Let’s face it, mortgages are a daunting subject. For many they are a proverbial “ball and chain”, destined to be repaid for the next few millennia, with no discernable end to the misery of seeing your monthly pay packet decimated by that merciless Direct Debit payment.

But, joy of joys, when you reach your 105th year, you repay it and; (like the salmon leaping out of the swollen river after the epic slog against the current) that blissful moment of realisation arrives: you own your own house!

At that moment you are aware of your wealth. You have money, money to be spent on… frivolous trinkets, a motorbike, rhinoplasty: whatever takes your fancy: you are free!

So, here are some tips to help shrink that balance and restore you your freedom:

Do you have savings which aren’t earning you a lot (quite possible at the moment!)? Why not consider an Offset mortgage? An Offset mortgage is where you can use your savings to reduce (offset) how much mortgage interest you pay. The great thing is that your savings remain separate to your mortgage, so your money is available to you if you need it.

For example: your mortgage balance is £100,000 (boo!), but you have £10,000 in savings (yay!). You don’t want to pay £10,000 off your mortgage as you’d like to have that money just in case. However, you don’t like earning 0.00000000001% interest from your bank so you take out an Offset mortgage. The mortgage interest rate is 4%, which could be as much as £4,000 interest a year. But with your £10,000 offset against this, you would only pay interest on £90,000, which would be £3,600- a saving of £400 a year. If you then overpaid as well, you would shrink your mortgage balance at an even faster rate (see below for tips on overpaying)!

If you kept your money in a savings account, you would need to earn at least 5% to earn the equivalent of £400 in interest (as the taxman has to have his cut. If you are a Higher Rate Taxpayer you would need to earn at least 6.7% interest!). Bear in mind that an Offset mortgage is only worth it if you can’t get a better Net savings rate elsewhere. If you can get a better savings rate than the rate that is charged on your mortgage, you wouldn’t save as much money as you could earn by having a normal savings account.

Thou shalt overpay, part I. This really should be the commandment for anyone with a mortgage, who can afford to commit a bit extra each month to their payment. By overpaying a little each month, you can shrink your mortgage balance that much quicker (and save ££££s in interest).

Here’s a top tip: if you are coming to the end of your fixed or tracker rate deal, chances are you will be moving onto your lender’s Standard Variable Rate which, in the current climate, may well be lower than the rate you are currently paying. So when you reach the end of your introductory rate, maintain your payment at what you are currently paying each month, you won’t notice any difference; but boy your mortgage balance will! A word of warning though, sometimes your lender will charge you an Early Repayment Charge if overpayments exceed a certain level. Always check that a) you can overpay, and b) the amount which you can overpay up to.

Thou shalt overpay, part II. Similar to making a regular monthly overpayment, your lender will often allow you to make a lump sum overpayment (the same warning as above applies- this will usually be to an agreed level: so always check!). If you come into money: maybe a bonus, an inheritance, lottery-win or compensation for an accident that wasn’t your fault; you might want to consider paying this into your mortgage. Think carefully about this though, as if you need access to your money, you may not necessarily be able to “borrow back” your cash later on (if your lender allows you to borrow back at all, this will usually be subject to their discretion, – check first before committing your money if you think this maybe a problem for you). Alternatively, you could always place this money into a Savings Account or why not look at an Offset Mortgage?

All too often the rate you are getting may not be the one that will allow you to pay off your mortgage the quickest. If you think you are getting a bum deal try shopping around, but be mindful of fees and costs you will need to pay; they may outweigh the benefits of moving at all! Use a mortgage search and Best Buy tablesto see what you could be paying and consider employing the services of a whole-of-market mortgage broker who will be able to assess your situation and advise you where a cost saving can be made.

Moneyfacts.co.uk is the leading independent financial information provider in the UK. Since 1988, we’ve been providing impartial information to financial services professionals which has helped thousands of customers get the best deal on their mortgages, savings accounts, credit cards, loans and other personal finance products.www.moneyfacts.co.uk Limited is authorised and regulated by the Financial Services Authority (FSA).
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Mortgage refinancing is easier than ever thanks to President Obamas housing stimulus plan. Millions of homeowners are struggling and facing the reality that unless they get into a better mortgage or financial situation, there home will be lost to foreclosure or default. Here is how homeowners can get themselves a new, affordable and money saving mortgage from President Obamas stimulus plan.

