Monday, January 3, 2011

Looking to cut your mortgage if living in Santa Clara, San Jose, Campbell, Blossom Valley, Santa Teresa or cities across California

Looking to cut your mortgage if living in Santa Clara, San Jose, Campbell, Blossom Valley, Santa Teresa or cities across California. A strategy is given for you to consider.

Recasting works well for those unable to qualify for refinancing amid the ever-toughening credit guidelines — perhaps because they are self-employed or have less-than-stellar credit — as well as for those with extra cash, like a year-end bonus.

Let’s say that as of late December, you had just over $230,449 of principal left on a 30-year fixed-rate loan for $300,000 taken out at 7.93 percent in 1995. You have been paying just under $2,187 a month in principal and interest. But if you put in $20,000 toward that remaining principal and asked your lender to reamortize your payments over the remaining 15 years on the loan, your monthly payment would drop by $52, to around $2,135. Putting in $100,000 would save $730 a month and bring payments to $1,457.

Making extra payments toward the principal while not asking the bank to recast a loan keeps monthly payments the same and merely shortens the time it takes to pay off the loan.

However, if you implement a startegy called : “Recasting,” or “Re-amortization,” is available through some mortgage lenders and servicers. Here the interest rate and loan term stay the same.

An administrative fee of $150 or more for this service, though borrowers are not required to pay closing costs or submit to another credit check, because they are not asking for a new loan.

Recasting can be especially useful to recent buyers, for whom it makes little financial sense to refinance but who expect to receive a tax refund or other substantial money after closing on their property, like proceeds from a relative’s sale of property, stocks or other assets.

Many fine Lenders, Credit Union will work with you to improve their Customer Service.

Looking for homes in Bay Area, Silicon Valley click on the link below:

http://www.ruthandperry.com/

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