Financial Challenges Support Group

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feeshee 09/15/2011

Hello all

I'm looking into hopefully lowering my monthly mortgage payment thru a "Making Homes Affordable" modification loan. This would be with Bank of America, who currently holds my home mortgage.

Just wondering if any of you have had any experience with this type of mortgage loan.......positive or negative.

Any advice or input would be greatly appreciated.

Thanks,
Feeshee

2newadvntrs 09/16/2011

Is this something you really feel you have to do? where are you in your mortgage now as far as principle versus the interest in your monthly payment? If you are at that pivoting point where your interest is lower than your priciple amount it may not be worth it to refi. You may be lowering your payment but again you will be stretching out your loan again for another 10 , maybe 15, 20, or 30 years...and that could put you in a worse predicament. I would love to refi myself but the thought of now being past the lowered interest rate and extending it another 20 years just to have a 600.00 payment certainly is not wise on my part. In the long run the interest starts over again it will take at least on the average before the scale tip where the principle payment overrides the interest.
After you pay about 2500-3000 for a refi and closing points, a new inspection for 500.00 it just isn't worth it..Buying a point down will cost you another 500-1,000.
I would ask bank of America if they would re-amoratize your loan first. That may be a cheaper way to keep the same interest rate and lower the payments to the years left on the loan..That is only 500.00.
If you are set on a total refi, then by all means shop around make the lenders compare the best loan package for you..
Making homes afordable loans have some set backs you have to have mortgage insurance on your loan which will cost you an average of 5,000 to 7,000 a year. That is money thrown away, and it doesn't go on the mortgage..That is my only negative drawback for that type of loan..and that you have to be almost low income to qualify, but make just above poverty. If you fall anywhere higher or lower you may be looking at penalties which will also be costly.Doesn't matter if you are not late.
Another Loan package that Yes Obama messed up!

2newadvntrs 09/16/2011

Oooops it will take at least on the average of four years to see the pivot point..

feeshee 09/16/2011

Thanks 2new for your advice. Wow, this is more complicated than I realized.

2newadvntrs 09/16/2011

feeshee...Are your reasons for doing a refi would be to lower your payment to buy another home? Or to stay afloat, are you having unbearable times in this economy? Or are about to loose your home and still have the great credit? If you answered yes to these questions..then it might be to your advantage to refi..But you really have to question it, or even if it is worth it. First start by looking at your mortgage statement..Do you have more on the principle now than interest? Is it equal..If you answered yes to those you may not want to refi.

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