Homeowners everywhere are hurting due to a bad housing marker and overall economy. That has led to mortgage foreclosure and default rates being at near all time highs. In order to help homeowners, and the overall economy, President Obama needed to take action. This action came in the form of a $75 billion stimulus plan designed to help nearly any homeowner. This money is going to be used to lower mortgage interest rates, and to give to mortgage lenders and banks. The banks and lenders will be able to get some stimulus money every time they help homeowners and follow President Obamas stimulus plan. That means that they have a reason to want to help homeowners.

Because of President Obamas stimulus program homeowners with bad credit, upside down mortgages, or other financial problems can now easily get approved for a refinancing. In the past, mortgage refinancing would be a hard thing to get if struggling financially. Because so many people are hurting, things needed to change before even more homes are lost, that is why Obamas plan was enacted.

Homeowners should take action and get themselves a mortgage refinancing before it gets harder to get approved for. Do not wait any longer and get the help that is available while you can. Contact a mortgage lender or bank today and see what options exist for you.

For more articles on Mortgage Refinance check out my website
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President Obama has announced a stimulus plan that makes mortgage refinancing easier and more beneficial for millions of people. This stimulus program is called the “Making Home Affordable” plan and was designed to help individual homeowners combat a bad housing market and economy. Many people will save a lot of money, their home, or both by using this stimulus plan for themselves. Here is what homeowners need to know and do in order to take advantage of this stimulus plan and get a home mortgage refinancing.

Over $75 billion is being put aside to help homeowners and fund this stimulus plan. This money is being used to both keep interest rates low for everyone, and to provide new options for struggling homeowners that will save them money, their home, or both. Mortgage lenders and banks get a cash incentive every time they help a homeowner and follow the stimulus plan rules in Obamas stimulus. This money makes the lender or bank more likely to approve more homeowners, regardless of their financial situation.

Homeowners who have no or negative equity in their home, who have bad credit, or who are facing other financial hardships can use this stimulus plan and easily get financial relief. In the past, it was much harder, and more expensive, to get a mortgage refinance when facing financial or mortgage problems. Now though, because of the Obama stimulus plan, millions of homeowners will be able to get themselves into a better mortgage, and improve their financial future.

People with a mortgage they can barely afford should take action now and get a mortgage refinance with Obamas stimulus plan. Never before has been getting help with a home loan been this easy. Do not wait any longer and take action now.

For more articles on Mortgage Refinance check out my website
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They are hard to find but the answer is YES. There is a home loan refinance program that can dramatically reduce the amount a homeowner owes on the balance of their home loan(s) – as long as the homeowner meets a few criteria discussed at the end of this article. This is NOT a loan modification that simply offers a temporary reduction in the interest rate and monthly payment. Using a Note Repurchase Program or Loan Balance Reduction Program, homeowners who find themselves owing more than their home is worth can literally shave up to hundreds of thousands of dollars off their existing loan(s) balance which results in a small instant equity position and a large monthly savings from lower mortgage payments. As if this wasn’t enough good news, the homeowners credit score is NOT negatively affected by this program.

Here is how it works. The company that is handling the Loan Balance Reduction, usually a team of lawyers and real estate professionals, will group a portfolio of existing notes of their clients from a particular lender, Bank ABC, and present the bank with an all-cash, take it or leave it, offer to purchase the entire portfolio of notes at a significant discount to current market value. If accepted, and I’ll explain why the banks are often willing to do this, the investor then turns around and underwrites a loan back to the original homeowner at 90% of CURRENT APPRAISED value. The homeowner has now repurchased their home for under present market value, saving a bunch of money from a lower mortgage amount AND monthly payment!

Now why would any bank in their right mind take so much less than what is owed to them? The answer is simple. Liquidity. Banks today need cash to lend (this is their business) and are required to have certain cash reserve levels by The Federal Reserve to stay in business. By removing a non-performing asset from their books it frees up cash that the bank can immediately turn around and use in their business activities. Rather than risk the increasing probability of having to foreclose and own these non-performing assets in a year or two, many banks are willing to take the immediate cash infusion.

Who qualifies for this program? In order to take advantage of this program a homeowner (including investment properties 1-4 units) must have a Loan-to-Value ratio of AT LEAST 125%. Meaning the total amount owed for all loans on the property must exceed the present value of the home by 25% or more. Secondly, the homeowner must have an income source and a debt-to-income ratio of 50% or less (based on the new lower mortgage payment!). The process takes approximately 2-3 months to complete and ALL credit quality qualifies, you can even be in the Notice of Default or Trustee Sale phase and be able to take advantage of this program.

If you meet the criteria listed above and would like more information about a Loan Balance Reduction Program, please visit me online at http://www.PrincipalReduction.us

Charlie Kartchner, Lic Broker, Principal Reduction Specialist http://www.PrincipalReduction.us
 
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