Thomas Murphy - Pine Shores Real Estate



Posted by Thomas Murphy on 11/4/2011

There is good news on the home front for homeowners whose mortgages amount to more than their home’s value. These underwater homeowners may qualify for a new program HARP, or Home Affordable Refinance Program. Many homeowners have found they owe more than what their home is worth. When the housing bubble burst some homeowners were left with a $250,000 house, for example, but a $350,000 mortgage. HARP was first introduced in 2009 by President Barack Obama but the program is now being expanded to include homeowners who are unable to qualify for refinancing under conventional guidelines. HARP's previous terms included restrictions that eliminated any homeowner whose existing mortgage represented more 125% of the loan-to-value of their home. The new and improved HARP will allow borrowers whose mortgages are backed by Fannie Mae and Freddie Mac refinance. The new plan still has eligibility limits. Previous homeowners that refinanced under HARP will not be allowed to refinance at the even better rate of 4%. In order to qualify, the mortgage has to be a Fannie Mae or Freddie Mac and you must be current on all loan payments in the last six months or not have more than one missed payment over the last year. The FHFA, or Federal Housing Finance Agency, is expected to announce final program parameters by November 15.





Posted by Thomas Murphy on 10/5/2011

Paying off your mortgage early and having no bills sounds like a no brainer. The answer however is not so simple. The answer really is; it depends. First you need to ask yourself a few questions. 1. Have you capitalized your employer’s match to your retirement savings? If the answer is no and you are not contributing the maximum than you are throwing away free money. You may want to consider putting your money here before paying down your mortgage. 2. Do you have other debt other than your mortgage? Pay off high interest credit card debit first. It makes no sense to pay off a lower interest loan and carry high interest debt. 3. Do you have an emergency fund? Experts suggest at least a three month supply of living expenses. Some even go as much as twenty four months of living expenses after the turn in the economy and job market. It makes more sense to have money set aside for a sudden loss of income before you pay off your mortgage. 4. Do you owe more than your house is worth? If you are upside down you are more susceptible to foreclosure. Ask yourself how much how much you enjoy living there. Would you be willing to buy it again for more than it is worth now? 5. Do you have life, health and disability insurance? If you are the main source of income in your household what would happen if you were no longer able to make the payments? Putting safety nets in place first is a wise idea. 6. Do you believe you can get better return investing elsewhere? Paying off your mortgage is an investment decision. Ask how does paying off my mortgage stack up with other investment options? 7. Are you thinking of retiring and want to live with the worry of a payment. The thought of living on a fixed income can be scary. Paying off your mortgage may give you peace of mind. There is no right or wrong answer to this question. It really comes down to what is most important to you. Sometimes, the answer is not based just on dollars and sense and more on what works for you, your life, your family situation and just plain old personal preference.




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