Home Affordable Refinance Program Extended

The FHA has decided to once again extend the Home Affordable Refinance Program (aka HARP.) Perhaps now is the time to look into whether or not this is an option for you.  It is a program created to help the millions of Americans who have had trouble refinancing due to decreased home values. When it is successful, it has similarities to a loan modification, but you actually get new mortgage with new terms (lower interest and lower monthly payments.)

HARP may be an option if:

• You are current on your mortgage payments (no 30 day late payments over the past year)
• Your home is worth less than what you paid for it.
• Your first mortgage is not greater than 125% of your home's current market value.
• Your loan is owned by Fannie Mae or Freddie Mac.

The best way to find out if you qualify for a Home Affordable Refinance Program loan, is to contact a HARP lender. Not every lender is equipped to assist you.  Here is a way to check and see if you quality for a HARP loan through a trusted HARP mortgage lender.  Simply complete this mini-application online.

The Best Bank to Get Your Home Mortgage From

This article is not about how banks, credit unions, or lending institutions stack up. It is about a paradigm shift that is taking place with or without you.

Can you imagine what it would be like to not have to provide all of your information to a bank loan officer only to have them ask you for more paperwork? It has been said that a traditional bank will lend you money if you can prove you don't need it. So, why not put yourself in a position where you really don't need it? Think it's impossible? Think again.

There is a financial strategy that you may or may not have heard of called the Infinite Banking Concept. Through the Infinite Banking Concept, you actually learn how to become your own banker and solve your need for financing - no matter what the need is - and that includes your mortgage.

I strongly advise you to take some time and learn about this financial strategy by visiting the Infinite Banking Concept website. You will be glad you did as you will be on your way to becoming your own banker. I am and I am loving it!

Ways to Save Money on a Mortgage After You Retire

For many seniors it’s essential to save money wherever they can after retiring, especially on a mortgage. Once you’ve decided to retire, you need to be certain that you have enough income and have reduced your expenses enough to live as comfortably as you wish. Now for most families, their mortgage is probably their biggest monthly expense.

When you actually retire, unless you have a side business that generates income, your income will come from your pension (if you have one, and it’s increasingly rare commodity these days), your Social Security check (that is if there’s any money left in the Social Security system when you retire, which is another unknown), and then of course, whatever savings and investments you have, including rental properties.

So, unless you have unlimited savings or a substantial income from your investments, it’s of paramount importance to lower your monthly expenses.

One way you can get your expenses down is by paying off your mortgage before you retire. If you can do that, you have lightened your monthly burden by hundreds, maybe even thousands of dollars every month. Depending upon how large your mortgage is, it may seem like an almost insurmountable task to pay it off early. But, there are a few tricks you can try to get your mortgage paid off before you retire.

For one thing, you can make at least one extra mortgage payment a year to pay down your principal. The lower the principal, the less interest you’ll have to pay on it.

Another way to lower your mortgage payment is to look at the rates you’re currently paying. If you got your mortgage a decade or more ago and you’ve been making your payments steadily ever since, then it’s probably a good idea to check out refinancing your mortgage now since mortgage rates are lower than they have been in a long, long time. Once you’ve gotten your monthly mortgage payment down lower you can look at either making an extra mortgage payment every year or making slightly larger mortgage payments every month to pay it off faster. Every little bit helps.

If you’re nearing retirement and it’s just you and your spouse living in a four bedroom house, think about how much house you really need. Perhaps you should sell your house, pay off your mortgage, and relocate to a smaller place that’s more in tune with your current housing needs, and perhaps still have some money left for a down payment. You may still have a mortgage to pay off, but housing prices have really dropped in the last three years, and mortgage rates are lower than ever. If you can lower your monthly outflow of cash, that’s more money in your pockets for investments, travel, or that big-screen TV you’ve been lusting after.

One thing you shouldn’t do, however, is to dip into your 401K account or IRA to pay off your mortgage early. It would be nice to get rid of your mortgage payment entirely, but you need to keep a balance between owning a home, having investments, and having enough cash on hand for emergencies.

The thing is, everyone’s situation is unique, so tailor your approach to your needs and your current situation. The longer you can put off retirement and dipping into your savings, the more money you’ll have in the future. The way the economy is going now, you should probably work as long as possible and work on paying off that mortgage while you still have a monthly paycheck to count on.

About the Author:

Vern is a student learning about all aspects of finance to pass his New York mortgage test this fall.

What is a Mortgage Principal Reduction?

