In an effort to stabilize home values and to get our financial system moving forward on the way to positive growth the administration has pumped trillions of us dollars into the financial system through diverse packages. Some of these methods were designed to spur job creation as well as get credit flowing to the consumer and to keep borrowing costs low for an extensive period of time.
California homeowners who are still feeling the economic strain from the downturn are having difficulty paying their mortgage, in most cases, and are looking for help. The trouble with many homeowners is their credit has taken a hit, their mortgage is under water, they are delinquent on their mortgage, or they basically don’t have the equity in their residence to refinance, so a home loan mortgage modification is their only option.
Getting a lower monthly payment, for many homeowners, would go a long way in getting them back on a more secure financial foundation. Homeowners can benefit from a home loan modification since the monthly mortgage cost for anybody in the home loan modification program is going to be dependent upon their monthly income.
Usually, in the home loan mortgage modification program, a homeowner is going to lower their month to month mortgage expense to around 30% of their month to month income. This would help many home owners on the verge of defaulting or foreclosure, but there is a long procedure to undertake before receiving a home loan modification.
They will have to fill out paperwork and go through a provisional modification, which is supposed to last about three months however a few have been extended, and there are testimonies of troubles in the modification process when dealing with lenders.
Despite the fact that difficulty and frustrations can occur, if you are in need of a home loan modification, talk to you lender and start the process if you can and if it’s right for you. Even if you hit speed bumps along the way, don’t get bogged down in the process and remember that a modification may be the thing to save your home and get you back on your feet.
One such program that has been keeping mortgage interest rates artificially low for some time now is the FED’s mortgage back security (MBS) purchase program. The FED has committed to investing in $1.25 Trillion in mortgage back securities through March 31, 2010. The Federal Open Market Committee (FOMC) has continued to reiterate their intent to terminate this program at the end of March which is projected to have a negative result on the direction of mortgage interest rates in the near future. We anticipate mortgage interest rates to rise as much as 0.5% to 0.75% by the summer of 2010. Many real estate and mortgage professionals are saying at this time is the time to purchase or refinance that home. With home values down as much as 50% in some areas, and with mortgage rates as historic lows, and homebuyer tax credits available for both first time and move up buyers, now is a great time to think about buying that home.
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