You may be thinking about modifying your mortgage because of the economic crisis these days. However, the last thing you want to do now is to make uniformed financial decisions. Mortgage modification is not an either-or issue. Mortgage modification may be good for some and bad for others. Is mortgage modification for you? Here are some things you may need to know before deciding.

Low Cost Processing

Processing a loan modification is not that costly or may even be processed without any cost at all. Modifying a mortgage would take about 30 to 180 days.

Extended Term

The shorter the terms in mortgage the more negative the amortization. Negative amortization is when the minimum monthly payments are so high, thereby making debt settlement difficult. Through loan modification, loan providers would initially extend the terms of the payment. A longer payment scheme lessens the amounts of monthly payments thus making loans more affordable.

Low Interest Rates

Mortgage modification basically reduces the rates to as much as 3 to 7 percent. Just refer to your loan provider for the rates, thus rates reduction would depend on your lenders.

The principal balance is the total amount that you have to pay. Mark down in the principal balance will also depend on your loan provider.

Like everything else, load modification also has its drawbacks. Some of its disadvantages include the following:

Eligibility Requirements - To find out if you are eligible for mortgage modification, you will need to submit documents for financial evaluation. A thorough verification of the borrower?s status will be made to ensure that the borrowers are really eligible for the program.

Negative Effect On Credit History or Background - Obviously, not everyone is eligible for home mortgage modification. Usually loan providers take precautions in choosing a borrower. They would prefer individuals with good credit background in the past or provide a higher credit limit to individuals with good credit standing. People modifying their mortgage would result to higher credit risk than those who don?t, since it would greatly affect your future borrowing abilities depending on how the loan was modified. Many borrowers would call off in modifying their loan, it?s because they want to maintain a good credit record which can be used as a future reference for upcoming loans, more so if they want a higher loan amount.

Scams - Loan mortgage modification can be tempting and it is not unlikely to find individuals taking advantage of the program. It would be best to consult people who are knowledgeable of mortgage modification process before entering into an agreement with a third party. Just be cautious, for you might be scammed.

Modifying your mortgage is an option to consider when you are facing financial hardships. But before making your decision you have to weight the pros and cons of the program. You have to take into consideration the benefits that the program would give to you. It is best to consult a professional, who are knowledgeable on loan modification to ensure your security.

Check out more options online for your second home mortgage. Log on to http://www.homemortgageonline.org for the latest updates.

Article kindly provided by UberArticles.com

In 2006 and 2007, lax lending standards enabled hundreds of thousands of borrowers to qualify for loans they couldn't afford, causing them to lose their homes and their lenders to lose billions of dollars. Now the pendulum has swung to the other extreme.

New rules on income and debt make getting a mortgage harder today. In addition to a good credit score, your house payment should not exceed approximately 36 percent of your income before taxes. Furthermore, your monthly payment plus your minimum monthly revolving and installment debt should be less than 42 percent of your gross monthly income.

Finally, you may need to document virtually every aspect of your financial picture: income, employment, assets, debt and obligations such as alimony and child payments.

Here's some advice from Sue Stewart, a mortgage expert from MortgageMatch.com, a new web- site designed to make it easier to find and apply for the right loan.

1. Take Charge of Your Credit. Your credit scores and credit history are more important to lenders than ever. Check out your credit history at each of the credit-rating services: Experian, TransUnion and Equifax. Go over them carefully and take steps to correct errors.

2. Know How Much You Can Afford Before You Shop. Don't let yourself fall in love with a house you can't afford. With today's online mortgage tools, you can find out what you can afford in terms of down payment, closing costs and monthly costs that include principal, interest, taxes and insurance. Decide what your limit is and stick to it.

3. Get Your Documents in Order. Don't wait until you've put a contract on a house to get organized. It may take you some time to get all your documentation in hand. Find out from your lender or your real estate agent what you will need and be ready to submit everything with your application.

The good news about buying a home or refinancing these days is that interest rates are at historic lows. To take advantage of the "buyers' market," make it easy for your lender to approve the financing you need so you can house hunt with confidence.

A new mortgage website gives borrowers a complete estimate of their costs of ownership before they apply for a loan.

When looking for a mortgage in todays market you are swapped with information, products and deals. This can make the whole process very daunting and confusing. For this reason it is good to be prepared with a set of questions to ask your mortgage broker, so that you do not get ripped off and you know where you stand.

