Learn How to Write a Hardship Letter That Will Get Your Home Loan Modified

One of the easiest and cheapest ways to get out a possible foreclosure situation is to secure a home loan modification. As a matter of fact, with mortgage modification you can make sure that the situation does not go so far, when you find that you cannot meet your monthly mortgage payment it may be time to consider home loan modification. Once you decide to opt for mortgage modification you will need to put in a ton of paper work but the initial and one of the most important documents will be your hardship letter for home loan modification. Many people make mistakes when drafting the hardship letter and it leads to the denial of their mortgage modification request. So here are a few tips on how to get things right.

The first thing that you need to remember when drafting a hardship letter for home loan modification is that your lender probably receives hundreds of these each week, this means that he/she will not have a lot of time to read your letter. So it is important to state all the key points as clearly, concisely and pertinently as possible.

You also need to remember that you are asking the bank for a favor, so be very polite, making complaints, whining or threatening the institution that you intend to declare bankruptcy will get you nowhere.

It is also equally important to express your flexibility and your willingness to work with the lender in your hardship letter for mortgage modification. State clearly what you are expecting in terms of home loan modification; that is do you want the loan term to be extended or are you looking for lower interest rates. But you also need to mention that you are willing to explore various options of mortgage modification. Stay away from political speeches about how the lending institutions pulled brought this situation on themselves.

The most important things to mention in your hardship letter for mortgage modification include:

Your current financial situation: You need to tell the back honestly where you are in terms of your finances and what caused the situation. Your reasons can be anything from job loss to death in the family and from divorce to a job related accident but state your reasons concisely.

The next piece of information should show the bank that you are taking steps to get out of your current situation. So it is important to mention all the things that you are doing to save money in your hardship letter for mortgage modification. This can include a part time job, reduction in household expenditure etc.

Finally prove it to the bank with as many documents as you can that your situation is real. However, you are a responsible person with a good repayment record in the past and that you intend to make the new payments after securing mortgage modification.

Need Information on No Deposit (Low Deposit) Home Loans

Since the global financial crisis mainstream lenders/credit providers have made numerous changes to their lending criteria, and it is now not easy to get a 100 per cent-plus home loan deal. However, there are some specialised lenders/credit providers who have recognised the difficulty that many aspiring home owners experience when searching for home loans and so, have introduced no deposit (also called low deposit) home loans.

Mortgage/Home Loan Products available

Here is a list of no deposit (low deposit) mortgage loan products for you to consider that will:

>> Allow you to borrow up to 96% of the purchase price

>> Allow you to capitalise the Lenders Mortgage Insurance (LMI) on top of your loan amount, which can bring the total (LVR) to 97 per cent or 98 per cent

>> Allow you to borrow a maximum (LVR) of 100 per cent including LMI costs

>> Allow a maximum (LVR) of 120 per cent with LMI capitalised. But a “guarantor” is required, and

>> Even recognise 12 months continuous rental payments made by you as part of your genuine savings requirements

It is important to remember that the risk to the specialised lender/credit provider is greater for no deposit (low deposit) loans. And so, you will pay a “premium” interest rate for the privilege, usually about 2% higher than the current market rate.

Application Assessment Process

When assessing your eligibility for a no deposit (low deposit) home loan, the specialised lender/credit providers will adopt a stringent assessment process. They will be looking closely at your capacity to repay the home loan. To work out what assessment criteria applies to you; speak to an expert finance broker. Here, are a few tips to help you:

>> Ensure you can demonstrate a strong stable income

>> Try to show at least some genuine savings or show your 12 months continuous rental payment statements, and

>> Ensure your personal debts (credit cards and personal debts) are under control before committing to a no deposit (low deposit) home loan

Seek Expert Advice

As with any aspiring home owner, buying your first home at any stage of life can be an overwhelming process. Not to mention knowing which specialised lender/credit provider is willing and able to assist you can be daunting. So, having an expert finance broker on your side will save you lots of time and heartache.

Employing the services of an expert and professionally qualified finance broker, who specialises in all loan products and finance solutions, is the key to finding the right loan. You need to sit down with an expert finance broker who will be able to explain that there are a number of specialised lenders/credit providers offering high “Loan-to-Value Ratio” (LVR) home loans that will allow you with no savings behind you to take on a mortgage home loan debt.

So, don’t worry if you want to obtain a no deposit (low deposit) home loan. Contact a professionally qualified finance broker to help you.

Home Loan Refinancing Is It Right For You?

There are many reasons that a person may choose mortgage refinancing. This option allows a wide range of financial possibilities. For some, refinancing comes out of need for extra cash. Others may see refinancing a home loan as a way of lowering interest or payments. Those who have recently increased income may choose loan refinancing to shorten the term of the home loan. While some homeowners refinance simple to secure a fixed interest rate. No matter what the reason is behind choosing mortgage refinancing there are some things one should know. Below are some tips regarding home refinance which you may find helpful.

How to determine if refinancing is right for you?

If you are considering redoing your home loan make certain the choice is right for you. Ask yourself what benefits you will gain. As well, look at the negative aspects mortgage refinancing may bring. Here are some points to consider:

• If you are refinancing out of financial need make certain that the benefits of refinancing out weigh leaving things as they are.

• If you are refinancing to secure a lower interest rate keep in mind that most people do not see lower payment from this type of refinance for up to three years. This may be a good choice in the long run. However, do not expect to see immediate results.

• Are you prepared to pay closing costs and application fees? These may be quite expensive. It takes many people several months to regain the cost of these fees in lower monthly mortgage payments.

• Does your current mortgage or the mortgage lender you are considering offer fixed interest rates. Most often fixed rates are the better choice over those which fluctuate.

• Will the new payments be within your budget?

What is Cashout Refinance?

Cashout refinance occurs when a homeowner refinances to acquire a cash loan against the equity in their home. For example, if the home is worth $210,000 and the person only owes 110.000 they have an equity of around $100,000. They may choose to refinance the home for $140,000. The person would receive $30,000 in cash. Their new mortgage amount would be $140,000 plus interest. This may be an option for someone with immediate financial need. However, when considering a cashout refinance keep in mind that you are lengthening the time it will take to pay the home off. As well, you will be paying much more interest in return.

Be aware of variable rates when refinancing a home loan.

Variable rates are interest rates that fluctuate. This means your monthly payment amount could change at any time. If you are living on a budget increased payments could become an issue. This could cause great financial stress. It is best to choose a mortgage which offers a fixed interest rate. This way your payments will remain the same for the duration of your mortgage.

Mortgage refinancing may or may not be a wise choice. If you are considering this option take time to think it through. Do not rush in to a hasty decision. Redofinancing.com is where you can find information and tips about all different kinds of refinancing. If you do find refinancing to be the best option for your financial situation choose a reputable lender. Also, make certain to understand all of the new terms before you agree.