How to Get a Loan and Not Worry about Foreclosure

With all the foreclosure problems and people behind on payments, it's hard to not think about foreclosure when you are getting a new loan. It's always frightening when you are signing mortgage or loan papers, because it's a long term commitment and in many cases, it might be a little more than you can actually afford.

Many people agree to a new loan when it's not affordable, because they tell themselves that they will cut their expenses in other areas. They think they will eat out less, or not go shopping as much, just to make the new payment affordable. The truth is, cut backs like these are not realistic. People are still going to go shopping and they are still going to go out to eat.

A better plan is to increase your income, or to find a loan that can make the payment more affordable. By shopping around for a new loan, you can find the best interest rate and the lowest fees. Many people don't realize this, but a better interest rate and lower fees can reduce your monthly payment by $100's.

Using a home mortgage is a good example. Every lender has a different set of fees and offers a different interest rate and term. Without shopping around, you may think you are getting a good deal, but in reality, you could save thousands of dollars per yes.

Example – let’s assume you are getting a $250,000, 30 year mortgage.

Lender A – If lender A offers you a 5.75% rate has 3% in closing/broker fees, your payment would be about $1,500.

Lender B – Lender B has a special rate of 5.25% and charges a more reasonable rate of 1.5% in closing fees, which makes the monthly payment about $1,400.

The difference between both lenders does not seem much different, but over the life of the loan, lender B would save the home owner $36,000! That difference of $100 each month can really add up and it could cause the borrower to miss a payment at some point in the future. You would be surprised how many people could stay out of foreclosure if their mortgage payment were only $100 less.

No matter what type of loan you are looking for it's always best to shop around and find the best deal, but make sure you look at more than just the interest rate. In many cases, you could get a lower rate, but still end up paying more because of the fees that are charged on the loan.

When you are comparing two mortgage, make sure you look at the actually APR, not just the quoted interest rate. This will include all the fees and show you the true cost of the mortgage. This can be found on the Truth In Lending Statement that is required for all mortgages.

If you already have a mortgage and feel like you've been taken advantage of, or if you have had a hardship that is affecting your ability to repay your mortgage, then a loan modification can be used to lower your interest rate. This is when your existing lender modifies your mortgage interest rate or term to make it more affordable. This process has become very popular in the recent years, and should be easily negotiated with your lender.

Use our website to get a quote on a new loan, or visit http://www.foreclosurefish.com to learn more about foreclosure and loan modification.