1. What are different types of mortgages and in what way do they work? - There are a mass of different types of mortgage products on the market, so make sure that your broker explains the differences between the different types of mortgages and how they can benefit you. For example may lender these days offer fixed rates, discounts and cashback over a number of terms. Also make sure that you get an outline of the varying ways of paying the capital off. This at first might seem to be a complicated area, but once you have the basics explained everything will become a lot clearer and you will start to see how different products will suit your personal circumstances better than others.

2. What is the Annual Percentage Rate (APR)?- In accordance to regulations the APR is meant to appear in all adverts alongside the headline mortgage rate. The APR is used to provide customers with the true cost of loans and empower them to be able to compare different deals. Do remember that APR is unreliable and is no substitute for personal prepared quote that outlines all upfront and ongoing costs.

3. What is the interest rate that I will be charged? - In the cases of fixed, capped or discount rate then your broker should tell you what the initial rate you will paying and how long you will be on that rate for.

4. So what happens at the end of the fixed or discount rate period? It is important to know what will happen when your fixed or discount rate period ends. Will you be switched on to the standard variable rate or will the lender offer you another discounted or fixed rate deal. Also remember remortgaging is a good option.

5. Standard Variable Rate. What is that? Because house prices are at a record high many people (probably including yourself) are now thinking of their mortgages in the long term as well as the upfront rate. For this reason it is worth knowing what current customers are paying. It is highly unlikely that when you come to the end of your fixed or discount rate period you will be on the same SVR as current customers. But you can use the information to see how the lender compares against others in the market.

6. What are the Early Redemption Charges or Early Repayment Charges attached to the product? Most mortgage deals will involve some kind of repayment charge. So you will have to a fee to the lender if you repay your mortgage early or switch to another lender within a set time period. Make sure you find out precisely what you will have to pay and what would happen if you moved home during the mortgages term.

7. What will my monthly payments be at the quoted interest rate? Your broker should tell you exactly what your monthly payments are going to be. They should also tell you what you would be paying at the SVR as to give you an indication of what you will be paying after your products term comes to an end. Get the broker to work out the payments on interest rates of up to 11% as well. This way if the interest rates rise substantially you will be able to see if you can afford the mortgage.

8. Are there any other conditions attached to the mortgage? Different lenders will have different deals, incentives and clauses. Lenders will offer better discounts, fixed rates or cashbacks if you are prepared to take the lenders building and contents insurance. This is something that will be worth considering. Just make sure that you are informed about the terms and what would happen if you moved your insurance cover.

9. Are there any Higher Lending Charges? With some lenders there may be a Higher Lending Charge (HLC) if you are borrowing more than a certain amount of the value of the property. Make sure you know what the charges are and how much the fees are. Some lenders will add HLC charge to the loan others will charge it upfront.

10. What are the arrangement or broker fees? Your broker should tell you about every payment you will have to make to arrange your mortgage. This will give you an idea of the whole cost of the deal rather than just an upfront rate. This will also allow you to shop around and find the best deal.

So next time you are looking for a mortgage make sure you have these ten questions to hand.

James Copper enjoys writing on areas of mortgages and loans. He works for Adderson & Co. who are specialists in Secured Loans and the Bad Credit Remortgage.

Source: www.1starticles.info

The possibility of losing your home because you can't make the mortgage payments can be terrifying. Perhaps you're having trouble making ends meet because you or a family member lost a job, or you're having other financial problems. Or maybe you're one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate and you want to know what your payments will be and whether you'll be able to make them.

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation's consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can't tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

Here are some examples of types of mortgages:

Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter. ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.

Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase and you have trouble making the increased payments, find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you're planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you're planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You're Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. The longer you wait to call, the fewer options you will have.

Many loan servicers are expanding the options available to borrowers- it's worth calling your servicer even if your request has been turned down before. Servicers are getting lots of calls: Be patient, and be persistent if you don't reach your servicer on the first try.

You may qualify for a loan modification under the Making Home Affordable Modification Program (HAMP) if: your home is your primary residence; you owe less than $729,750 on your first mortgage; you got your mortgage before January 1, 2009; your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31 percent of your current gross income; and you can't afford your mortgage payment because of a financial hardship, like a job loss or medical bills.

