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  1. #1

    Home Loan Refinancing

    There are two different types of home loans depending on the mode of interest rate. These include fixed-rate mortgage loans and adjustable-rate mortgage loans.

    In case of fixed-rate mortgage loans, interest rates are fixed for the entire period of loan, which means that the borrower is required to pay a similar amount every amount towards mortgage payment.

    In case of adjustable-rate mortgage loans, interest rates are low during the initial 2-3 years, but are adjusted periodically depending on the market index. In most cases, the adjustments cause an increase in monthly mortgage payments. Many borrowers default with their monthly payments primarily because they are unable to adjust to the increase in monthly mortgage payments. Defaulting with loan repayments causes a significant damage to the credit history of an individual. In most cases, these individuals end up as bad credit customers. Borrowers defaulting with their mortgage payments or having bad credit often face the risk of home foreclosure. Home loan refinancing is a useful solution for such borrowers.

    When applying for a home loan, all credentials of the lender must be keenly checked. The local consumer protection agency could be contacted for providing a list of lenders with an honest repute. All fine print must be carefully scrutinized, and one must avoid signing documents without having read them or which have blank spaces in them. Moreover, it is also advisable to keep a copy of all documents for future references.

    Avoid the temptation of applying for a home equity loan wherein your monthly income is inadequate to finance your debt obligations. In such an eventuality, the lender can foreclose on your home because of a default. Hence never let your greed overtake sound common sense when applying for that home equity loan.

    A home equity loan is normally a second mortgage. Hence one must carefully take stock of one's financial conditions and analyze whether one can afford extra debt. This is because once a home equity loan is undertaken, loan repayments must be made a top priority, as it is your home that could be taken away from you in the event of a default.

    Mortgage advisers come in many shapes and sizes. You can find them every where, a local mortgage broker, at your local bank or credit union, on the internet, in the yellow pages, television advertisements the list is only limited by your imagination. Suffice it to say there is no shortage of places to find mortgage advice some good and some bad.

    There is a saying in the mortgage business, if you shop for a mortgage on the phone, you will do business with the best liar, do not let this happen to you. Unfortunately there is no scarcity of mortgage people who will try to get your business lying.

    Make sure you find someone you trust, after all this is one of the single largest investments you will ever make in your life. I tend to advise people to choose an adviser who you can visit and look in the eye.

    1. Your Payment History

    This makes up about 35 percent of the typical score.
    According to Fair Isaac & Co., six out of ten Americans don’t have a single late payment on their credit report.
    When it comes to negatives like late payments, the score focuses on three factors:

    Decency – this is how recently the borrower was in trouble.

    Frequency – this is how frequently the borrower has been in trouble.

    Severity – this is how serious the trouble has been.2. The Amount of Debt

    This makes up about 30 percent of your score. Total amount owed is examined, as well as the different types of debt involved.
    Maxing out your credit limit, or even coming close, will inevitably hurt your score.
    The greater the difference between your credit balance and your limit, the better.

    3. The Amount of Time You’ve Carried Credit
    This is fifteen percent of your score. The longer you’ve had credit, the better.
    According to Fair Isaac, the average American has carried credit for fourteen years.
    Last edited by Soapboxmom; 12-25-2009 at 05:07 AM.

  2. #2
    Join Date
    Jul 2006
    Posts
    7,767

    Re: Home Loan Refinancing

    you are advertising home loan modification in your signature. i have to say that it appears many of those type firms will take alot of money and perform no service. vultures.

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