Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments more affordable, many lenders offer home loans that allow you to (1) pay only the interest on the loan during the first few years of the loan term or (2) make only a specified minimum payment that could be less than the monthly interest on the loan.
Whether you are buying a house or refinancing your mortgage, this information can help you decide if an interest-only mortgage payment (an I-O mortgage)–or an adjustable-rate mortgage (ARM) with the option to make a minimum payment (a payment-option ARM)–is right for you. Lenders have a variety of names for these loans, but keep in mind that with I-O mortgages and payment-option ARMs, you could face
“payment shock.” Your payments may go up a lot–as much as double or triple–after the interest-only period or when the payments adjust.
In addition, with payment-option ARMs you could face
negative amortization. Your payments may not cover all of the interest owed. The unpaid interest is added to your mortgage balance so that you owe more on your mortgage than you originally borrowed.
Be sure you understand the loan terms and the risks you face. And be realistic about whether you can handle future payment increases. If you’re not comfortable with these risks, ask about another loan product. Skip to content
The Federal Housing Administration, generally known as “FHA”, is the largest government insurer of mortgages in the world. A part of the United States Department of Housing and Urban Development (HUD), FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories. While borrowers must meet certain requirements established by FHA to qualify for the insurance, lenders bear less risk because FHA will pay the lender if a homeowner defaults on his or her loan. FHA has insured over 38 million home mortgages and 47,205 multifamily project mortgages since 1934. Currently, FHA has 6.1 million insured single-family mortgages and 13,000 insured multifamily projects in its portfolio. Clearly, FHA provides a huge economic boost to the country in the form of home and community development, particularly in today’s challenging financial climate.
HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.
If you need help understanding the Making Home Affordable programs, you can contact a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.
Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.
Whether you’re in foreclosure now or worried
about it in the future, we have information that can help.
Get Help Now!
Talk to a foreclosure avoidance counselor
Talk to your lender
Find state and local foreclosure resources
Contact HOPE NOW
Contact The Homeownership Preservation Foundation
Keep Your Home
Are you at risk of foreclosure?
Tips for avoiding foreclosure
Making Home Affordable Program
Who to call when a lender won’t work with you
If You Can’t Keep Your Home
Redemption period – your last chance to save your home
Local renting resources
U.S. Postal Service Movers Guide
This past week was absolutely wonderful in terms of real estate. I received a call from a couple that wishes me to assist them with the sell of their Pasadena home. I was very excited and motivated all at the same time.
The sellers only want to deal with investors and is not seeking the traditional listing procedure (MLS, etc.). A challenge I stood up and embraced with honor. I took a look at my options and began to act upon some of them. After several phone calls I was in contact with several investors.
The market is very good in this area of Pasadena and should bring in a very nice profit for these sellers. This opportunity is still open and my goal is to satisfy my clients.
I’ll keep you posted.
I have returned to one of my old neighborhoods which has now become my farm. I find myself outside in my front yard twice a week watering the front lawn. Quite a few of my neighbors either walk their dogs everyday or walk for exercise themselves. This makes for a perfect opportunity for me to get acquainted and re-aquainted with my neighbors. I have posted business cards in the neighborhood grocery store bulletin board and am putting the final touches on new post cards. I have had 100 post cards made so far. I will be distributing them by the end of August.
Currently I am doing open houses and am working with some property investors seeking income property in the South Bay area.
I meet all kinds of people everyday. I have even met a young woman from a foreign country (now US citizen)that ask me to help her and her family straighten out her credit so that one day she can buy a house.
When I say that I enjoy helping individuals and their families fulfill their dream of owning a home I mean just that.