Mariza V asked:


I owe 2 houses one under my name, in the rental property I am 1 payment behind in the first deed and 5 payments behind on the second deed. I can’t make the payments no more, I am in home loans, and my paycheck has been reduce soo much. I want to keep only my owner occupied property and let go the rental. Balance is $410,K and $220K on second. I been thinking on calling the lenders to give them the house back, some other friends tell me to do a shortsale, and other to file bankruptcy or forclose the property. at this point all I want is not to have $5,500 mortgage payment a month. I can’t refinance because there is no equity, and my credit has been ruined due to the late payments, I don’t want to go to a credit consultant because my intentions are not to keep the house. I need some advise before I go to an attorney .

Neil

Sean asked:


Granted you’re supposed to do your own research but what happens when a mortgage company convinces you that your fears and your worries are unfounded. Many people did have reservations about refinancing and purchasing homes with these sub prime mortgages, however these lenders really made it their business to prove it was a good move. Why would you take advantage of people regarding something this serious?
Jessica: looks like you were absolutely right! lol Good call.

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Martin Lukac asked:


What about get rid from your monthly high payments to a lower one? How that would be if on the same time you get some extra cash to spend? Well, for this big advantage one simple thing you need to do is refinance mortgage.

Refinance is paying off an existing loan with the money from a new loan. Refinance Mortgage is generally gaining a secured loan designed to replace an existing loan by the same property.

There are two options to refinance mortgage -

(i)No-Closing Cost Refinances: It offers low upfront fees, with little refinancing costs.

(ii)Cash-Out Refinances: It offers extra cash to spend, with less monthly reduction.

There can be various reasons and benefits to refinance mortgage. The money can also be used to pay of any debt, to reduce periodic payment obligations, to reduce risk, to liquidate the equity of the property.

There are few certain benefits to refinance mortgage -

-By refinancing mortgage when the interest rate is low, you can shift from a higher to lower interest rate. Thus you can save from your monthly payment.

-Same way, you can shorten the mortgage term period.

-By refinance you can exchange an adjustable rate for a fixed rate of interest. This will give you more security at monthly expenditure.

-By a cash-out refinancing you can get access to extra cash to spend on anything you desire.

-For those who have to pay Private Mortgage Insurance, a refinance mortgage can free them from this.

Before deciding to refinance, you should consider every pro and con and know exactly what advantages it would give to you. It is important first to determine whether the amount saved on interest balances the amount of fees payable during refinancing.

On this process you also need to be aware of the dangers to refinance mortgage. Churning can be a danger where lenders or brokers refinance your mortgage even if the benefits do not outweigh the drawbacks for the borrower. You need also to be very careful with the monthly payments.

To understand the financial detail to refinance mortgage, you need to know about the different interest rates -

(i)Adjustable Rate: This type of loan has changing interest rates depending on the market condition.

(ii)Fixed Rate: Here, the interest rate on the base amount is fixed through out the years of the payment of the loan.

(iii)Balloon Home Loan: The interest rate here is fixed for a set period of time. Afterwards, it works as an adjustable interest rate.

(iv)Home Equity Loan: This is a fixed rate loan allowing you to tap into your equity while giving you a fund to spend.

With this basic information at your fingertips you can now be prepared to refinance mortgage. Along with the interest rate, many refinancing lenders ask for an upfront payment of a particular percentage of your loan amount. This is called ‘points’. Along with interest rate and points you need to pay some fees and charges to refinance mortgage.



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