If you meet these qualifications, contact your servicer. You will need to provide documentation that may include: information about the monthly gross (before tax) income of your household, including recent pay stubs. your most recent income tax return. information about your savings and other assets. your monthly mortgage statement. information about any second mortgage or home equity line of credit on your home. account balances and minimum monthly payments due on your credit cards. account balances and monthly payments on your other debts, like student loans or car loans. a completed Hardship Affidavit describing the circumstances responsible for the decrease in your income or the increase in your expenses. For more information, see www.makinghomeaffordable.gov/modification_eligibility.html

If you're interested in refinancing to take advantage of lower mortgage rates, but are afraid you won't qualify because your home value has decreased, you may want to ask if you qualify for the Home Affordable Refinance Program (HARP) or the HOPE for Homeowners (H4H) program. For more information, see www.hud.gov/foreclosure.

Avoiding Default and Foreclosure

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer: Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you've missed a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn't going to help you if you're in a home you can't afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications may include reducing the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A modification also may involve reducing the amount of money you owe on your primary residence by forgiving, or cancelling, a portion of the mortgage debt. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov. A loan modification may be necessary if you are facing a long-term reduction in your income or increased payments on an ARM.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you've reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to get credit, buy another home, get life insurance, or sometimes, get a job. Still, it is a legal procedure that can offer a fresh start for people who can't satisfy their debts.

If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it's the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that oversees bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to talk about them.

Contacting Your Loan Servicer

Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan.

Then, write down the answers to the following questions:

What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem? Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage? What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

Throughout the foreclosure prevention process: Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome. Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, return receipt requested, so you can document what the servicer received. Keep copies of your letter and any enclosures. Meet all deadlines the servicer gives you. Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional 'workout' assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

Housing and Credit Counseling

You don't have to go through the foreclosure prevention process alone. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost.

While some agencies limit their counseling services to homeowners with FHA mortgages, many others offer free help to any homeowner who is having trouble making mortgage payments. Call the local office of the U.S. Department of Housing and Urban Development (www.hud.gov) or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency nearby. Or consider contacting the Homeownership Preservation Foundation (HPF) at 888-995-HOPE or www.hopenow.com. HPF is a nonprofit organization that partners with mortgage companies, local governments, and other organizations to help consumers get loan modifications and prevent foreclosures.

When choosing a counselor, beware of anyone charging large up-front fees or guaranteeing you a loan modification or other solution to stop foreclosure. They shouldn't be charging you high fees or making any guarantees. Take your business elsewhere.

Consider Giving Up Your Home Without Foreclosure

Not every situation can be resolved through your loan servicer's foreclosure prevention programs. If you're not able to keep your home, or if you don't want to keep it, consider:

Selling Your House: Your servicers might postpone foreclosure proceedings if you have a pending sales contract or if you put your home on the market. This approach works if proceeds from the sale can pay off the entire loan balance plus the expenses connected to selling the home (for example, real estate agent fees). Such a sale would allow you to avoid late and legal fees and damage to your credit rating, and protect your equity in the property.

Short Sale: Your servicers may allow you to sell the home yourself before it forecloses on the property, agreeing to forgive any shortfall between the sale price and the mortgage balance. This approach avoids a damaging foreclosure entry on your credit report. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov, and consider consulting a financial advisor, accountant, or attorney.

Deed in Lieu of Foreclosure: You voluntarily transfer your property title to the servicers (with the servicer's agreement) in exchange for cancellation of the remainder of your debt. Though you lose the home, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure. You will lose any equity in the property, although under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe. However, it still must be reported on your federal tax return. For more information, see www.irs.gov. A deed in lieu of foreclosure may not be an option for you if other loans or obligations are secured by your home.

Be Alert to Scams

Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are as far from honorable as they can be. They mean to take your money. Among the predatory scams that have been reported are:

The foreclosure prevention specialist: The 'specialist' really is a phony counselor who charges high fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.

Some of these companies even use names with the word HOPE or HOPE NOW in them to confuse borrowers who are looking for assistance from the free 888-995-HOPE hotline.

The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the 'rescuer' walks off with most or all of the equity.

The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don't know they've been scammed until they get an eviction notice.

For More Information To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government's portal to financial education.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

If you were to purchase a $150,000 home with a $120,000 mortgage (80%), and you paid an interest rate of 9% for 30 years, you will have paid over $227,500 just in interest (in addition to the original $120,000). That's nearly two times the cost of the home!

A credit card debt of $7000 (now the average) at 18% being paid at the rate of $20 principal plus interest each month will take over 29 YEARS to pay off, almost as long as a home mortgage. Interest charged on this credit card debt will top $18,400, more than 2.6 TIMES the original debt!

If you work for a living, you know that when you are not working, you are not getting paid. But interest never gets sick, never takes a vacation and never sleeps. It is working against you 24 hours a day, seven days a week, each and every day of the year.

