Non-Prime Loan Tips: Understanding Home Mortgage Refinance Options

Many people believe having bad credit means that buying a home is out of the question. However, there are purchase loans available for mortgage refinancing with less than perfect credit. Read on for a basic lesson in subprime lending.

The credit score consumers see on their credit report can range from approximately 300 to approximately 900. (A credit score can also be referred to as a FICO score). Most people fall somewhere between the 600 and 700 range. According to Bankrate, those with a 620 credit score or lower tend to have a history of late or missed payments on their existing debt and most likely will not qualify for a conventional mortgage. These consumers are considered subprime, and the mortgages that are granted to them are called subprime mortgages.

The interest rates for non-prime mortgages are higher than for traditional, or prime, mortgages, but how much higher can vary a great deal from lender to lender. The rate quoted to a consumer also depends on factors such as credit score and down payment size. Non-prime loans may also carry a significant prepayment penalties mortgage refinancing balloon payments. A prepayment penalty is charged to the borrower if they decide to sell the home or refinance before the term of the loan is complete. A balloon payment means that the borrower has to pay off the loan in full after a certain period of time. If they are unable to do so, they must refinance the loan or sell the home.

What if a consumer already owns a home, but is faced with bad credit? In order to help clean up their FICO score, some homeowners may want to cash out on their home equity. Sometimes called bad credit mortgages, these loans are designed to take the equity in ones home and use it to pay off credit card and other types of debt. These loans typically have relatively low mortgage interest rates and the interest is usually tax deductible.

There are definitely options for those with less than stellar credit who are looking to purchase a home or use existing equity to get out of financial trouble. However, because of the variables that exist within the structure of subprime mortgages, borrowers should always compare rates among mortgage brokers and know their credit score before shopping for a mortgage.

Jennifer is an author who has produced many helpful home loan related articles: Bad Credit Home Loans to 100% & Bad Credit Second Mortgages. To learn more about debt consolidation refinancing check out Fixed Rate Refinance Loans

Balloon Mortgage Basics

Balloon mortgages have a bad reputation these days; however, when used properly they can be an excellent short-term fix to a financial need. Here is how you can use a balloon mortgage to your advantage.

Balloon loans are a short-term mortgage that provides very low monthly payments and low interest rates for a specified period of time. At the end of the specified period of time the balance of the loan is due in full. This means you will have to refinance or pay off the entire loan balance. Most mortgages of this type come with terms ranging from five to seven years. These loans are repaid using an amortization schedule based on 30 years of repayment; while this results in a much lower payment, you will be required to pay more when the balloon payment comes due.

Balloon mortgages are ideal for real estate investors or those trying to sell a property when they have already purchased their new one. There is risk involved with this type of mortgage; if you are unable to sell or refinance the mortgage when the balloon payment is due you could lose your home.

Conversion/Reset Options

If you are considering a balloon mortgage there are ways to minimize your risk. Conversion and reset options allow you to change the terms of your mortgage when the balloon payment is due. Using this option could result in higher interest rates and finance charges.

Balloon mortgages are ideal for homeowners that:

Plan on selling their properties when the balloon payment is due and need low monthly payments.

Expect a large increase in their income and will be able to pay off the balloon payment when it becomes due.

Avoid Using a Balloon Mortgage:

refinancing mortgage you are planning on staying in your home and will not be able to refinance or pay off the balloon payment when it becomes due.

If you do now want the risk associated with rising interest rates that could raise your monthly payment significantly when you are forced to refinance the loan.

To learn more about your mortgage options, including how to avoid common mistakes, register for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free guidebook today at: http://www.refiadvisor.com

Balloon Mortgage Refinance

Home Loan Modification Vs FHA Refinancing Programs

Are you among the millions of U.S. homeowners hit the hardest by the current financial crisis in America? Are you concerned that you can't make your monthly mortgage payments anymore? If you're nodding your head, you need to hurry to a financial counselor today and ask about home loan modification vs. FHA refinance.

Loan modification and FHA refinance are helping hundreds of thousands of homeowners prevent foreclosure when they can't pay their mortgages. Which one is best for you depends mostly on who backs your loan. To learn about your loan insurer, call your lender and ask. Most loans are insured by the FHA, Freddie Mac, or Fannie Mae. None of these three organizations are actual lenders, but they mortgage refinancing the loans and guarantee the full amount of the loan. Doing this lessens the risk for lenders and helps borrowers get lower interest rates.

How can you tell apart an FHA loan and a Fannie or Freddie loan? From the outside, you really can't. There isn't much difference between the loans, aside from who happens to insure them. A lot of homeowners don't even refinancing mortgage who insures their loan, and that's because they rarely need to know that information. When they do need it is when they want to modify their loan to decrease their monthly payments. If your loan is a Fannie or Freddie loan, then you could be eligible for President Obama's Making Home Affordable mortgage loan modification plan. If you have got an FHA loan, then you should look into the HOPE for Homeowners plan, which is a special FHA plan to refinance mortgages through equity sharing.

