7 Ways to Save Money When You Refinance Your Mortgage

If you have to refinance your home loan, you might as well save money! These money tips will help you with refinancing your mortgage and achieving your future financial goals. Here’s what financial expert Ethan Ewing, president of Bills.com, says about refinancing home mortgage loans…

“While it’s painful to face losing your home,” he says, “The earlier you start addressing a potential problem, the more options you will have available to find the solution that is best for your financial future.”

To learn more about mortgage loans and refinancing, read Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Finance. And, here are seven mortgage tips to help you save money…

7 Ways to Save Money When You Refinance Your Mortgage

1. Determine if you qualify for Hope for Homeowners. The Hope for Homeowners program, initiated by the U.S. Department of Housing and Urban Development (HUD), helps certain homeowners refinance their mortgages into a 30 or 40-year mortgage to avoid foreclosure. Homeowners must have originated the existing mortgage before Jan. 1, 2008. The existing payment must exceed 31% of the homeowner’s gross income.

2. Refinance the home mortgage loan. In the past, one option would be to refinance the mortgage for a lower interest rate and/or lower monthly payment. In today’s credit market, refinancing is much more difficult, especially for people who have late payments on their credit file, unstable income or whose houses have declined in value. If you are clear of these issues, contact a trusted mortgage lender or broker to determine your refinancing options. Homeowners refinancing their mortgages need to learn about current rates: check online rate comparison sites and using online calculators to determine the real costs of refinancing.

3. Ask about forbearance or financial hardship. For temporary hardship – for instance, an earner has an unusual, seasonal or otherwise-temporary loss of income – lenders might grant a forbearance agreement to lower or eliminate some mortgage payments. This tip requires humility, but it may be worth it to achieve your long-term financial goals!

4. Consider loan modification. A loan modification seeks a permanent change to your mortgage loan, such as lowering the payment and extending the loan’s term, or incorporating any delinquencies into future payments. This is an increasingly popular option for homeowners grappling with unaffordable mortgage payments, and many lenders will attempt to make an affordable monthly payment plan for some borrowers. For more info, go to Hope Now – it’s an alliance among counselors, mortgage companies, investors and other mortgage market participants formed to help homeowners.

5. Sell your home. Selling your home may not be ideal, but it is a way to avoid foreclosure proceedings on the house and repay the lender. Today, some homes are worth less than the mortgage amount. These cases might require special permission from the lender to sell the home at a loss (known as a “short sale”) for its current value.

6. Obtain a “deed in lieu” of foreclosure. A “deed in lieu” essentially allows the borrower to return the title or deed of the property – giving the home back – to the mortgage holder to avoid foreclosure. The borrower forfeits any equity in the property, but does not have a foreclosure on his or her credit record.

7. Be wary of so-called equity skimmers. Be very cautious about your financial decisions. “If you face foreclosure, you will probably receive solicitations from companies looking to ‘help’ you prevent foreclosure by offering to sell your home for you or by taking ownership of your home,” says Ewing. “In most cases, these solicitations are scams trying to take advantage of people in difficult situations. Instead, work with a trusted lender, broker and/or a realtor.”

If you have any thoughts or questions on refinancing your home mortgage loan, plealse comment below…

Bills.com offers education about complex personal finance issues, credit cards, debt relief assistance, insurance, mortgages, and and other loans.


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