If you are about to be foreclosed upon or have ever been through foreclosure you may feel that your life is totally ruined and that you will never be able to have the chance to own your own home again. I will do my best to cheer you up so that you are not so pessimistic. As you will see it is possible to get back on your feet again and eventually get a mortgage after foreclosure and have a new home of your own again.

A very good friend of mine had to file bankruptcy about four years ago and with that several homes that she owned were foreclosed upon. She made the mistake of having a business that was not incorporated so that her assets would be separate from her business. When her business failed she lost everything. She was inconsolable and vowed that she would never risk going through a foreclosure again proclaiming that she would be a renter for the rest of her life.

After a period of time she had a change of heart and I’m proud to report that she is the owner of her own piece of the American dream. Yes that’s correct, she owns her own home again. I like to think that I had something to do with helping her change her mind about becoming a renter for life to becoming an owner of her own home. It was really a rather simple question on my part that got her thinking about having another mortgage after foreclosure.

I simply asked her how she planned to pay for a rental unit when she was in her 70s and 80s. One of the main benefits of owning your own home is that at the end of the 30 year fixed rate term you own your home outright and thus you get to live there rent free. I also told her that she should not waste her money paying for rent at the same amount per month on a rental property when she could be spending that money building equity in her own home. Essentially, as a renter you are paying off someone else’s mortgage.

I’m happy to say that my simple logic made sense to a very smart woman who was simply frightened by what she had just been through and did not want to risk that type of lost again. Once she realized that she did want to own her own home again she had to do some major overhaul of her financial situation so that she could get approved for another home loan. She made some radical changes in her spending and saving habits.

She was more cautious with her spending and made sure she analyzed and questioned whenever she needed to make a purchase. As a result, she was able to find areas where she could cut back on her spending and thus improve her savings rate significantly. However, what she learned that was most important is that she could affect change by taking action. She was not held hostage to her old thinking of being afraid.

You can be just like my friend and get another mortgage after foreclosure. You simply need to start taking positive measures to correct your financial deficits and eventually your credit scores will rise as a result. Once you get your credit scores back into the good range you will be able to get into a new mortgage again. And once you get that new mortgage again you’ll be on your way to someday living rent-free!

By dealing with the following costs in a wise manner, refinancing your mortgage should be more effective and help you save a higher amount of your premiums on your monthly payments. It’s important to have a good loan structure when you’re refinancing your mortgage. You also want to avoid private mortgage insurance and get a loan with a lower interest rate so you will be effectively saving money on a monthly basis.

1. Mortgage Refinance Tips – Close Down Inactive Credit Cards

Credit cards can have a significant impact on your availability to get a mortgage refinance loan. If you purposefully close down inactive card accounts you will see an improvement in your credit score allowing you to have the opportunity to get lower interest rates on your refinance.

It’s important that you send written notification to your credit card company when you close your account. This documentation may be necessary to produce at a later point in time. You should then check your credit reports in approximately 30 days to make sure they indicate that you have closed your account by “Customer’s Request”.

You need to make sure that your file indicates that you closed your account on your own volition and not that it was closed by the credit card company. You do not want your credit report to have any inaccurate information that could jeopardize your hopes of getting a loan.

2. Mortgage Refinance Tips – PMI Can Be An Added Cost

PMI otherwise known as Private Mortgage Insurance can have a negative impact if your refinance is done improperly. Statistics show that 30% of individuals who refinance their home use the proceeds of the equity in their house as cash to make home improvements or to pay for other large bills.

Paying off credit cards or making home improvements is wise. However, if you were to borrow more than 80% of the equity in your home you would have to pay for private mortgage insurance and this costs many hundreds of dollars yearly.

3. Mortgage Refinance Tips – Short-Term Loans

You may want to consider a short-term mortgage loan because you’re likely to get a lower interest rate than that of a long-term loan. This will result in a lower monthly mortgage payment and a shorter length of payment term.

4. Mortgage Refinance Tips – Question The Lender About Fees

All home mortgages that are refinanced include some form of fees. These fees are not often discussed openly. They have different names such as: administrative fees, document preparation fees, courier fees, etc. Lenders are required by law to tell you the fees of the refinance loan within three business days of filing a mortgage application.

Here is some sage advice: when you are shopping different lending companies ask all the lenders to give you a list of all their fees upfront. Once you have all this information you can then add these fees to the interest rates of each specific lender’s mortgage loan. You might be surprised to find that the cheapest offer does not necessarily come with the lowest interest rate.

5. Mortgage Refinance Tips – Paying For Points

If you intend to live in your present residence for many years to come, you can likely save a large amount of money by paying points in return for getting a lower interest rate. Essentially, you are paying all the fees upfront, which guarantees that your interest rate will be lower throughout the length of your loan term.

If you have a relatively low income and do not believe that you can own a house, I suggest you think again. Low income mortgage loans are available to certain individuals who want to own a home but don’t have a standard size income. Different private lenders provide these types of low income loans because they are insured against loss to the lenders who make these loans possible. If a low income borrower were to default on his or her loan the insurance company will protect the originator of the loan.

Three types of low income mortgage loans include the following: 1) FHA or Federal Housing Administration loans, 2) VA or Veterans Affairs loans and 3) RHA or Rural Housing Authority loans.

FHA loans are backed by HUD or the Housing and Urban Development department that helps individuals with low incomes qualify for mortgage loans. Because the FHA guarantees these loans you can usually get a good interest rate on this particular type of loan.

To qualify for a low income loan by the FHA a borrower must have a reliable source of income and a good track record of paying their bills in a timely manner. They must also have a low debt to income ratio. One criterion is that their monthly mortgage payments must not exceed 31% of their gross income. When you include non-housing expenses plus the mortgage payment these expenses cannot be more than 43% of the income. A 3% down payment is needed to get the loan but it is okay to get this money in the form of a gift from either family or friends.

If you have served in the military the best low income loan can be found with the VA. National Guard members in addition to regular US armed services personnel are eligible for low income mortgage loans as long as they have served their time fully and received an honorable discharge.

Again, the VA does not make mortgage loans. They simply insure the loans that are made by private lenders in case the borrower happens to default on the loan. Veterans are provided special privileges in that they can get up to 100% financing on the price of the home that they want to purchase as long as they can show that they have the income and stability to pay for the loan.

The final source of low income loans is through the RHA, which happens to be part of the US Department of Agriculture or USDA. In this case the RHA is a governmental organization that originates loans for qualified buyers. The primary qualification for this type of loan is that you must live in a farming region or rural area and prove that you are capable of making payments on time in addition to having a good credit rating.

The resources that have been listed in this article should give hope to those of you who are seeking the American dream but don’t have a big income to qualify for a standard rate loan. As long as you meet the minimum requirements in these loan packages you should still be able to find your slice of the American pie even though it may be a smaller slice.