My New Blog

     Times are still a little rough out there for a lot of people.  The official unemployment rate is still just under 10%, and some people think it is really higher.  So, what if you find yourself having a hard time making your house payment?  Well, you can always try the HAMP program that the Federal Government came up with.  This is basically working with your bank to come up with better terms for you so that you can make your payment more easily.  You can find more about this at www.makinghomeaffordable.gov.  Try this out, and if it doesn't work for you, try again.  Things are changing quickly in this environment, so don't take no for an answer.  Just be nice when you call!  Get their name(s), be sincere and honest, and see what happens.

    Another little-known strategy is something called "Recasting".  Basically it is keeping the loan amount and interest rate that you have, but starting over with your ammortization.  How could this help you? 

    Let's say that you have paid for years on your loan and have paid down your principle an appreciable amount.  Or, you have paid extra through the years, or you came into money and want to put it toward the principle, but you also want your payment to go down.  What you can ask your mortgage company to do is to basically start the loan ammortization over, but with the current principle amount.  So, if you started out with a 30 year mortgage of $150,000 and now owe only $100,000, you may get your mortgage company to finance the $100,000 for 30 years.  It is like starting over but with a lower loan amount, therefore your payment goes down.  

    What are the benefits other than lowering your payments?  Well, it is much cheaper than refinancing.  We are talking hundreds of dollars as opposed to thousands.  Be aware, though, not all mortgage companies offer recasting, and even if they do, they are not required to approve everyone that applies.

    The downside?  You may end up paying more interest in the long-run, especially if you run the full term of the recasting.  You will probably have the option of making additional principle contributions to mitigate this, however.

    Bottom line, DO NOT LET YOUR HOME BE FORECLOSED ON!  If you need to talk to a non-mortgage person, give me a call.  I will try to answer any question you have myself, or get you to someone who can.  I do not charge for this, and am not making this offer as a "come-on" to get business.  I just think that it is tragic that so many homes are being needlessly foreclosed on due to misinformation and frustration.

    Thanks for reading.

    Have a great day!

    Mike