Home Affordable Modification Program (HAMP): HAMP lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable. The typical HAMP modification results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.
A commission-based mortgage lender will primarily be motivated by closing your mortgage, whether or not the terms of the mortgage are in your best interest. With salary-based mortgage consultants, you won’t have to worry that your mortgage lender is locking you into a huge financial commitment in order to make their own mortgage payment for the month. Interest rates change daily and vary based on your financial situation. So, you want to be sure your loan officer or consultant takes the time to get you to know your current finances, as well as your outlook and goals.
Home equity loans are also referred to as second mortgages because you use your equity as collateral. If you obtain a home equity term loan, you will receive a lump sum and will have to make a monthly payment. You can also apply for a home equity line of credit, which provides you with access to a revolving account. That allows you to withdraw and repay money over the course of a specific period of time.
The prices for mortgage-backed bonds, and by extension, the mortgage rate a lender offers, are constantly responding to economic factors. In a strong economy, the rise in inflation (i.e., the general price level of goods and services) speeds up as greater demand increases competition for financing, goods, services and labor. This drives mortgage rates higher. A slow-down or recession causes mortgage rates to fall. The U.S. stock market is considered a leading indicator of economic activity. If it tanks, demand for investment shrinks and mortgage rates drop. Conversely, rates rise when the stock market is strong. When there is high unemployment, the economy is relatively weak and mortgage rates tend to fall. If jobs are easy to find, the economy is strong, and rates rise. Like the stock market, rising foreign markets indicate a strengthening world economy and higher rates. When foreign markets tumble, it puts downward pressure on interest rates.
Everyone should make sure their credit score is as high as it possibly can be. If you high credit card balances, pay them below 15% of the credit limit. Dispute negative account information with the credit bureaus. Contact your creditors and negotiate a pay for delete. If you have a friend or family member with a credit card in good standing have them add you as an authorized user.
If you have lost your job, had a reduction in work hours or income, or are unemployed, then you may qualify for assistance. Homeowners can receive mortgage help from the federal government Home Affordable Unemployment Program. This program can reduce someone’s monthly mortgage payments for up to 6 months, which will provide an individual time to find a new job. Read more on the unemployment mortgage program.
The last thing any homeowner wants is to face the stress of being behind on their mortgage payment, or worse yet, to think about, and possibly lose the family home to foreclosure or unpaid property taxes. No one ever plans to or expects to lose their home to foreclosure. But by understanding how you can obtain assistance with making your mortgage payments, who and how to ask for help, and what to do, you can reduce your chances of this occurring. Communication and being pro-active is one of they keys. You should also know the foreclosure process inside and out, and understand what may lead up to it. That will place you in a better position to address and also recognize any potential problems that may impact your ability to pay every bill and make every mortgage payment on time.
Typically forbearance agreements have a deadline, after which the holder is expected to begin paying the monthly mortgage again, in full. In this regard, they are a sort of band-aid fix - great for emergencies, but no good if you expect that the emergency situation is going to become permanent. Once the forbearance period has expired, you have three courses of action:
According to John Lyons, a broker and real estate agent in Chicago, getting a typical mortgage takes an average of 30 to 60 days. So if you’re itching to buy right away, you’ll want to start the pre-approval process soon so you’re ready to go when you find the right house. Lyons recommends getting pre-approved by a reputable company and having all of your financial documentation ready in order to increase your chances of securing a mortgage in a timely fashion.
Many homeowners pay their mortgages on time, but are not able to refinance to take advantage of today’s lower mortgage rates, mainly due to a significant decrease in the value of their home. A Home Affordable Refinance will help borrowers refinance their first mortgage even if the balance owed is more than 100% of the home value. For example, let’s say the amount you owe on your first mortgage is $500,000. You may be able to refinance even if the home value is now only $400,000.
Mortgage loan repayment works through a process called amortization. When you take out a mortgage loan, you agree to pay back the principal amount (actual loan money) in addition to interest over a specified period of time. Because the interest can add up to more than the principal amount, an amortization schedule (provided by your lender) balances out the interest and principal cost over the course of the loan repayment. A borrower pays off more interest to start, and the ratio gradually reverses to where the borrower pays off more of the principal as the loan nears its end. This way, the payment amount is able to remain stable over the course of the loan. If you're considering refinancing your mortgage, an amortization schedule is an essential tool in learning how much money you can save.
Once you research the types of financing available, determine which is best for your financial situation when buying a home: 15-year mortgage or 30, adjustable or fixed. If you are looking for security and a guarantee that payments won’t increase, a fixed rate mortgage might be the way to go. If you believe mortgage rates could still fluctuate and you want more flexibility, consider an adjustable rate mortgage.
Unlike traditional mortgage loans, this does not have a set monthly payment with a term attached to it. It is more like a credit card than a traditional mortgage because it is revolving debt where you will need to make a minimum monthly payment. You can also pay down the loan and then draw out the money again to pay bills or to work on another project. Your home is at risk if you default on the loan. Many people prefer this loan because of the flexibility. You only have to take out as much as you need, which can save you money in interest.
