New Housing Crisis On The Horizon: HELOC Repayment

New Housing Crisis On The Horizon: HELOC Repayment

Short Sale Solutions

Now that the mortgage crisis is in the rearview mirror, there is a new problem that lies ahead… repayment of the Home Equity Line of Credit (HELOC). The interest only HELOCS that were taken out about a decade ago are now about to reach the 10-year point where borrowers will need to begin repaying the principal amount that is owed as well as interest.

Now that the HELOCS are on the horizon, homeowners also have to be aware that the FED may increase the rates. “Higher rates, plus new principal payments could easily double the monthly cost of those loans. And many of those home-owners are still under-water, owing more than the house is worth — thus making refinancing almost impossible.”
“If you have a home equity line of credit upon which you have been making interest-only payments, this is the time to contact your lender about the possibility of refinancing or at least adjusting the coming HELOC payment. This time around, lenders might be more flexible about lowering that payment by adjusting the amortization schedule to longer than 10 years. ”

Some helpful strategies to help you with your situation are the following:

  • HARP (Home Affordable Refinancing Program)
  • HAMP (Home Affordable Modification Program)
  • Home Affordable Second Lien Modification Program
  • FHA Short Refinance
  • Short Sale

 

Source: HuffingtonPost.com

New Housing Crisis On The Horizon: HELOC Repayment

Short Sale Solutions

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