Help with Mortgage Loan Info.?
Answers:
The great thing is that you realize that you do not understand and that you are getting advice and help instead of sticking your head in the sand.
First thing to do is to realize that you don't have to "fix your credit" to solve your problem. For sure you need to get out of that ARM. Make out your budget to see what you can actually afford as a payment. The key word is afford not what you can pay. Your payment should be no more than 25% of your take home pay. Any more than that and you start making life rough for yourself. Next find someone at your loan office, bank, credit union that will help you understand what is going on and how to really get a mortgage other than just credit score lending. Don't be afraid to ask until you understand.
What you need is a fully ammoritizing fixed rate loan. That is just gibberish for a standard loan that pays out with payments and a interest rate that will not change. No balloons, no interest only, no ARMs.
If you can afford the new payment (less than 1/4 of your take home pay) than you will probably have to refinance your house to get into the new loan.
You may be a part of the sub-prime mortgage mess, but that's not what you should worry about. You should just worry about meeting the terms of your loan, regardless of anything else. If you're successful in fixing your credit history, you should just be able to refinance when the interest rate resets. Try to save up some money for a sizable down payment, as that will make it easier to refinance and may get you a better rate. But in any case, the rate will be higher than what you're paying now, so plan for it.
Check something like http://www.interest.com for current rates (those assume very good credit), and play with mortgage calculators (e.g. http://mortgages.interest.com/content/ca... ).
It really depends on your score, and if you were late in the last 12months. Normally you can do FHA and have a lower rate then 7.325.
If you would like to fix your credit..then check out my profile to fix it for free!
Here's an Idea, call your mortgage company.
You might be part of the sub-prime mess but if you are making your payments on time you are not in danger. The loans that the sub-primes have that caused the problems are the loans in default. Your loan may well be sold to another company but that will not effect you. I would take inventory of what increase in rates you can expect and determine if that is within your financial means. Since you are trying to fix your credit, refinancing is probably a bad option and if you financed within a few years, you probably shouldn't do it because of the closing costs. I would suggest that you apply for another loan, via the internet just to see what happens. You should be able to get a quote for free at the link below.
Work fast on that credit and remorgage your home for the best rate of refinance. Allot of folks don't know they can re-morgage their home and that gives you the lowest rate. You are not asking for more money, just trying to get a better interest rate therefor, there should not be any problem with your bank. Ask another lender if there is a [roblem. most good banks will work with you as long as you aren't asking for more money.
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