November 1: MHA Loans

With the interest rates being so low these days, my wife and I looked into refinancing our mortgage. Heck, even if we could save a couple hundred dollars a month it would be well worth it. So, I made the call today...just as an information-gathering effort. Unfortunately, the plummeting housing values didn't help much and a traditional FHA loan didn't offer us much in the way of savings. So, the mortgage rep to whom I was speaking to suggested a MHA loan might be the way for us to go. He explained what such a loan could do for us, and I kindly thanked him for both the information and his generosity (as he was actually pretty straightforward with everything). Then, I made a beeline to the Internet to research MHA loans; as I certainly wasn't going to make any investment in something I know nothing about. Despite what the Mortgage Rep said. MHA loans are part of the Obama Administration's "Home Affordable Modification Program" focused on helping struggling homeowners keep their homes. The goal is to reduce the interest rate or extend the mortgage term to make payments more affordable if someone has lost their job or perhaps has extensive bills that are impacting his/her ability to pay their mortgage. Of course, I'm thinking right away, "well, we don't really fall into that category, so why did the Mortgage guy suggest it?" What I didn't realize is that the legislation includes a provision for refinancing; a component specifically targeting individuals who are making their payments but who are not able to get a lower interest rate due to the loss of equity in their home due to the low-value housing market. We're considering it as an option, but we haven't quite made a final decision yet. Still can't shake that feeling that, despite all of the good things I've read about MHA loans, somehow the mortgage company is still going to screw us.