortgage.com was born from Al's desire to help people save money on mortgages and increase your disposable income!