The real estate market in Virginia has gone through a significant shift in the past 10 years. Homeowners have seen a dramatic increase in their home values. Whether you live in the affluent neighborhoods of northern virginia or the Richmond, most Virginia homeowners have 10%, 20% or 30% equity in their homes.
Virginia Homeowners are refinancing their existing mortgage loans to take advantage of the equity in their homes to finance home improvement projects, consolidate debts, pay for their children’s education, invest in real estate or treat themselves to a much needed vacation.
The amount of money that homeowners can draw or cash out during the refinance process depends on the equity in their home. Some homeowners draw $10,000, while others draw $100,000 or more. This is not surprising as some virginia homeowners have seen their home values jump from $300,000 to $600,000 in the span of 5 years or less.
Points to consider when refinancing your mortgage loan as a cash out refinance or second mortgage home equity loan:
1. As with all big decisions refinancing requires you to do some research. The most important aspect of getting the best loan terms, is to shop around for the lowest refinance loan rate. This kind of shopping should not cost you any money. A reputable lender can offer no cost refinance loan quotse.
2. Once you get your loan quotes, compare mortgage terms such as the interest rates, type of loan (fixed or adjustable), prepayment penalties, points, fees, etc.
3. Ensure that you can still afford your new mortgage loan with some money to spare at the end of the month.
By: Lisa Jones
Posts Tagged ‘Mortgage Terms’
Virginia (VA) Refinance Loans – Home Equity, HELOC or Debt Consolidation Loans
February 14th, 2010Refinance or Loan Modification?
January 9th, 2010
A downturn in the United States economy has increased the demand for mortgage loan modification assistance. With a large amount of homeowners being upside down, the opportunity to refinance into a better mortgage term has become impossible.
For those who are stuck with the adjustable rate mortgage, a high interest rate, etc. the chances of qualifying for a new loan are very slim. First, if you qualified for a stated income lenders no longer allows such type of loan. Therefore, borrowers in this situation will have to stay in their current position no matter how high the interest may become. Second, the lenders requirement for debt to income ratio’s have changed. Some lenders use to let you go up to 65% dti and now good luck with getting 55%(only if you have 80% or below loan to value). Third, lenders now requires borrowers to have reserves. In this economy how many people really have reserves? The likelihood of these people having reserves when the economy was at it’s best is probably slim. Finally, let’s not forget about the distressed area’s which is nationwide. To this day maybe 99.9% lender will not do a 100 percent financing (who can blame them?). Now, with all this in mind, what options are these homeowners left with?
The answer?
Loan modification can be beneficial for homeowners when refinancing is no longer an option. With foreclosure filings increasing up over 80 percent higher than 2007, it has forced lenders to cooperate with assisting homeowners by modifying non performing mortgage loans. Lender are willing to work with homeowners a long as they feel that the loan can perform. Though, in some cases homeowner are denied for the simple reason that no matter what modification the lender has to offer; the borrower just cannot afford the home.
Can a homeowner do their own loan modification?
Yes, homeowners can choose modify their current mortgage terms with their current lender. Though, keep in mind that the lender at times may give you what is more beneficial for them and not the homeowner. Hiring professionals can be very costly but, it has its benefits. Keep in mind that their are many loan modification companies out there and choosing the right one can be difficult. When choosing a company make sure to research who they are and what their reputation is. Loan modification prices vary depending on how much work needs to be done. When working with a company, make sure that you are aware that there is no guarantee that the loan modification can be done. There are loan modification software’s available for these companies such as Casi Mod to determine if there is a possibility that a loan modification can be made. By inputting the current financial situation, it will give them a general idea on the possibilities of attaining a loan modification. Be aware of organizations that collect money before taking all financial (income, expenses, assets, etc.) information and consulting you with a plan that they will try to conquer. Make sure that they take a really good look at the file, consult you and give that you a proposal before paying for their services. Again, this can be costly but highly suggested as long as you are dealing with a superior company.
In conclusion, owning a home is an American dream. Homeowners do not want to lose their homes because no matter what they will have to live elsewhere. Though, with the decrease in home values and income, deterioration of credit, and strict lender guidelines it is almost impossible to refinance and put themselves in a better position. Therefore, doing a loan modification could be the best option for most people.
By: Miko Del Rosario