A lender offers you a mortgage interest rate based upon a number of factors, but by far the most important is the secondary market for mortgages. Banks typically sell their mortgages to aggregators like Fannie Mae and Freddie Mac, which are government-sponsored enterprises that buy and repackage mortgages. Aggregators issue mortgage-backed bonds to investors in the secondary market. The daily fluctuations of supply and demand affect the interest rates investors require to buy these bonds. As the economy strengthens, investors require a higher interest rate on bonds because of growing competition for their investment dollars. Banks peg their mortgage interest rates to the daily interest rate on mortgage-backed bonds in the secondary market.
Since there are so many different types of mortgage loans, it can be difficult to choose the best loan for your needs. If you want a set monthly payment and a definite period of time to pay off the loan, you should look primarily at home mortgage loans. This is a good option if you want to remodel, and you know exactly how much it is going to cost. A home equity loan gives you added flexibility since it is a revolving line of credit. This is a good option if you have several smaller projects you are working on and you are unsure of how much each will cost. It also gives you the opportunity to withdraw the money to cover other expenses like a wedding for your child or to help cover college expenses. Either option does put your home at risk if you default on your payments, even if you are current on your first mortgage. It is important to carefully consider your budget to make sure that you can afford the payments. Once you do this you can be confident in moving forward on either type of loan.
The first thing lenders will probably do when you apply for a mortgage loan is to check your credit; you should, too. There’s no better time for regular credit monitoring than when you’re trying to prove your creditworthiness to a lender so you can get the best possible rates. You want to make sure that your credit report is as accurate as possible, your scores are where you want them to be, and no one else is getting access to your credit, possibly harming your scores.
A 30-year fixed-rate mortgage is also called a conventional rate mortgage. The rate that you see when mortgage rates are advertised is typically a 30-year fixed rate. The loan lasts for 30 years and the interest rate is the same—or fixed—for the life of the loan.  The longer timeframe also results in a lower monthly payment compared to mortgages with 10- or 15-year terms.
Due to limited availability of funds, the New York State Mortgage Assistance Program (NYS-MAP) will no longer be accepting loan applications after February 15, 2019. In addition, we cannot guarantee that we will be able to fund loans for clients who have received conditional approval letters. Please keep this in mind as you work on your application with your housing counseling or legal services provider.
Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.
Eric Bank is a senior business and real estate writer, freelancing since 2002. He has written thousands of articles about business, insurance, real estate, investing and taxes, Eric writes articles, blogs and SEO-friendly website content for dozens of clients worldwide, including get.com and valuepenguin.com. Eric holds two Master's Degrees -- in Business Administration and in Finance. His website is ericbank.com.
Mortgage principal reductions are becoming more common. The latest data shows that banks and lenders are forgiven, deferring or reducing the principal balance on about 15% of home mortgages, and they are writing off billions of dollars in principal. Studies show that reducing the balance on a mortgage may be the most effective solution to a housing crisis. Locate a list of mortgage loan principal reduction programs from banks.
The internet is filled with “discount” mortgage financing options with great rates, but often they are not able to quickly close your mortgage or offer you the level of service you need. On the other end of the spectrum you have the large, national mortgage companies that purport to offer both great service and value but in reality are not able to give you a competitive rate, and the service is not on the level you might receive from a local company.
Home equity lines of credit work differently than home equity loans. Rather than offering a fixed sum of money upfront that immediately acrues interest, lines of credit act more like a credit card which you can draw on as needed & pay back over time. This means that the bank will approve to borrow up to a certain amount of your home, but your equity in the home stands as collateral for the loan. The interest rates are lower than they would be with a credit card. Often home equity loans have a variable interest rate that will change according to market conditions.
If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.
When the house, apartment, or the dwelling unit determined eligible for aid, weatherization services are provided to the household. Weatherization services provided may include installing wall, attic, floor, duct, or pipe insulation; cleaning air conditioners; installing low-flow shower heads; installing energy efficient, compact fluorescent light bulbs, improving clothes dryer operation; and replacing or repairing old refrigerator.
For the majority of homebuyers, a fixed-rate loan is the best choice, especially in a low-interest environment like we're in now. However, if you don't plan on being in the home you buy for more than a few years, an adjustable-rate mortgage could save you thousands of dollars in interest. For example, if you're buying a home to live in during four years of graduate school, an adjustable-rate mortgage with a five-year initial rate period could be a smart idea.
Mortgage principal reductions are becoming more common. The latest data shows that banks and lenders are forgiven, deferring or reducing the principal balance on about 15% of home mortgages, and they are writing off billions of dollars in principal. Studies show that reducing the balance on a mortgage may be the most effective solution to a housing crisis. Locate a list of mortgage loan principal reduction programs from banks.
