Government offers mortgage help

New government programs may be good news for homeowners who want to refinance or obtain a loan modification.

By Marcie Geffner - LendingTree.com

Homeowners who want to refinance their mortgage or need help to obtain a loan modification may be cheered by several recent federal government announcements.

The Federal Reserve said it will keep the benchmark federal funds rate at zero to 0.25 percent. The low target rate is good news for borrowers who have an adjustable-rate mortgage (ARM) or want to refinance, even though the Fed doesn't directly control the interest rates that borrowers pay on their loans.

These low interest rates may not be fleeting. The Fed said it expects "exceptionally low" rates to continue for "an extended period" due to current economic conditions. That's good news for buyers who need time to shop for a home and a loan.

The Fed also reiterated its plans to buy up to $1.25 trillion of mortgage-backed securities, $300 billion of Treasury securities and $200 billion of other debt instruments this year. These purchases are intended to "support to mortgage lending and housing markets," among other objectives, the Fed said in its statement.

Second loans to be modified
Meanwhile, the U.S. Treasury announced a new Second Lien Program that will lower the payment on some homeowners' second mortgages. This program is intended to help homeowners who are in danger of foreclosure qualify for a loan modification through the Making Home Affordable program. Second mortgages can create significant challenges in these situations.

The Making Home Affordable program also has a refinance component that's open to borrowers whose loan is owned or guaranteed by Fannie Mae or Freddie Mac. Through this program, homeowners may be able to refinance even if they owe slightly more than their home is worth.

A dozen or so lenders have signed formal agreements to offer the Making Home Affordable programs.

Loan principal may be reduced
The Treasury also announced a program that would require loan servicers to offer the existing Hope for Homeowners program to more borrowers who apply for the Home Affordable Modification program. Hope for Homeowners is a government program that helps to create equity for homeowners, so they can refinance into a new loan that's guaranteed by the Federal Housing Administration (FHA).

Home buyers score tax credit
For home buyers, the federal government offers an $8,000 tax credit. The credit can be taken by taxpayers who purchase a home between Jan. 1, 2009, and Nov. 30, 2009, and have not owned a home in the last three years. The credit does not have to be repaid and can be claimed on the taxpayer's 2008 or 2009 tax return. The credit is subject to income limits and is phased out for higher-income earners.

Getting a Mortgage Without Credit

By Nik Levesque

We all probably know that getting a mortgage with little or even no credit is pretty much next to impossible. Well, actually it isn't really. You just have to know a few key things and keep these things in mind when going to a bank or broker for a mortgage. Who knows, owning your own home may be a definite possibility.

The first thing to know is that nothing really changes with the procedure of applying for a mortgage with bad or no credit. You still go to the same place that you would need to go for any other mortgage.

When you apply for a bad or no credit home loan you will be asked to prove proof of employment (not to mention the fact that you have been at the same job for a reasonable amount of time), your credit history, the amount of debt that you currently have and how much of a down payment on the property that you have available.

Another possible solution can be that you might be able to look at and get is an FHA loan. These are great for many people who are trying to rebuild their credit after various problems and issues with money that they may have had in the past.

Finally, if you can not qualify for either the bad or no credit mortgage and the FHA loan, you can look at finding a friend or relative willing to vouch for you by co signing on the loan. This will make he or she responsible for paying back the loan as well as yourself. So basically, if you default on payments, they can go after the co-signer for the money.

Getting a mortgage can be a very complicated process if you are with a less than perfect credit rating. However, owning a home in the end makes it worth it!

When you are looking for a mortgage and need to know what your payments will be, you can always check a mortgage payment calculator

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