Refinancing Your Mortgage, Will it Help?

If you’re a homeowner struggling to make your mortgage payments you have one of the following options: sell your property and move, refinance your mortgage and maintain ownership, foreclosure, or file for bankruptcy in conjuction with one of the aforementioned options.

The last two options, bankruptcy and foreclosure, should be avoided at all cost.

You may have decided that you are not quite ready to sell your house and, at least temporarily, givne up on the American dream. If that’s the case, your best option might be to refinance your mortgage.

We say, "might be your best option", because America is currently experiencing a credit crunch and many lenders that were in business over the past several years are no longer in business. Additionally, you must make sure that refinancing makes sense as mortgage rates are going up. If you are able to refinance out of your current loan your new refinanced mortgage payments might actually be higher!

For this reason, just because you want to refinance your mortgage does not necessarily mean you are going to be able to refinance your mortgage.

There are many factors that go into a lender’s consideration when granting a home mortgage loan. These factors include items such as: stable employment, annual income, length of employment, past bankruptcies and/or foreclosures, past credit reportings, current credit scores, and probably the most important factors, the property’s value and the ratio of debt to value.

Unfortunately, these new requirements disqualify many Americans that, in previous years, qualified for a mortgage.

An example of how to determine a debt to value percentage can be found by dividing a property’s outstanding debt by the value of the property; e.g. a property has an outstanding debt amount of $70,000 and a fair market value of $100,000, then a property’s debt to value (otherwise known as loan-to-value or LTV) is 70%.

In the aforementioned example, the homeowner has a decent amount of equity. Unfortunately, as we already know, equity isn’t enough. Even in this example, most lenders will still disqualify borrowers with a poor credit history or less then stellar employment offerings.

However, using this same example, if the borrower had a good credit and employment history and wanted to stay in their home, their first choice should be to speak to a mortgage professional about refinancing their mortgage.

But what if your loan amount is equal to $95,000, $100,000, or even more money per $100,000 of value? In this example you could actually owe as much as your property is worth or even more! No lender will lend to a struggling homeowner that owes an amount equal to or greater than what the property is worth.

In this example, your only options are to sell your property willingly, or to lose your property to foreclosure or bankruptcy – the latter of which are not recommended options.

If you’re asking yourself, “If I owe close to or more than my property is worth, how can I realistically sell my property?” Then ask no more because that is where our services become valuable to you.

Our services walk you through a systematic, step-by-step process that builds your case and guides you through negotiations with your lender as to why they should accept less money than they are owed. It is called a short sale and many Americans today are utilizing this powerful opportunity to get back on track with their lives and regain peace of mind.

Moreover, even if you have equity in your property or are not behind in mortgage payments, you may still qualify for a short sale.

While it is true that, in the past, most lenders would not consider a short sale unless the borrower was at least three months behind in mortgage payments, with this new credit crunch and lending environment many lenders are looking seriously at alternatives and are willing to consider unconventional opportunities that mitigate their potential loses; e.g. accepting a short sale for a borrower that is not behind in mortgage payments or on a property that has equity.

StepByStepShortSale.com offers a refined, streamlined process that Property Owners, Realtors, and Investors alike are able to follow when buying or selling Properties That Are Short Sale Candidates.

We recommend that you research more topics throughout our website. Once you have armed yourself with the information you need to make an informed decision, we encourage you to start using StepByStepShortSale.com's Ebook to learn how to successfully negotiate your short sale.