How to Shave Off 8 Years from Your Mortgage

A Facebook fan asked me the following question:

Question: While I suspect that you cannot endorse or disparage a particular product, I was wondering of you can offer your thoughts on programs, offered for a fee, that claim to show you how to pay off your mortgage in 8 – 11 years. Generally speaking are these programs legitimate?

Answer: You are correct that I don’t want to bash any particular financial product or service without knowing the specifics of what they’re offering.

However, I can tell you this: If you have a home and you want to pay off the mortgage quicker than 30 years, you can indeed shave off about 8 years from that mortgage just by making one extra payment each year. You really don’t need to pay a fee for this to some third party. You can simply write an extra check to your lender and write a letter to them indicating that you want this additional check to be applied toward your principal balance. It’s a good idea to also send along one of your monthly statements, and to write “Pay toward principal balance” on the check itself. Then keep making your other normally scheduled payments. In addition to outside firms or third parties, your own mortgage company might also offer to set up extra payment arrangements for a fee. But again, you can readily do this on your own without incurring additional costs.

Hope this info helps.

Are Mortgage Companies Legitimate?

When in doubt, always do a little bit of homework or research on the firm.

A Facebook fan has asked whether the National Mortgage Help Center is a legitimate company. I’ve never had any dealings with National Mortgage Help Center, nor have I heard anything about them from consumers or in the media. So I can’t really comment with any authority or insight into whether this particular company is “legitimate” or not. What I can say is that if your brother is about to use this company – and he has any reservations or doubts about doing so – he should take normal precautions and investigate the company’s track record. Do a Better Business Bureau search on it. Google the company’s name and see if there are any serious reports of or complaints or accusations of wrongdoing. It could very well be squeaky clean and highly reputable. He’ll never know unless he does at least a little bit of homework or research on the firm.

As for you, if you ever face being delinquent on your home loan (i.e. 30 days or more late), then you should seriously consider re-organizing your finances, establishing a new household budget, and perhaps getting government assistance if your home loan is unaffordable.

For both you and your brother, President Obama’s home rescue plan may offer some relief. It’s designed to help cash-strapped homeowners refinance their loans or get loan modifications. You can learn more about this housing program at www.MakingHomeAffordable.gov. Also, if any lenders or mortgage industry officials say they’ll help you use the government’s program for a fee, simply say: “Thanks, but no thanks.” The government’s program is free of charge, and you can readily do it yourself at no cost.

Mortgages, Homeownership and Foreclosure Relief

By Lynnette Khalfani-Cox, The Money Coach

President Barack Obama has made no secret of the fact that he wants to bring the cost of buying and owning a home down – way down – as a way to jumpstart the economy.

Hope for first-timers and existing home owners

As part of the $885 billion economic recovery plan now being heralded by the Obama administration, new home buyers could get mortgages with interest rates as low as 4%. It’s possible the plan may even extend to existing homeowners who would be able to refinance their current mortgages, also benefiting from lower rates.

For their part, GOP lawmakers are pushing to double an existing home buyers’ tax credit to $15,000, up from the current level of $7,500. Republican leaders even want the home buyers’ tax credit to be made available to all buyers, not just first-time homeowners. (See L.A. Times piece.)

The House has already passed its version of the economic stimulus package; the Senate is currently weighing the bill. While nothing is certain, what is apparent at this point is that there is broad bipartisan support to attack the housing problem. That means real reform is likely to occur this year concerning lower mortgage rates and bigger tax credits for owning real estate.

Fannie and Freddie Extensions

Speaking of owning property, are you struggling with a mortgage you can’t afford? If your bank sold your loan to Fannie Mae or Freddie Mac, you might get some relief from these two agencies, which are the biggest holders of mortgages in the country.

Fannie and Freddie recently opted to extend until March 1^st a foreclosure moratorium on loans it holds. So if you’re behind on your house note, and your original bank or lender sold off your mortgage to Fannie or Freddie, you can breathe a sigh of relief in knowing that those agencies won’t be sending a sheriff to you door anytime soon.

As an added bonus: Fannie and Freddie have launched a new rental option plan to let qualified owner-occupants and tenants have leases so they can rent properties on a month-to-month basis after foreclosures.