How can you reduce what you owe on your mortgage? Look at the title of this section again.
Do you really see what it says? Do you believe it? Can you really reduce what you owe? What if we told you that it is indeed very true? Under certain circumstances it is possible for you to reduce what you owe on your mortgage.
It's important to discuss and understand what equity is.
How many homeowners actually understand what equity is? Equity is the current market value of your home minus the current loan on the home.
If you are trying to sell your home, any costs that are incurred in the sale will cause the equity to be figured as value of the home, minus the loan, plus the costs of the selling.
There are Equity Stabilization programs in place that can help homeowners who have little to no equity in their homes.
If you are interested in reducing what you owe, these programs will dramatically reduce what the homeowner owes on their property and increase their equity to 20%, and lower the interest on the loan to 5%.
Now how good does this sound, or maybe too good to be true? Well it is true.
Do be aware that the process will take roughly ninety to one hundred twenty days to go through.
When the final documents are filed, a new loan will be established.
This loan will be for either a fifteen or thirty year term.
With this type of loan, the payment will be dramatically reduced as well as the homeowner will receive 20% equity in the property.
Let's do some calculations.
Let's say that, before the Equity Stabilization program, you have a loan that is worth $392,000.
Your mortgage payment is $2381.
83 based on 6.
125% interest rate and your home is valued at $300,000.
If you qualify for the Equity Stabilization program your loan will become $240,000 or 80% of current market value which is $300,000 giving you $60,000 in equity with a mortgage payment of $1288.
37 based on 5% interest rate.
That is a savings of over 46% compared to the current payment! Are you thinking seriously about the program now? So how does this Equity Stabilization program work? The program establishes that the lender no longer holds the lien.
This in turn causes the loan to be invalid because the loan is not secured.
Then the loan has to be rewritten and a new lien established at a reduced market value of the home.
Papers will then be filled out for the lender and for the homeowner to take to the County recorder's office.
There will be a minimum fee required for filing these papers.
It at this time that your 90 to 120 days of waiting for the papers to process will occur.
Of course like any good thing, there are some stipulations that you will have to meet to qualify for the program.
Generally anyone who has a securitized loan that was initiated between the years 2001 - 2009 will qualify.
Does this program sound good to you? How cool would it be to gain equity, as well as lower your loan total and your monthly mortgage payment? Maybe this program is something you should check into.