Refinance Upside Down Mortgage: Is That Really Possible, Despite Unemployment?
Changes are inevitable in the mortgage industry. I can honestly say all the changes that have come down recently have good intentions and hope to keep ethical and moral lenders in business and do away with lenders who have built their business on a bait and switch philosophy or colluded with appraisers to inflate values of homes. Here is a brief overview of some changes that have already come down the pipe and some that are still in the works. All appraisals must be ordered from an Appraisal Management company. The loan originator can no long talk to appraisers and “shop for value”.
This will decrease the over inflation of properties and keep from people being refinance upside down mortgage in their homes. This also prevents people from refinancing into a lower rate if there appraisal comes in short. Also lenders cannot collect appraisal money upfront anymore. Watch out for lender collecting an upfront “application fee” now. That is just a loop hole and it will still commit you to a loan since you now have ‘skin in the game’. Another great change is If your APR Changes by more than.125 percent from what you were originally disclosed to the closing, the lender has to redisclose a new good faith estimate and a new truth in lending statement and wait 3 days before closing after you have received the disclosure.
This is one of the most frequently asked question about the home loan refinancing. Many people are making the mortgage payments regularly after losing their jobs. So they are wondering if the lenders would be ready to give them a refinance despite the unemployment. I know some people who have lost their jobs and they were paying the mortgage promptly.
An ARM will have very low interest rates at the inception but when it resets or adjusts after a set period of years they can become very expensive. Many borrowers don’t realize this or are ill prepared for it when it happens. A basic rule of thumb is if you are planning to stay in your home for at least 10 years then it would be wise to refinance home mortgage and lock in lower rates. The reason we say at least 10 years is because the savings that you receive on the more favorable interest rates will be greater than the attorney and appraisal fees that you have to pay out at the inception of the loan.
Ask your originator what their credit looks like. An originator should have a credit report of their own on hand dated within 12 months just like anybody else should. Check your credit every 12 months and know where you stand. If they can’t handle their own finances, can they really handle yours? Keep these changes in mind and remember, if something doesn’t seem right in your refinance or home loan, if you don’t speak up you might pay the price for it every month when that mortgage statement hits your mailbox.
Learn more about Obama Mortgage Relief Plan Qualifications.