So what can you do?

You may not be able to pay off your debts or mortgage now. You may not have enough equity in your home for a loan. You may not be able to afford the refinancing costs or home equity loan costs. You may not be able to lower your credit card interest rates.

But you can make additional or extra payments.

So how does making an extra payment help lower your interest charges? Is it going to make next month's bill smaller? You can't scrape together too much for an extra payment so how is just $10 going to help when you owe tens of thousands?

The secret is in making early and consistent extra payments. For example, on the home mortgage shown above, if you pay an additional $100 each month you will save over $82,000 in interest payments. Not only that, but you will also have your home paid off nine years and two months earlier. You knock nearly 10 years off your mortgage just by paying an extra $100 a month.

How does that work?

Well, that $100 extra you pay the first month would have cost you about $270 in interest to borrow for 30 years. Since you have paid it already, you can reduce your last mortgage payment by $270. The next month's extra payment will reduce your last mortgage payment by $268. Each month as you pay that extra $100, your final mortgage payment will be reduced until you won't need to make a final payment, then the second to last payment, then third to last and so forth. Soon you will have shaved years and thousands of dollars in interest charges off your mortgage.

That's great, but maybe you can't spare $100 each month. How about $50, $25, or even $10? An additional payment of $50 each month will save you five years and seven months and about $52,000 dollars. $25 each month will cut your time by three years and three months saving you about $30,000. Just $10 a month will reduce your time by one year and three months and save you over $13,500.

Every little bit helps. Some months you may only be able to add $10 to your payment; some months you may be able to add $200. And this applies to interest on credit card payments or any other kind of debt repayment. Paying down as much of the principal (or amount you owe) each month will help reduce the interest you are charged and the length of time it takes to pay off the debt.

So why don't the credit card companies charge you more of the principal each month?

How would you like to be making 18% on an investment? Wouldn't you want this investment to last as long as possible? Of course! So do the credit card companies. They are happy for you to pay off your balance, but even more excited for you to keep paying them that 18% interest.

There are some other interest tips and tricks.

- One trick your mortgage company may have played on you is to include a prepayment penalty in your mortgage. If you try to pay off your mortgage early they may actually charge you for doing so. Or they may only apply part of your payment to the principal and take the rest as a "service charge."

- Make sure when you make an additional payment that you send a check separate from your monthly mortgage payment with instructions that the amount is to be applied toward the principal of your loan. Otherwise they may just apply it towards next month's payment and still charge you the interest.

- Generally you will not have this problem with credit card companies. But watch out for late payments or going over your credit limit. They may then use these "rule infractions" as cause to raise your rate to over 25%!

- If you are looking to refinance your mortgage, look for a mortgage that lets you pay on a bi-weekly basis. Since many people receive a bi-weekly paycheck this also makes it easier to budget your money. If you are paying every two weeks you will make an additional monthly payment each year (26 bi-weekly payments vs. 12 monthly payments). Also, because you are paying the principal down every two weeks rather than every month your interest charges will be reduced.

You CAN take control of your interest charges. Make those extra monthly payments. The feeling of being debt-free will far outweigh the temporary pleasure of that burger, movie or new DVD-player.

************************************************************ © Simple Joe, Inc. David Berky is president of Simple Joe, Inc. a marketing company that sells simple software under the brand name of Simple Joe. One of Simple Joe's best selling products is Simple Joe's Money Tools - a collection of 14 personal finance and investment calculators.

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer: Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you?ve missed a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn?t going to help you if you?re in a home you can?t afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications may include reducing the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A modification also may involve reducing the amount of money you owe on your primary residence by forgiving, or cancelling, a portion of the mortgage debt. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov. A loan modification may be necessary if you are facing a long-term reduction in your income or increased payments on an ARM.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you?ve reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to get credit, buy another home, get life insurance, or sometimes, get a job. Still, it is a legal procedure that can offer a fresh start for people who can?t satisfy their debts.

If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it?s the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that oversees bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to talk about them.

When looking to remortgage, your aim is to switch to a deal that is more beneficial to you and saves you money/increases flexibility etc, whether this be sticking with your present lender or changing to another.

What Are The Benefits Of Remortgaging?

Remortgaging is a chance to switch from an inadequate mortgage and take full advantage of current products available such as fixed rate, tracker or discount mortgages which can offer you more competitive rates. Choosing the right deal for you is just as important when remortgaging as it was the very first time. Consideration should be given on your prediction of future interest rates, your own risk assessment, your income and the balance of the loan outstanding. You will also need to weigh up your monetary needs and present circumstance.

