13
Mar
By First Rate Financial Group
Mortgage

6 Ways to Fight Foreclosure

6 Ways to Fight ForeclosureSometimes, things don’t go as planned. Despite the best intentions, there are times when it’s impossible for homeowners to fulfill their mortgage obligations. When your misfortune turns into a foreclosure notice, these tips will help you control the situation and realize the best outcome.

Work With Your Lender

Open the lines of communication with your lender to stall the foreclosure process.

  • Call your lender and explain your predicament. Give them specific details about the nature and estimated length of your circumstances. Many lenders are willing to temporarily modify payment terms to temporarily accommodate certain hardships.
  • Apply for a loan modification. If your credit rating has improved or market values have shifted in your area, it’s possible to negotiate friendlier terms that lower your monthly payments.
  • A forbearance allows you to pause or drastically reduce your mortgage payments for a short period. However, you’ll have to pay everything owed in a lump sum or via larger monthly installments.

It is in your lender’s best interest to keep you in your home. Contact them early to avoid unnecessary issues.

Take Legal Action

Keep the law on your side to ensure you have the best chance at keeping your home.

  • If you believe your foreclosure is unlawful or in error, you will have the chance to present your case in court. Respond in writing to the official foreclosure complaint as soon you receive it. This eliminates quick default judgments.
  • Talk to a lawyer about your case. Even if you can’t afford to retain one for the trial, invest in a short sit-down session with a knowledgeable legal representative to get the facts straight and ensure you’re ready to present your defense.
  • Personal bankruptcy is a final strategy for saving your home. Most chapter 7 and 13 filings allow you to keep your primary residence while reorganizing your debt.

Foreclosure is less of a threat when you understand the laws and procedures that govern the process. Educate yourself on your legal options.

A temporary setback doesn’t have to ruin your entire life. With these tips, you won’t have to lose your dream to foreclosure.

Contact your trusted home mortgage professional to discuss current financing options.

12
Mar
By First Rate Financial Group
Mortgage

Is Now a Good Time to Cash Out Your Home Equity?

Is Now a Good Time to Cash Out Your Home EquityFor many Americans, their home is their primary investment. The equity stored in your residence can be a source of available cash for home repairs, upgrades, or for financing the purchase of investment properties. However, few homeowners really understand the process that results in home equity. 

What Is Home Equity?

Your monthly mortgage payment goes towards two different amounts. The first is the interest that you pay for the loan. The other is your principal payment or the amount that counts against the initial amount that you borrowed for the purchase. Depending on the details of your loan contract, each payment is generally split between these two types of charges.

Over time the amount that you’ve paid towards the loan’s principal grows your equity position. With each payment, your equity grows as well. Once enough equity is accrued, many lenders allow homeowners to access those funds via an equity line of credit, home equity loan or a cash-out refinance. 

You’ll have to pay interest on any monies you withdraw from the second mortgage or higher loan amount upon your refinance. With home equity lines, however, these loans only charge interest on the money that you actually use. You can secure a home equity line of credit for a certain amount and not be liable for a penny in interest until your first withdrawal.

How Can You Calculate Potential Equity?

There are 4 main factors to consider when calculating your home’s equity.

  • Home value.
  • Monthly mortgage payments.
  • Down payment.
  • Any liens or additional mortgages on the property.

Imagine your home is currently valued at $300,000. With cash down payment of 20%, your home’s starting equity is equal to your initial $60,000 payment. Each payment slowly increases your equity until you have full financial ownership of your home.

Talk to your lender to understand how interest in applied to each payment. For fixed rate loans, you can easily figure out how much of your mortgage payments are immediately applied to the loan’s principal. An easy way to see this equity build up on a monthly basis is to reference an amortization schedule. Your lender should be able to provide this for you at no charge.

For property owners with liens and additional mortgages, add the value of those items to what’s still due on your primary mortgage loan before completing the calculations.

Home equity is a flexible financial tool that you can use to improve your property, expand your business, or treat yourself to something special. Plan carefully to get the most out of your home equity line of credit.

If you are interested in a refinance or a home equity loan, be sure to contact your trusted home mortgage professional.

13
Aug
By support
Home Mortgage Tips

Mortgage Terms 101: Understanding ‘Cash-Out Refinancing’ and How to Determine if It’s Worth It

Mortgage Terms 101: Understanding 'Cash-Out Refinancing' and How to Determine if It's Worth ItWith interest rates remaining near historic lows for the past several years, many of your friends and neighbors may have already told you that they have refinanced their home mortgages once or even a couple of times. A cash-out refinance can provide you with several important benefits, but it is not the best option for all homeowners. By learning more about what a cash-out refinance is and what the pros and cons of this type of refinance loan are, you can make a decision that is best for your current and future plans.

What Is a Cash-Out Refinance?

When you refinance your home mortgage, you can select a rate and term refinance which does not pull equity out of your home, or you can select a cash-out refinance to access some of the equity in your property. You can research your property value and your outstanding principal balance to determine how much equity you have available. Keep in mind that most lenders will not allow you to access all of the equity, and you can obtain more information about the loan amount you may qualify for by speaking with a mortgage professional.

The Benefits of a Cash-Out Refinance

If you decide to apply for a cash-out refinance loan, you may be able to walk away from the closing table with tens of thousands of dollars or more. This is money that you may use for any purpose, including home improvements, paying off high interest rate credit cards, sending the kids to college and more. In addition, you may enjoy other benefits from refinancing, such as lowering your interest rate and mortgage payment and adjusting your loan term to meet long-term goals.

When a Cash-Out Refinance May Not Be Advisable

A cash-out refinance loan can be beneficial, but there are instances when it is not the best solution. The loan will adjust principal reduction, the loan payoff date, the interest charges and other factors. The adjustment of these factors may make your new loan less advantageous for you in some cases, so you should carefully consider the full impact of refinancing before you decide to move forward.

From learning more about the benefits of refinancing to finding a competitive rate for your new mortgage, there are many factors to consider. You can speak with a mortgage professional today to inquire about the cash-out refinance loan terms that you may qualify for and to explore the options in greater detail. If you are thinking about applying for a cash-out home loan, contact a lending representative today.