Some people complain about what is, or may be, done for homeowners in trouble. While worrying about someone else getting "theirs" unfairly, don't forget to look at what you can get yourself. If you qualify under good old fashion lending practices, you should be able to get rates @ around 5.0% for a 30 year loan. Like a lot of things rates are very volatile right now, so if this is something worthwhile for your circumstances don’t put it off.

If you have a $150,000 Mortgage financed at 7.5% the payments for principal and interest are $1,048.82 per month.

Let’s say you refinance that $150,000. You would ADD approximately $3,500 in closing costs to your balance and then amortize it at present rate of 5.0%. This gives you payments of $842.02. That means that the $3,500 of closing would pay for itself in a little less than 16 months. From that point forward you would have an extra $224.80 per month in your pocket. Of course you have to plan to be in the home longer than those 16 months, but everthing after that is gravy.

There may be even more advantages to refinancing, but I tried to keep this as simple as possible for illustrative purposes. Don’t forget to check with your accountant for any additional tax advantages.

Don’t make the mistake of adding “pre-paid” items into this scenario. Pre-paid items are “escrow” expenses, such as taxes and insurance. You presently have an escrow account and will be reimbursed for that account when you close. A new loan may require different values but in the long run this is just an account that is “your” money but managed by the mortgage company. A loan officer can show you which items are “prepaid items” and which ones are actually closing costs if you are uncertain.

Think of all of the things that you can do with an extra $200 per month. Even better opt for a shorter loan period with the same payment amount and build more equity value into your “home” saving account. Or if you have student loans, that are historically variable rate loans add their balance to your home loan and stabilize what you pay. There are so many OPPURTUNITIES for homeowners that fall under conventional lending guidelines.

So take you eye off of what you may perceive as someone unjustly getting “undeserved” assistance. Now is a WONDERFUL time for anyone who has always played by the rules. Take the opportunity to lock into these unbelievable FIXED RATES (NEVER, NEVER EVER THINK ABOUT A VARIABLE RATE!).

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