Mortgages and home equity loans are two different types of loans you can take out on your home. A first mortgage is the original loan that you take out to purchase your home. You may choose to take out a second mortgage in order to cover a part of buying your home or refinance to cash out some of the equity of your home. It is important to understand the differences between a mortgage and a home equity loan before you decide which loan you should use. In the past both types of loans had the same tax benefit, however the 2018 tax law no longer allows homeowners to deduct interest paid on HELOCs or home equity loans unless the debt is obtained to build or substantially improve the homeowner's dwelling. Interest on up to $100,000 of debt which substantially improves the dwelling is tax deductible. First mortgages and mortgage refinance loans remain tax deductible up to a limit of $750,000.

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.
A deed in lieu of foreclosure is when a homeowner gives the lender back the convey and deeds the home back to the bank or lender that currently holds the mortgage. This has several advantages for both the lender and the borrower, including less of an impact to credit scores, and it releases the homeowner from the debt they owe. Continue with deed in lieu of foreclosure.
When your application is received and your eligibility is confirmed, the NC Housing Finance Agency may place a temporary stay-of-foreclosure for up to 120 days so that the company that owns your mortgage cannot foreclose on your home or take other legal action while your Mortgage Payment Program loan application is under review. If you qualify for the loan, the NC Housing Finance Agency will make your mortgage payment directly to your loan provider or bank. At the end of the assistance period, you will resume making your mortgage payment.
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If you’re interested in refinancing to take advantage of lower mortgage rates, but are afraid you won’t qualify because your home value has decreased, you may want to ask if you qualify for the Home Affordable Refinance Program (HARP) or the HOPE for Homeowners (H4H) program. For more information, visit the U.S. Department of Housing and Urban Development.
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.
After you have applied for a home loan, it is important to respond promptly to any requests for additional information from your lender and to return your paperwork as quickly as possible. Waiting too long to respond could cause a delay in closing your loan, which could create a problem with the home you want to buy. Don’t put yourself in a position where you could end up losing your dream home, as well as any deposit you may have put down.

In some cases, you may not be required to provide all of that information. Some loans are referred to as low doc or no doc because they don't require you to prove any of the statements that you make to your underwriter. These loans are normally more expensive, but can be easier to obtain. Additionally, you can obtain a preauthorization before you submit an offer on a home you would like to buy. That can speed up the process, and also shows the seller that you are serious about the purchase.
Homeowners are encouraged to explore free HUD foreclosure prevention counseling, which could help you qualify for other programs. Homeowners should also contact their servicer to find out if they qualify for a loan modification or other foreclosure prevention options. Some of these may include transition to other foreclosure alternatives, such as deed-in-lieu of foreclosure or short sale.
A deed in lieu of foreclosure is when a homeowner gives the lender back the convey and deeds the home back to the bank or lender that currently holds the mortgage. This has several advantages for both the lender and the borrower, including less of an impact to credit scores, and it releases the homeowner from the debt they owe. Continue with deed in lieu of foreclosure.
The next step is to thoroughly research these grants to ensure that you satisfy the eligibility criteria and complete their applications. The complexity of grant applications makes it worthless to apply for grants for which you are ineligible. Save your time by only completing applications for those grants that you feel you have a chance of receiving. Non-profit housing organizations and your city's housing authority may be able to assist you with your application.
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.
Tax benefits. The tax code currently provides tax benefits for homeownership. You may be eligible for a deduction for the interest paid on your mortgage, private mortgage insurance premiums, points or loan origination fees, and real estate taxes. And when you sell your primary residence, you may be able to exclude all or part of your gain on the sale of your home from taxable income.
Community Action Agencies are private and public nonprofit organizations. The main goal of a CAA is to help people achieve self-sufficiency. Each CAA is governed locally and features different programs. The organizations work directly with state and local government assistance programs and charities. According to the Community Action Partnership, 94 percent of CAAs provide referrals for assistance and 91 percent provide emergency services, including food banks and homeless prevention. Assistance is generally available only to low-income families and individuals.
Homeowners are encouraged to explore free HUD foreclosure prevention counseling, which could help you qualify for other programs. Homeowners should also contact their servicer to find out if they qualify for a loan modification or other foreclosure prevention options. Some of these may include transition to other foreclosure alternatives, such as deed-in-lieu of foreclosure or short sale.
"I don't know what I would have done without the help of Iowa Mortgage Help. After a long and expensive battle with medical bills, I faced foreclosure of a home that has been in my family for over 100 years. I was finally able to get a successful loan modification and a payment I can afford in order to take care of my home. I'd have lost everything if it wasn't for their assistance."
The federal government’s Making Home Affordable program is working with various banks and lenders to ensure that they provide millions of homeowners with loan modifications. In some cases the government may be subsidizing fees and interest rate reductions. Learn about this and other programs, all of which can ensure people get relief from their mispriced mortgage payments. The other option is the Homeowner Affordability and Stability, which is part of Make a Home Affordable.
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.
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.
Investopedia’s Mortgage Calculator is based on a complex formula that factors in your mortgage principal (how much you are borrowing), the interest rate you’re paying and the duration of the loan to determine how much that monthly mortgage payment will be. It lets you try out different scenarios of how much you might borrow and what varying interest rates will do to the amount you’ll be asked to pay. Read below to understand what each of these terms mean.
However, it's perfectly acceptable to work seller-paid closing costs into your offer in order to reduce your out-of-pocket expense. In other words, if you want to offer $195,000 on a home, you can offer $200,000 and ask the seller to pay up to $5,000 in closing costs for you. This can be an excellent strategy for first-time buyers with limited savings to improve their ability to get a mortgage.

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.
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.

John and Anne are a retired couple, aged 72 and 68, who want to stay in their home, but need to boost their monthly income to pay living expenses. They would like to remodel their kitchen. They have heard about reverse mortgage loans, but didn’t know the details. They decide to contact a reverse mortgage loan advisor to discuss their current needs and future goals.
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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