Mortgage loans with adjustable interest rates abound in the market. Usually, these loans start out with low interest which is why many borrowers prefer to get them over fixed-interest loans. But the low interest rate can suddenly change within a few months after signing the loan. After a year or two, you could be facing a loan with expensive interest rates that are way out of your budget. In fact, most borrowers end up with foreclosure because they failed to keep up with their payments.
Therefore, is it possible to freeze the interest rate of your loan? What is a rate freeze and what can it do for you? Who are qualified to get a freeze rate and how do you apply for a freeze interest rate?
What is a rate freeze?
Last December 6, 2007, President Bush introduced the interest rate freeze in the hope that it will help more people avoid foreclosure, complete their loans' terms and keep their homes. Rate freeze are primarily offered for borrowers with subprime loans.
Imagine how much more you have to pay if the interest rate of your loan would increase by 5% or more within the next 5 years. If you have a subprime home loan or a personal loan, freezing the interest rate of your loan for at least five years can save you a huge amount with your payments. Surely, you'll be interested to know more about rate freeze.
Who Qualifies
Nevertheless, not everyone with a subprime mortgage loan can qualify for the interest rate freeze. According to the Center for Responsible Lending, only 118,000 subprime homeowners will be able to avail of the freeze rate compared to the 3.7 million consumers with subprime mortgage loans.
Who qualifies? Under this bill, there are standard factors for one to qualify for the rate freeze. These are :
- the home involved is their residential home;
- the borrower has been able to keep up with his payments while the "teaser rate" is applied;
- it is a subprime loan or the borrower has a FICO score below 660;
- it has to be a mortgage loan obtained from Jan 1,2005 to July 31,2007 only;
- the borrower was unable to submit recent payments because the interest was adjusted to a higher rate;
- is not more than 60 days past due of his payments within the last 12 months;
- is not more than 30 days past due after the interest rate has been adjusted;
To know whether you qualify for a freeze or not, a borrower must contact HOPE- the nonprofit group who is currently in charge of reviewing applicants for the freeze rate. This group is composed of representatives from various, lenders, credit counseling agencies, investors, and other financial organizations. If you're interested in applying for a rate freeze, you can call 1-888-995-HOPE.
But what if you don't qualify for the interest rate freeze? Getting in touch with HOPE or a government accredited counseling agency is one way to find solution to the problem. Even if you are not eligible for the rate freeze, taking action is better than trying to run away from your debts. If you speak with your mortgage lending company with regards to your financial situation immediately, your lender will be most willing to help you come up with a solution to your problem.
Therefore, is it possible to freeze the interest rate of your loan? What is a rate freeze and what can it do for you? Who are qualified to get a freeze rate and how do you apply for a freeze interest rate?
What is a rate freeze?
Last December 6, 2007, President Bush introduced the interest rate freeze in the hope that it will help more people avoid foreclosure, complete their loans' terms and keep their homes. Rate freeze are primarily offered for borrowers with subprime loans.
Imagine how much more you have to pay if the interest rate of your loan would increase by 5% or more within the next 5 years. If you have a subprime home loan or a personal loan, freezing the interest rate of your loan for at least five years can save you a huge amount with your payments. Surely, you'll be interested to know more about rate freeze.
Who Qualifies
Nevertheless, not everyone with a subprime mortgage loan can qualify for the interest rate freeze. According to the Center for Responsible Lending, only 118,000 subprime homeowners will be able to avail of the freeze rate compared to the 3.7 million consumers with subprime mortgage loans.
Who qualifies? Under this bill, there are standard factors for one to qualify for the rate freeze. These are :
- the home involved is their residential home;
- the borrower has been able to keep up with his payments while the "teaser rate" is applied;
- it is a subprime loan or the borrower has a FICO score below 660;
- it has to be a mortgage loan obtained from Jan 1,2005 to July 31,2007 only;
- the borrower was unable to submit recent payments because the interest was adjusted to a higher rate;
- is not more than 60 days past due of his payments within the last 12 months;
- is not more than 30 days past due after the interest rate has been adjusted;
To know whether you qualify for a freeze or not, a borrower must contact HOPE- the nonprofit group who is currently in charge of reviewing applicants for the freeze rate. This group is composed of representatives from various, lenders, credit counseling agencies, investors, and other financial organizations. If you're interested in applying for a rate freeze, you can call 1-888-995-HOPE.
But what if you don't qualify for the interest rate freeze? Getting in touch with HOPE or a government accredited counseling agency is one way to find solution to the problem. Even if you are not eligible for the rate freeze, taking action is better than trying to run away from your debts. If you speak with your mortgage lending company with regards to your financial situation immediately, your lender will be most willing to help you come up with a solution to your problem.
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