In this current economic situation, one problem that is still ongoing is the housing foreclosure crisis. Foreclosures are increasing every month, and experts expect that more and more homeowners will face this eventuality sooner rather than later.
If you currently hold a mortgage and are trying to find ways to reduce the monthly payments, here are some suggestions you may wish to utilize.
One way in which you can save on interest rates is by seller financing. This means that the payments are made directly to the seller and not the lender. The advantage cited is that “you can sometimes arrange a lower interest rate,” especially at this time when the value of homes have decreased and the seller has no other options. In addition, no private mortgage insurance is required.
However, it is very possible that the seller will ask for a shorter payment plan than the more traditional 30-year mortgage.
If you are a homeowner, you have undoubtedly heard of points. In some instances, you can offer to pay more points in order to garner a lower interest rate. Or, you can opt for a 15-year mortgage instead of a 30-year mortgage.
Another way you can save money is to pay off your mortgage sooner. Again, just like any debt, the more you pay the less interest you will owe.
Researching different mortgage lenders is the clearest route to finding the best mortgage for you. Depending upon your credit report and FICO score, you may be suitable for a low-interest fixed rate mortgage.
You will have to begin comparing and contrasting the various lenders, however. While some banks are still withholding money and not resuming their lending practices, there are others who may be willing to offer you a good interest rate based on your credit history.
Remember, too, that the reason banks are not lending is because of the sub-prime mortgage crisis. The money they received from the Treasury is being held in abeyance because the banks know that future foreclosures are on the horizon and they need whatever capital they have to prepare for that eventuality.
It is also important to stay away from any predatory lenders who offer you a mortgage rate that, for all intense and purposes, seems too good to be true. Recent news reports claim that these unscrupulous individuals are back in business and will try to trick you into using their services to obtain a low-cost mortgage.
Whether you purchase a new home or try to scale down your existing mortgage, it is vital that you speak with qualified, certified professionals who can offer you the best advice possible.