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Real Estate Matters: Loan payments

23.05.12

Q. Is it benefit paying extra on the principal on our loan if my home is underwater? We plan to be in the home for at least five more years or until we can carry easily. Right now, it seems like throwing good money after bad if it will still take years to on equity. Would I be better off investing or saving that money now?

Separately, are there any underground rumblings or things on the prospect for homeowners that are underwater and don't qualify for HARP or HAMP? I, like thousands of others, don't take care of the extremely rigid guidelines because I pay private mortgage insurance. I had heard there might be escape coming. Is that true?

You raise a good question on whether you should pay down the principal on your loan if your credit is underwater. The short answer to that question would depend on what your financial situation is and what it will suitable be in the future.

If your financial situation is strong, and if you had to sell your home for less than you owe on it, would you have the financial means to pay the lender the deficiency from the reduced in price on the market and preserve your high credit score and great credit history? If the explanation is yes, you would pay off the lender in full, then paying down your loan would be a hedge against having to come up with that money in the later all at once.

If the answer is that you don't have the cash to pay off the lender now and probably won't for years to come, and you would need the lender's leniency to go through a short sale, you're probably right in thinking that paying extra toward primary would be throwing good money after bad. If that's the case, you might need the money for home repairs, for coeval living expenses or for savings for your children's education or your retirement. These are all financial decisions only you can hand over.

If the real estate market in your area recovers to a point where you can sell your home and not have a residue owing to the bank, you'll have done very well. Keep in mind that if you have moral qualms about doing a short marketing and asking the lender release from any balance you might still owe on the loan, you can sign a promissory note and go together to repay any deficiency to the bank on an installment basis after the sale of the home.

On your second cast doubt upon, recently the federal government announced a new plan to allow homeowners to refinance their home loans under what is being called HARP 2.0, the new and improved variant of the Home Assistance Refinance Program. The old program helped only a fraction of those homeowners that needed backing. The new program started Dec. 1, and we will wait and see what this new plan actually does.

Our hopes aren't too high. The new sketch is supposed to encourage mortgage servicers and the mortgage loan investors to refinance borrowers under unerring circumstances. The main purpose of this new plan is to allow people who would otherwise qualify to refinance but can't because their home is value less than the loan amount (called negative equity).

Another item of interest has to do with liability. The bank that gave out the archetypal loan to a homeowner may be on the hook for any misrepresentations or other bad practices that may come up with that loan; the new HARP blueprint attempts to minimize or change the responsibility held by the original lender.

However, the rules can get specialized, and some lenders may decide that it is not in their best interest to refinance the loan. The government plans don't require lenders to refinance loans; their participation is totally voluntary. But the government hopes that by reshaping the incentives and changing the penalties, lenders will refinance more loans.

Source: NorthJersey.com

GUEST OPINION: Refinance? Health care? Good luck

23.05.12

Wouldn't I be an notional candidate? Though I am far from wealthy (more likely eking out a frugal living), I can prove a even stream of income, I pay off my credit card bills every month, have a sizable amount of high-mindedness in my home and am far from “under water.”

A 1.5 percent reduction in my mortgage interest would mean a lot to my bottom in control ready for, especially if I can refinance under a 15-year term because the monthly amount will be the same as what I pay now on a 30-year accommodation. But to the bank, it is far more important to milk me for everything it can get over the next 30 years, and how sweet it is because I have never defaulted on any payment in my have faith history.

Meanwhile, a former colleague of mine has been living in her foreclosed house for a year paying nothing because her bank is so overburdened with foreclosures it prefers to have her living there for uncontrolled. She says, she has “never had so much money.”

It's not the bank or the CEO who's paying for her rent-free life story. I am and you are, and frankly, I feel cheated.

We need more or better regulation in this country, not less. To all the voters, pundits and politicians who dream we have decidedly too much regulation already, I challenge you to show me what good it has done for consumers.

You, me and your neighbors across the country. The 99 percent. I paucity an agency to rein in these for-profit corporations because their profits and bonuses are paid by the likes of me, people who pay their bills on spell and cut back all the time just to keep their houses, to maintain the semblance of a lower middle-elegance life.

It is an illusion. We‘ve been had.

For the record, I'm a hard-working independent contractor. No one else pays for my trim insurance. I do. I will have no retirement beyond Social Security (should that still exist then) unless I save for it. If I take a vacation, it's on my values bright and early and money. Call me a small-time business owner who is solidly behind the Occupy action. It is high time the 99 percent, the real taxpayers, stood up to indicate truth to power.

Birgit Nielsen lives in Guerneville.

<p>In the past few months, my applications to refinance my home and to transmute my health insurance plan have been denied. I'm left to believe this is because I pay my bills, have essentially no debt, an excellent credit score and am free of any chronic disease. </p><p>Wouldn't I be an standard of perfection candidate? Though I am far from wealthy (more likely eking out a frugal living), I can prove a sensible stream of income, I pay off my credit card bills every month, have a sizable amount of neutrality in my home and am far from “under water.” </p><p>A 1.5 percent reduction in my mortgage interest would poor a lot to my bottom line, especially if I can refinance under a 15-year term because the monthly amount will be the same as what I pay now on a 30-year lend. But to the bank, it is far more important to milk me for everything it can get over the next 30 years, and how sweet it is because I have never defaulted on any payment in my believe history.</p><p>Meanwhile, a former colleague of mine has been living in her foreclosed house for a year paying nothing because her bank is so overburdened with foreclosures it prefers to have her living there for uncontrolled. She says, she has “never had so much money.” </p><p>It's not the bank or the CEO who's paying for her rent-set at liberty life. I am and you are, and frankly, I feel cheated.</p><p>We need more or better regulation in this native land, not less. To all the voters, pundits and politicians who think we have decidedly too much regulation already, I challenge you to show me what tolerable it has done for consumers.</p><p>You, me and your neighbors across the country. The 99 percent. I want an agency to command in these for-profit corporations because their profits and bonuses are paid by the likes of me, people who pay their bills on continually and cut back all the time just to keep their houses, to maintain the semblance of a lower middle-elegance life. </p><p>It is an illusion. We‘ve been had.</p><p>For the record, I'm a hard-working independent contractor. No one else pays for my salubriousness insurance. I do. I will have no retirement beyond Social Security (should that still exist then) unless I save for it. If I take a vacation, it's on my together and money. Call me a small-time business owner who is solidly behind the Occupy manoeuvre. It is high time the 99 percent, the real taxpayers, stood up to talk truth to power.</p><p><i>Birgit Nielsen lives in Guerneville.</i></p>

Source: Santa Rosa Press Democrat