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Underwater Loans In The U.S.


wealthymattersMore than nine million homes in the United States alone are deeply underwater as of Dec 2013. Homeowners living all across the country find that they cannot depend on their homes to retain the value given when originally purchased. Many Americans blame this trend on the recession that left millions of people out of work and thousands of U.S. companies closing. As the housing market fluctuates, it causes changes in the value of various homes.

An underwater mortgage is essentially a home that is worth less than the loan on the home. A mortgage is a natural part of buying a home today. Various lending programs let future homeowners make a small down payment and borrow money to pay for the rest of the balance. Some lenders also give borrowers the right to roll the down payment into the loan itself and pay little to buy the home. Other loans allow borrowers to borrow a larger amount that they need to cover the cost of repairs to the property, new furniture or closing costs. Read more of this post

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Home Loans In The US


wealthymattersHome loans are one of the most common types of loans in the United States today.The US has many home loan options which make home ownership and investing in residential properties easy.In addition to the conventional fixed rate and adjustable rate mortgages found world-wide,there are VA Loans,FHA Insured loans and HomePath Mortgages that offer simpler and cheaper ways to purchase residential properties.

Lately refinancing has become a particularly popular option for homeowners in the US, struggling in the face of the economic recession, which has in part caused home pricing to rise despite poor sales in the real estate market. Refinancing helps ¬†lower mortgage payments and allow a person to stay in their home after a financial setback.Refinancing is also an option exercised by savvy real estate investors who want to take advantage of the historically low interest rates in the US and use the bank’s money to grow rich.

When the mortgage balance exceeds the current property value we have an “underwater” mortgage. Refinancing options on such properties are limited because most lenders require some equity in the property ,ideally about 20 percent.However, borrowers can avail of the US government’s Making Home Affordable program(HARP) instead of going for a Short Sale.This program allows qualified borrowers to refinance a loan that is from 105% to as high as 125% of a home’s value.To qualify for HARP,a person must not be on the road to foreclosure.Any delinquent payments in the past 12 months will automatically disqualify a person from eligibility.Second, either Fannie Mae or Freddie Mac must own the loan. Read more of this post

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