Which Type of Loan or Mortgage Modification Will Prove Most Useful For You?
In recent years many home owners have found it difficult to keep up with their growing monthly payments and request help through some sort of loan/mortgage modification assistance. Rising interest rates have created a monster that causes some to forfeit their homes, allowing banks and other lenders to foreclose on their mortgages in order to recoup some of the money lost when the financial crisis came into being a few years ago. Many lenders have been forced into receivership themselves due to the problems many think came into being when adjustable rate mortgages first caused borrowers to struggle.
One of the first actions President Obama did when he took office in January of 2009 was to offer ways to help the many home owners who found it difficult to make their monthly payments. The loan/mortgage modification program is helping many to remain in their homes and meet their monthly payments. Mortgages are generally paid out over a period of fifteen to thirty years with the interest rate spread out according to the length of the obligation. Fixed rate mortgages mean the rate of interest is set or fixed at a pre-determined amount, usually six to eight percent. ARM's or adjustable rate mortgages are exactly as it sounds; they are adjustable and change according to the prevailing rate of interest from year to year. When the housing crisis began a few years ago interest rates soared due to home prices climbing and less homes being bought or sold.
Additionally, when the foreclosure rate began to climb, this hurt many lenders severely, causing them to raise every cost they could in order to stay in business. When loan/mortgage modification is used to help borrowers, the mortgage is generally lowered by means of lowering the rate of interest or lowering the principal still owed on the mortgage. Insurance rates have also risen in recent years and that has not helped those who are already having difficulties meeting their monthly obligation. It is obvious there is more assistance needed to keep mortgage holders in their homes.
Article Source: http://EzineArticles.com/?expert=Michel_B.
One of the first actions President Obama did when he took office in January of 2009 was to offer ways to help the many home owners who found it difficult to make their monthly payments. The loan/mortgage modification program is helping many to remain in their homes and meet their monthly payments. Mortgages are generally paid out over a period of fifteen to thirty years with the interest rate spread out according to the length of the obligation. Fixed rate mortgages mean the rate of interest is set or fixed at a pre-determined amount, usually six to eight percent. ARM's or adjustable rate mortgages are exactly as it sounds; they are adjustable and change according to the prevailing rate of interest from year to year. When the housing crisis began a few years ago interest rates soared due to home prices climbing and less homes being bought or sold.
Additionally, when the foreclosure rate began to climb, this hurt many lenders severely, causing them to raise every cost they could in order to stay in business. When loan/mortgage modification is used to help borrowers, the mortgage is generally lowered by means of lowering the rate of interest or lowering the principal still owed on the mortgage. Insurance rates have also risen in recent years and that has not helped those who are already having difficulties meeting their monthly obligation. It is obvious there is more assistance needed to keep mortgage holders in their homes.
Article Source: http://EzineArticles.com/?expert=Michel_B.
