100 Tips for 2011
Holden Lewis
mortgage
10 tips to snag a mortgage loan in 2011

Tip 5Don't reset the calendar to 30 years 

When refinancing a 30-year mortgage loan, many borrowers restart from the beginning, scheduling the payments so they pay off the loan in 30 years. You don't have to do it that way. When you refinance a 30-year loan that you've had for five years, pay off the new loan in 25 years. Just ask the lender to amortize the loan for the remaining period of the old loan.

Bankrate.com's mortgage payoff calculator can help.

Tip 6Consider a no-closing-cost refi 

You're fortunate enough to have positive equity, but you don't have a lot of cash lying around. If you think that means you can't refinance, think again. You might be able to refinance the mortgage loan yet pay little out of pocket in a no-closing-costs refi.

The lender doesn't eat the closing costs out of a sense of generosity. After all, we are talking about a bank. With a no-closing-cost loan, the bank charges a slightly higher rate. You end up paying closing costs over time, instead of all at once.

Tip 7Small down payment? See the feds 
Most lenders require borrowers to have down payments of at least 10 percent of the home's price. In the case of refinances, lenders want borrowers to have at least 10 percent equity. That leaves out a lot of borrowers and refinancers. But there are options for people without much savings or equity.

For borrowers with good credit, the FHA requires a down payment (or equity) of 3.5 percent.

The Department of Agriculture's rural development program guarantees mortgage loans with zero down payment. Those loans are limited to designated rural areas. The Department of Veterans Affairs offers zero-down mortgages for qualified veterans.

Tip 8Small loan? Act early 
This tip is based on the Dodd-Frank Wall Street Reform and Consumer Protection Act and concerns mortgage loans of a relatively small amount of less than $100,000.

New restrictions on how loan officers are paid go into effect April 1, 2011. The law forbids lenders from basing loan officer compensation on interest rates or other loan terms. Essentially, a broker or loan officer will be able to earn more money only by lending more money. As an unintended consequence, loan officers are likely to chase bigger loans, and they won't want to spend as much time working on smaller loans. For borrowers getting small mortgages, customer service could suffer.

Some loan officers and brokers will be conscientious and will treat customers equally, regardless of loan size. But keep the regulation in mind.

Tip 9Make an extra payment any time of the year 
You've heard that making an extra mortgage payment at the end of each year will shorten the repayment time. That's true. But the extra payment doesn't have to come at year's end. An extra payment is effective any time of the year -- the important thing is to pay it consistently.

If money is tight during holiday season, maybe it would feel less painful to make the extra payment after receiving a tax refund, or after an annual bonus, or at some other time of year.

Bankrate's mortgage calculator lets you see how many years you'll reduce the payoff time by making consistent extra payments.

Tip 10Behind on your house payments? See a counselor 
Delinquent homeowners who receive HUD-certified foreclosure counseling are more likely to keep their houses and not lose them to foreclosure, according to a study commissioned by NeighborWorks America, a national network of more than 240 community development and affordable housing organizations, based in Washington, D.C. When late borrowers get counseling, they are more likely to get a mortgage modification and their payments are reduced more.

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