Before going into the details as to whether or not one should go for mortgage life insurance, let’s check out what it is all about. Well, to define it in simple words, mortgage protection life insurance is a policy which will help your heirs to pay off the home loan after your death (if it’s not fully paid off).

Once you’ve taken a mortgage, you will get an offer to buy an insurance policy from your lender or an insurance company who is associated with him. In my opinion, it doesn’t make much sense to go for mortgage life insurance. Here are some of the reasons why you shouldn’t go for it:

Insurance may not cover everything - Your mortgage life insurance may only help your heirs to pay off the loan if you die from an accident. If you die from illness, it may not help your heirs in paying off the home loan. Thus, your family will face hardship in saving the property from the lender.
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Mortgage interest rates are at record low and you must be planning to refinance your mortgage to take advantage of the low rates. With a good credit score and stable financial situation, you can definitely go ahead and refinance your properties. But again, you should also have a clear idea about the worth of the property. If you do not have equity in the property, lenders won’t refinance your property.

5 Things to keep in mind before you refinance:

• Interest rates: You should refinance your property if it helps you in saving your money. Check out the interest rate on your current loan and compare it with the rate that you would receive after refinancing. This will give you an idea whether you would be saving money or not.

• Refinance Underwater Mortgage: If your mortgage is underwater (i.e. if the worth of the property is lower than the mortgage that you owe), try to assess how far underwater it is. With the introduction of the Home Affordable Refinance program, you may be able to refinance if your loan is not more than the 105% value of the property.

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This year borrowers will be receiving special tax breaks for refinancing. Most of us overlook the tax breaks available when we refinance our mortgage. You can get special tax breaks on the following:

PMI premiums: Private mortgage insurance or PMI comes into the play when you are unable to pay 20% equity in your home as down-payment. If you have taken out a loan in 2007 or later, you’ll now be able to deduct premiums for loans. The best part is that, this rule applies not only for private mortgage insurance but also for premiums paid for mortgage insurance provided by the Department of Veterans Affairs, the FHA and the Rural Housing Service.

Suppose you took out a loan before 1st January, 2007. You must be thinking that you won’t qualify for the tax breaks. However, if you refinance the loan now, you can take advantage of the tax breaks. But, it should be noted that this deduction is available only to taxpayers who itemize their deductions. The write-off will expire at the end of 2010.

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If you are upside down on your mortgage and don’t know how to handle the situation, then the Home Affordable Refinance can help your cause. This is a new program introduced by the Obama Government to assist millions of homeowners who can’t refinance their property due to loss of equity.

Home Affordable Refinance Program in brief:
It is a program which lets you to refinance your existing mortgage into a fixed rate loan for 30 years or 15 years even though you owe more on your mortgage than your home is worth. While you refinance the mortgage, you can take advantage of the current rates prevailing in the market.

Eligibility for Home Affordable Refinance:

• You must be current on their mortgage payments. Also, your mortgage should have been originated before January 1, 2009.
• The 1st mortgage on your home should not exceed 105% of the present market value of the property.
• Your loan should be backed by Fannie Mae or Freddie Mac. Homeowners with jumbo loans do not qualify for this program.
• You can take advantage of this program only for your primary residence.
• You should have sufficient income to pay off the loan according to the new plan given by the lender.

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Hello everyone,

It’s a pleasure for me to announce that nearly 70,000 discussions have taken place in MortgageFit Forums till date. Moreover, the community has also crossed 32,500 members!!! Though there are various categories in our forums, yet discussions on loan modification, bankruptcy, refinance and first time home buyer’s tax credit are gaining importance in recent times.

With the low interest rates prevailing in the market, the borrowers want to take advantage of it by refinancing their existing loans. The low rates and first time homebuyer’s tax credit have also encouraged people to buy a home of their own. Perhaps this is why discussions on such issues are getting quite common these days.

With new plans announced by President Obama, lenders are offering loan modification as a solution to borrowers who have defaulted on their loans. I guess, loan modification has become popular because people have realized that it would help them in saving their property when they are in mortgage problems. That’s the reason why discussions on loan modification have increased in number recently.

Experts participating in this community are doing their best to guide the common people so that they can take the right step in solving mortgage and related issues. So, if you’re in mortgage problem or you need to discuss a financial issue, feel free to speak about it in our forums.  Our members and experts will come forward to help you with their real life experiences on such issues.

So, let’s hope… our forum discussions will help resolve your mortgage/financial problems. Here’s wishing that you get over your problems asap and lead a tension-free life.