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How To Reduce Mortgage Payment: Loan Modification, HARP Refinance, Cut Taxes & Insurance Tips

Need a Florida Home Mortgage? Refinance your loan to a much lower rate or term click here for Florida Mortgage Rates.

If you do NOT qualify for a Making Home Affordable Refinance Program – Harp 2.0 then try some of these other tips for lowering your mortgage payment.
There are several things you can do to lower your monthly mortgage payment. Many small items are often overlooked by the consumer.

Loan Modification – Contact 1-888-Hope Now, get a do yourself loan modification kit, or contact a professional that does not charge an upfront fee.

Property Insurance. – Shop around twice per year or change coverages. This could be worth $50 a month.

Real Estate Taxes- Call property appraiser to reduce taxable value. With property values dropping this can save several hundred dollars and make a real difference each month.

Regular Refinance – If market rates are lower than what you have now check into refinancing.

HARP 2.0 Refinance- If you are underwater on value but have a Fannie Mae or Freddie Mac Mortgage this is a great program that really works.

Home affordable refinance Answers:

  1. You cannot refinance twice with HARP 2.0
  2. Refinancing will reduce your mortgage payment and or the term of your home loan.
  3. HARP reduces your mortgage payment with a new refinance loan backed by Fannie Mae or Freddie Mac. You can apply with any mortgage broker working with participating HARP 2.0 lenders.

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Loan Modification

What is a loan Modification?

A Loan Modification, or “Loan Workout Plan” is a permanent change to th terms of your mortgage and note that you signed when you bought your home. The Loan Modification is a Loss Mitigation Strategy, because of this, Principal Reductions are rare. Banks will typically Lower your Mortgage Payment by lowering your interest rate and extending the term of your loan.
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A Loan Modification is not is a Refinance. It is not a new loan, so you do not need to have Equity in your home in order to preform a Loan Modification. also because it is not a new loan, the charges for a Loan Modification service is normally much less than a Standard Refinance.
Also, unlike a Refinance, a Loan Modification does not put you into more debt by adding fees onto your loan.

A Loan Modification is a Permanent Change to your Mortgage. If Your bank offers to lower your payments for 6-18 months or move your late payments to the end of the loan, It is not a Loan Modification. That would be called a forbearance, and many times has been labeled a “Temporary Loan Modification” to mislead Borrowers. Forbearances and Temporary Loan Modifications do not solve your problem, they just delay it.
A Loan Modification is permanent, it lowers your mortgage payment for the life of the loan.

So, Who Qualifies for a Loan Modification?
According to the standard set by the Federal Government, A Borrower Qualifies for a Loan Modification if they have had some sort of Hardship.

So, What is a Hardship?
Well Here are a few examples of a hardship:
If Your home is Worth more than you Owe
If you have No Equity
If you have an Adjustable Rate Mortgage or ARM Loan
If you or your spouse are making less than you did when you got the loan
If you or your spouse has lost their job since you got the Loan
If you have been Divorced, or separated since the time you got the Loan.

These are just a few examples of what the government and banks view a Hardship as.  This means about 75% of home owners in Florida Qualify for a Loan Modification.

So, Who Should I Call, My Bank or a Loan Modification Company?
You Should Contact a Third Party Instead of going Straight to your bank. When you talk with your bank and the person on the other end give you an offer, do you really think they will give you the best offer? the person on the other line WORKS FOR THE BANK! They have been told to keep the bank making the most money off of you as possible.
Loan Modification Companies are typically Mortgage Broker Businesses, People who have years of experience negotiating with banks and serving their customers. They know how the banks work and what the banks want to see. They can Negotiate the best possible Loan Modification for you, with out the headache of spending hours per week on the phone with the bank.

How Long Does A Loan Modification Take?
Even the best Loan Modification Companies average 4-8 Months.  Most banks are not willing to negotiate with their customers. They make the process difficult so they do not have to make as many Loan Modifications. Companies who specialize in Loan Modifications can get Loan Modifications done quicker with less hassle to you than If you did it yourself.
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