Refinancing with HOPE for Homeowners with FHA loans opens up the possibility of refinancing to thousands of individuals who didn't used to qualify under old refinancing laws. Decreasing house prices have caused a drop in the home equity that people hold, and that drop has made some unable to refinance traditionally. If they have lost enough equity that they no longer have 20% equity, they used to be unable to finance.

The Making Home Affordable plan, in contrast, is not a refinancing program. Instead, it is a loan modification program, which requires participating lenders to follow a standard procedure to lower homeowner's monthly payments to affordable levels. The plan includes $75 billion of incentives paid out to both lenders and borrowers for successfully modified loans. Modifying loans prevents foreclosure and stabilizes the economy as a whole.

Discover additional benefits of loan modifications vs refinancing, by visiting the #1 loan modification resource on the net: http://Home-Loan-Modifications.info

Countrywide Principal Reduction - How to Approach Countrywide to Reduce Principal on a Mortgage

Many people in United States are facing foreclosure because of their financial hardship. To help all its customers save their home from being foreclosed countrywide has come up with loan modification programs. This loan modification refinancing mortgage is specially designed to reduce mortgage refinancing principal amount of the loan. All the applicants would be eligible for principal reduction from the lender as there are some guidelines and lending criteria.

Principal reduction is offered on certain loans only and not every loan would be eligible for the same. The help is offered to the people in 11 states which are in the countrywide lawsuit. These states are Arizona, Texas, Ohio, California, Florida, Michigan, Washington, Illinois, north Carolina, Michigan and Connecticut.

The people who would be eligible for countrywide principal reduction must fulfill the following requirements:

1. He/she must be a citizen of one of the following states.

2. The loan must be originated between Jan 1, 2004 and Dec 31, 2007.

Here is how you can approach countrywide to reduce principal on mortgage:

Read the guidelines before you plan to apply for principal reduction on your loan and see if you are eligible.

Now order for an application form online and fill up the form thoroughly. Every field should be filled in correctly and nothing should be left blank.

Submit all the documents that countrywide would need to get your loan modified. Do not delay the process by submitting an incomplete file. Every document must be presented on time and in correct order.

Be ready for every type of verification and make sure, every information given by you is genuine. Do not try to fool countrywide to get principal reduction on your loan.

Keep in touch with the banks official and keep yourself updated on the status of your file for principal reduction.

To know more about Countrywide Loan Modification Programs and to check if you qualify

Click Here --> Countrywide Loan Modification Help

President Obama has offered $1000 incentive for home owners that opt for Loan Modification instead of Short Sale Or Foreclosure.

To know more about Latest Loan Modification Programs and to check if you qualify for Government Grants

Click Here --> Federal Grant For Homeowners

FREE Trials are for a limited time only, so get yours today.

In the Market For a Refinance Loan?

There are many places that can help you when you are thinking of refinancing a loan. They are able to guide you along the process and lead you to a loan that mortgage refinancing right for you and that can meet your specific requirements. You must however ensure that the place you choose has you best mortgage refinancing at heart and that they are providing the best advice possible.

You should look for an option that provides you with a personal financial advisor to handle your case. They should be able to provide a person that will look thoroughly at your situation and assess whether you are a good candidate for a refinance loan. This means looking at your complete financial situation and assessing the need for the refinance loan as well as if you will be able to meet the demands of refinancing. Often we are guided that a refinance loan is the solution to all our problems and this is a serious misconception. We have to be aware that in the securing of a refinance loan we are putting our assets at risk again. Most refinance loans are mortgages and if we are too hasty we can stand to lose our homes.

You should work with an advisor that also arms you with information. You should be directed to resources to read concerning refinancing loans. There are many such resources on the internet that are reliable and that can be easily accessed. It is essential that you are given all the tools that you need to make the best possible decisions. The availability of articles and other guides to refinancing a plenty and you should be directed to these by a financial advisor as well. While they could make all the decisions for you they should desire that you completely understand the situation and that you are aware of all eventualities.

There are also many tools on the internet that they can lead you too that will calculate in terms of figures your situation. You should have all your information ready and be able to use this to plug in and calculate for yourself the feasibility of the loan. It is essential that for any refinance loan that you undertake that you crunch the figures to determine whether the loan will help your overall situation and to ensure that you will not be making a decision that you cannot handle.

Using all these resources and having the right financial advisor will aid you in the long run. You will be led to the refinance loan to suit your purposes and you will be sure that you can meet its requirements. The decision to refinance is not one that should be rushed especially of the loan that you are refinancing is a mortgage. Refinancing is one of the best options that can assist you but it can also spell doom if you venture in unaware of the consequences. It is important that you work with someone that can carry you through the process in the smoothest possible manner.

Martin Lukac represents RateTake Refinance Rate marketplace. RateTake matches consumers with multiple lenders offering low rates. Got too much credit debt? Get Debt Help and you'd be surprised what we can do together.