With the stimulus package, banks are actively seeking to help homeowners with their financial situation by offering loan modifications. Banks will actually receive $1,000 from the federal government for each successfully completed loan modification. In this way, both sides, the bank and the homeowner, can benefit in this dire economic time. HSBC is one the banks participating in this program. If you are a homeowner facing foreclosure you may qualify for Obama loan refinance modification. Below are important points to keep in mind when applying:
Interest Rate- You need to look at what the current interest rate on your loan is versus what kind of rate you can get by doing a mortgage refinance. As a rule, you need to be able to get about a one percent reduction in the rate for it to be beneficial because of the fees you will pay in order to Obama loan refinance your mortgage. Some lenders offer streamline loans where you avoid fees in order to refinance. In this case, a rate reduction of any kind is beneficial.
Loan Term- The number of years on your mortgage loan plays as big of factor into how much interest you pay as the interest rate does. If your mortgage loan is almost paid off, you aren't going to save enough from a lower interest rate to earn back what you pay to execute the refinance. The only time it makes sense to extend the term out on your mortgage is if you are looking to reduce the monthly payment for affordability reasons. Any time you lengthen the term out on your loan, you are going to pay more interest than if you get the loan paid off more quickly.
Research the options available to you before you approach your lender. This will allow you to be prepared and allow you to approach your lender with confidence. Under the stimulus plan, your monthly mortgage payment cannot exceed 31% of your gross monthly income.
With interest rates as low as they are today, you might be able to refinance your 30 year mortgage to a 15 year mortgage with little to no change in the monthly payment.
Interest Rate- You need to look at what the current interest rate on your loan is versus what kind of rate you can get by doing a mortgage refinance. As a rule, you need to be able to get about a one percent reduction in the rate for it to be beneficial because of the fees you will pay in order to Obama loan refinance your mortgage. Some lenders offer streamline loans where you avoid fees in order to refinance. In this case, a rate reduction of any kind is beneficial.
Loan Term- The number of years on your mortgage loan plays as big of factor into how much interest you pay as the interest rate does. If your mortgage loan is almost paid off, you aren't going to save enough from a lower interest rate to earn back what you pay to execute the refinance. The only time it makes sense to extend the term out on your mortgage is if you are looking to reduce the monthly payment for affordability reasons. Any time you lengthen the term out on your loan, you are going to pay more interest than if you get the loan paid off more quickly.
Research the options available to you before you approach your lender. This will allow you to be prepared and allow you to approach your lender with confidence. Under the stimulus plan, your monthly mortgage payment cannot exceed 31% of your gross monthly income.
With interest rates as low as they are today, you might be able to refinance your 30 year mortgage to a 15 year mortgage with little to no change in the monthly payment.
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