It’s no secret the mortgage market is in a desperate state these days. Interest rates are at an all time low and many homes aren’t worth the mortgage balances secured. Homes are still being lost and millions of credible borrowers are being rejected. There are three common mortgage mistakes currently being made and ways to begin avoiding or correcting them.
You’re upside down so you can’t refinance, right?
- Wrong! Currently there are close to 11 million Americans whom owe more on their home than it’s actually worth which is about 23 percent of all homes in America. Since 2009 when home interest rates dropped to their all time low, over 10 million homeowners have refinanced.
- Unfortunately, most homeowners whom are upside down on their mortgages lose hope and feel they can’t get out of their higher interest rate homes. There are actually several options available for lowering both monthly payments and interest rates for homeowners. Banks are becoming more likely to modify mortgages helping the homeowner to be less likely to default on their loan or worse, end up in foreclosure.
- If no payments have been missed, several banks are now offering refinancing through the Obama administration’s Home Affordable Refinance Program and Federal Housing Administration Short Refinance Program.
- In most cases, if the bank you are walking into is not a highly ranked customer service branch, you will most likely not be happy with the customer service received or the assertiveness offered. You want someone to understand your situation and most importantly be willing to work quickly on reducing your monthly mortgage payments and interest rates.
- The best way to find a broker or banker you will be most satisfied with is to ask for referrals from those who have been through a refinance. You will more than likely find someone who wants to close the deal in a timely fashion because they know clients like you are what their business is dependent on.
Feeling “stuck” for Thirty Years
- Many people have expressed how they feel about having a mortgage for 30 years and how they feel stuck. The truth is, you are in control of your mortgage and the debt incurred by it. You pay your mortgage off at your own speed.
- Some suggestions on how to pay your mortgage off sooner rather than later:
- Pay half of your mortgage every two weeks, this in turn equals an entire extra payment a year which can help to pay your mortgage off close to 5 years sooner
- Pay an extra $100/month and ask that it be applied to the principal on the loan
- Apply raises from your paychecks
- Use money once paid to previous debts such as credit cards