The amount you put down also affects your monthly mortgage payment and interest rate. If you want the smallest mortgage payment possible, opt for a 30-year fixed mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan. Use our calculator to determine whether a 15-year or 30-year fixed mortgage is a better fit for you. Or you may prefer an adjustable-rate mortgage, which is riskier but guarantees a low interest rate for the first few years of your mortgage.
It is important to find a mortgage lender who offers a wide variety of mortgage programs. If your lender only offers a limited range of programs, they may lock you into a suboptimal mortgage when there would be better options available for your situation elsewhere. Check to see if your lender offers programs like FHA loans or VA mortgages before moving forward with their services.
Example – A $200,000 five-to-one-year adjustable-rate mortgage for 30 years (360 monthly payments) starts with an annual interest rate of 4% for five years, and then the rate is allowed to change by .25% every year. This ARM has an interest cap of 12%. Payment amount for months one through 60 is $955 each. Payment for 61 through 72 is $980. Payment for 73 through 84 is $1,005. (Taxes, insurance and escrow are additional and not included in these figures.) You can calculate your costs online for an ARM.
Looking back at the flood of foreclosures since the housing crash, it’s clear that many borrowers didn't fully understand the terms of the mortgages they signed. According to one study, 35 percent of ARM borrowers did not know if there was a cap on how much their interest rate could rise [source: Pence]. This is why it’s essential to understand the terms of your mortgage, particularly the pitfalls of “nontraditional” loans.
Where to get the best deal. If you qualify for an FHA, VA or USDA loan, you may be able to get a better deal on interest rates and other costs using their programs. Familiarize yourself with their criteria. Whether you choose a government-backed or conventional loan, keep in mind that fees and interest rates can vary widely by lender, even for the same type of loan, so shop around for the best deal. You can start your search by comparing rates with LendingTree.
Know your credit score. As soon as you decide to start looking for a home, check your credit report and credit score with any of the 3 major credit reporting agencies: Experian, TransUnion and Equifax. If you find any mistakes that need to be corrected, addressing these issues early will put you in a better position when it’s time to buy a house. (Bank of America credit card clients can get a free FICO® score in Online and Mobile Banking.)
Lenders use the information you provide at the time of application for loan approval or denial. If you get approved, don’t change your employment or income status until after the loan process is complete. Changing your employment or income during the process will significantly delay the lending process at best, and at worst, it could cause you to be denied for your loan altogether.

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Jumbo loan. Jumbo loans may also be referred to as nonconforming loans. Simply put, jumbo loans exceed the loan limits established by Fannie Mae and Freddie Mac. Due to their size, jumbo loans represent a higher risk for the lender, so borrowers must typically have strong credit scores and make larger down payments. Interest rates may be higher as well.

Catholic Charities assist people in need regardless of religion, race and background. The agencies offer emergency financial assistance for people who suffer a crisis, such as a job loss, unexpected medical expenses, car repairs or a death in the family. Although an unpaid mortgage qualifies under the Emergency Assistance Program, some locations have specific programs designed to provide mortgage help. The Housing Counseling Program helps homeowners find a permanent solution to avoid foreclosure.
Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.

Fixed-rate mortgages offer stability in your mortgage payments. However, many ARMs start with a lower interest rate than fixed mortgages and lock the rate in for a few years. That can mean significantly lower payments in the early years of your loan, so some borrowers opt for an ARM with the intention of selling or refinancing their home before the rate can adjust.


Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.
Homeowners can lower their monthly mortgage payments and get into more stable loans at today's low rates. And for those homeowners for whom homeownership is no longer affordable or desirable, the program can provide a way out which avoids foreclosure. Additionally, in an effort to be responsive to the needs of today's homeowners, there are also options for unemployed homeowners and homeowners who owe more than their homes are worth. Please read the following program summaries to determine which program options may be best suited for your particular circumstances.
It’s a loan with your house and land used as collateral. If you don’t pay back the loan, the lender will foreclose. That doesn’t mean the bank owns the house until you pay it off. It means they’ve got a lien against the property. A lien is the right to take possession of someone else’s property, in this case your home, until a debt is paid off. So you really are a homeowner even if you have a mortgage. You just own a home with a lien. Zillow’s Mortgage Learning Center offers extensive information about mortgages and is a great resource for anyone in the market for a home loan.
Union Plus Mortgage Assistance provides interest-free loans and grants to help make mortgage payments when you're disabled, unemployed, furloughed, locked out or on strike.  If you qualify for the Mortgage Assistance loan benefit, you’ll also receive a one-time grant of $1,000 paid directly to you (Note: if you are applying due to a furlough the one-time grant is $300). The program has provided over $11.2 million in assistance to union members.
Learn about a federal government program, Hope for Homeowners, that is offered through the Federal Housing Authority (FHA). It will help hundreds of thousands of lower income homeowners pay or refinance their mortgages (including subprime). Some forms of help may even be available if the value of your home has significantly declined and if your loan is “underwater”. Continue with Hope for Homeowners.
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