Adverse Credit Remortgages also enables you to cut loose from a dissatisfactory lender as there is nothing to say you should stay with the same one.

Doing either of these things when remortgaging may considerably reduce your monthly out goings. This is just one benefit of deciding to remortgage.

Say for example you have a loan of 100,000 and are paying a rate of 7.5% interest; you then switch to another lender which has a rate of just 7% interest. This would mean you would be saving 31 each month, that's nearly 400 per annum.

Sometimes money tied up in the house could be put to better use else where. For an amount larger than what is needed to repay your original mortgage, remortgaging can release some of this equity to put towards investing in a new business venture or maybe even another property.

How Long Will The Process Take?

The process of remortgaging tends to be faster than that of a normal mortgage (but slower than adverse credit loans) as in this case you're not buying a property. The whole process without considering individual circumstances should take on average six weeks.

The Cost Of A Remortgage

As with your original mortgage, a survey to confirm the value of your property will need to be done as the first one will no longer be valid. Add onto this solicitor fees and administrative costs, however these will be lower than mortgaging for the first time and depending on your lender, they may be able to recommend certain people in association with them that could lower your costs.

There maybe early repayment charges on your existing mortgage. This is when there is a penalty if you redeem the mortgage within a fixed period of time after commencing. For example, this could be additional pay of three to six months or a percentage of the loan amount.

When looking at the cost of a remortgage you also have to look at the possible longer term benefits of the process and the money you could save.

Quick Action Plan

If still indecisive on whether remortgaging could work for you, run through the following points:

Communicate with your existing lender and ask for a redemption statement. This indicates any penalties you will be charged in the event of remortgaging. It also states the amount still left to pay on your current mortgage.

When looking at a remortgage deal be sure to look at all the small print and ask the lender to clearly show what your potential repayments would be. It is always useful to ask for something in writing to use as a reference.

Add up all costs payable with any new lender i.e., the arrangement and administrative fees. Legal fees should also be added on, these will vary depending on where you go and the value of your property.

Armed with these facts and figures you should then weigh up whether remortgaging will benefit you and whether the long term savings will outweigh the immediate costs of remortgaging.

James Copper enjoys writing on all aspects of finance. He works for Any Loans who specialise in the Adverse Credit Remortgage and Adverse Credit Mortgages. Source: 1starticles.info

First, let me tell you that mortgage debt is the only kind of debt I don't yell about. I don't borrow money - ever. But, I know most people won't do the "100% Down Plan" when it comes to buying a home. So what are your options?

For those of you who are in debt (which is most of you), let me tell you what Sharon and I did. Nearly 20 years ago my wife, Sharon, and I hit the financial bottom because of our debt. We did an unpopular thing to help turn things around. After years of marriage and owning hundreds of pieces of real estate, we became renters. Normal mindset is that you should buy and not rent but remember normal is broke. All these years later, I can see that that was probably THE best sacrifice we made. We were able to pay off our debts and save money for a house.

Although that's the smartest and safest route, if your heart is set on buying a home you can still do it wisely. But if you can't pay cash for a house in full, how do you figure how much house is too much?

Take some time to sit down and do the math. Your mortgage payment should not be more than 25% of your take-home pay and you should get a 15 year or less fixed rate mortgage. Notice I said a 15 year mortgage, not 30. Don't be tempted by the smaller monthly payments of a 30 year mortgage. The truth is 30 year mortgages are for people who enjoy being in debt so much they want to extend it for 15 more years and pay thousands of dollars more in interest for the privilege!

Now, you can probably qualify for a much larger loan than what 25% of your take-home pay would give you. But it's really not wise to spend more on a house because then you will be what I call "house poor." Too much of your income would be going out in payments, and it will put a strain on the rest of your budget so you wouldn't be saving and paying cash for furniture, cars and education.

The point is your house payments shouldn't take over your budget. Don't let your mortgage payments cause you major stress every month for years and years to come. Your dream home needs to be just that, a dream. You don't want it turning into a financial nightmare.

Dave Ramsey is a personal money management expert, an extremely popular national radio personality and best-selling author of The Total Money Makeover. Dave is changing the face of America by helping people get out of debt and build wealth. Ramsey exemplifies his life's work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others. Read more of what Dave has to say about real estate at www.daveramsey.com (EZinearticles.com)