You may have heard this term recently and not be fully aware of what it is. First, it is not a loan modification. In a loan modification, you have to meet certain criteria and negotiate with the stubborn banks and hopefully in the end get some relief in the form of a lower payment or forgiveness for some of your outstanding mortgage. Second, it is not a short sale. In a short sale, you have to sell your home (with the banks approval), move and and start the process of finding a new home. Who wants to do that?

A mortgage principal reduction is a new form of relief for homeowners who owe more than 25% of their homes current value. In states such as Arizona, California, Florida, and Nevada, this represents a significant population.

This new service is made possible due to the negotiating power that institutional investors have with the banks. It is far more than what you could do or your real estate agent by him or herself for that matter. In the end, you will have a principal reduction that gives you 10% equity in your home, which for some is something they thought they would never see after the market dropped as it did.

Qualifying is even simpler than qualifying for a loan modification or a short sale which is even better news. The basics are that you need to owe at least 25% more than the homes current value, and not have a debt load of greater than 50% with the new lower mortgage payment.

My advice is to be very cautious of paying high fees to have someone help you with a principal reduction. For a while it seemed to be a solution, but one trusted advisor that I spoke with said that the banks are not as excited about doing these as folks had initially thought.

In the end, you might be better off trying to do your own loan modification.

Get a Home Loan and Get Paid for it?

Yes, as odd as it seems, one company has put together an amazing model that allows customers to get paid for referring home mortgage customers - including themselves. This means you can get paid for your own loan! Loan Home, Inc. is the company and all you have to do is register as a free affiliate then submit your loan; it's that simple. The company provides you with a link to share with others as well so you can profit from their loans as well.

The company even serves businesses by allowing employers to offer this amazing service as a company benefit and serves non-profit organizations, allowing the non-profit to generate much needed revenues by sharing a great service with their constituents.

To learn more, visit www.theloanthatpays.com Today!

FTC Disclosure - This post was written by an affiliate of Loan Home, Inc who is compensated for successful referrals.

Do You Really Need a Home Warranty?

If you are buying a new home it should come with a builders warranty so you shouldn't have to purchase a home warranty insurance plan. If you are not buying a brand new home, I would strongly recommend making a home warranty a part of the transaction. Often a real estate agent with convince the seller to offer a home warranty as an incentive, but even if they don't offer one, you can write it into the contract. Sometimes (depending on the size of the transaction) the agent may even offer to purchase one for the purchaser as a settlement gift.

Even if you have to pay out of pocket, the cost is relatively inexpensive with most plans running between $250 and $600 per year. Many people don't realize that you can renew the home warranty after the first year.

But What Does it Cover?
Please know that a home warranty does not cover anything that could go wrong with your home. Typically, a home warrany covers major systems and applicances, but you will want to read the fine print to know exactly what is covered on the plan you are considering. Also, keep in mind that often there are deductibles or service charges in conjunction with claims.

The goal of the home warranty is not to eliminate every possible expense, but to help a new homeowner not have any costly surprise expenses after spending most of their savings on closing costs to get into their home.

For more information or to purchase a home warranty, visit American Home Shield.

Record Foreclosures Lead to Record Bankruptcies in 2008

2008 saw the greatest increase in personal bankruptcy since the bankruptcy laws were reformed in 2005 (33% according to MSN Money). Given the increase in the number of foreclosures, it was to be expected in that a bankruptcy is often a homeowners only option when faced with overwhelming debts, a mortgage shortage, or job loss. A confirmation of the connection of record foreclosures to record bankruptcies is the fact that 3 of the top 4 states for increased bankruptcies are also in the top 4 states affected by foreclosures; California, Florida, and Nevada.

Bankruptcy is not the end of the world. In fact, for many filing bankruptcy can be a relief. It means an end to outstanding debts, no more collection calls, reduced stress, and a chance to start over. I am not encouraging you to go our and file for bankruptcy to get rid of your problems. It is a huge decision and requires serious thought because it is certainly a mark that will stick with you forever even though it will eventually come off of your credit report.

Many ask the question "if they will ever be able to buy a home again?" and the answer is absolutely. It won't be the next day or even the next month or the next few years before a bank will underwrite their loan, but there are several options for those that have filed for bankruptcy to get into a home. A great resource for bankruptcy recovery is The Bankruptcy Mortgage Book, which is an A to Z guide to getting a mortgage after bankruptcy.

If you have not filed for bankruptcy yet, I strongly encourage you to do research some bankruptcy information resources online before you do.

These are challenging times indeed, but I have full confidence that as a nation we will weather this storm as we have in times past. My only hope is that we all learn from this and become better at saving and not living on credit or beyond our means.