Home Mortgage and Refinancing » mortgage refinancing

Home Mortgage Loan Refinancing – Frequently Asked Questions

Mortgage Maven — Fri, 19 Nov 2010 22:07:08 +0000

Money tight? Obtaining a house isn’t that simple, but these days keeping your home can be even harder. Your current mortgage might have been perfect a few years back, but times have changed and now you need to consider whether to refinance the existing mortgage.

Countless homeowners now face the exact same dilemma. Do not wait until you are out of choices. Prior to any further action, you should spend some time time considering these frequently asked questions about mortgage loan refinancing.

1. Why should I refinance my house?

Maybe you would like to change an adjustable rate mortgage into the cheapest fixed rate mortgage possible. Or maybe you are paying for both a first mortgage and a second mortgage and it’s difficult to pay both, or you have high credit card debt and are faced with either refinancing or seeking credit card debt forgiveness. Or if you are currently paying private home loan insurance (PMI) but your home has appreciated enough that you now have 20% equity, refinancing may keep you from having to pay PMI.

In any of these cases, refinancing may be a good choice.

2. How would the monthly mortgage payments be decided?

Your monthly mortgage payments will be decided based on the amount financed, the rate of interest, and how many years the loan is financed over. Be careful if considering an adjustable rate mortgage (ARM), as then your monthly payments could go up if interest rates go up. With interest rates at historic lows, it is highly likely your payments may go up if you choose an ARM rather than a low-interest fixed rate mortgage.

3. Should I refinance now?

Any choice to refinance your home loan ought to depend on your financial needs and the rate of interest you are able to refinance at. If refinancing now will significantly decrease your monthly interest charges or the interest over the life of the loan, now may be a great time to refinance. Be sure to also consider how many years you have left on your existing home loan. If you only have a few years left before your house is paid off, now might not be the wisest time to refinance.

Prior to refinancing, it’s good to consult a number of home loan lenders. Think about what each can provide and which will provide the greatest benefits to you. Know the value of the property and the present trend within the real estate market in your area. These particulars are essential and should be weighed carefully when thinking about refinancing.

Refinance Mortgage Loans – Take Advantage of These Money Saving Tips

admin — Thu, 10 Sep 2009 18:08:07 +0000

It can actually be quite challenging to know when the time is right to refinance mortgage loans. It is a timing thing more than anything else. Get it right and you lock in very favorable interest rates which will save you thousands of dollars over the life of the loan. Get it wrong and you’re going to pay a lot more money than you need to.

To add to our financial stress we also have to deal with the fact that many lenders have greatly curtailed their activity due to the stressed economy. This is in fact the worst economic crisis we as a nation have faced since the Great Depression ended in the 1930s. Credit lines are much more difficult to come by now as compared to just a few years ago when it seemed as if anyone with a pulse could get a mortgage.

When considering mortgage loans it is vital that you take into account how much longer you plan on owning that property. All loan originations have fees that the lender charges. After all, they are in it to make money. Examples of these fees include attorney fees and appraisal fees. There can be more depending upon the lender.

You may, in fact, be able to obtain a new mortgage with an excellent interest rate that will save you plenty in your monthly mortgage payment. But that savings must be weighed against the cost of the refinancing process. A rule of thumb in the refinancing businesses is that staying in a refinanced home for ten years will make it a worthwhile option.

If however you are planning to own the property for less than 10 years then it may not be worth refinancing. Even though the interest rates will be lower, the fees to get the mortgage will have pretty much negated your savings. That is why it is so important to carefully plan these things out and seek your best options.

Taking these things into consideration when looking into refinancing your mortgage will help you make the best decision for your particular circumstances. You can find a mortgage calculator on line that will help you compare your different options. Using different loan amounts, interest rates and fees will give you some bottom line figures to work with.

There are, of course, two types of mortgages. There is the fixed rate mortgage that locks in your interest rate for the life of the loan which is usually 15 years or 30 years. And there is the adjustable rate mortgage (ARM) that typically begins with a very low interest rate but adjusts as the Federal Reserve Board of the United States resets rates.

If you are going to be selling your property in the not too distant future then perhaps an adjustable rate mortgage would be best. I must warn you to be careful. Many people are enticed by the low interest rates at the beginning of an adjustable rate mortgage but soon find that they can no more afford the payments as interest rates move higher.

Weighing all the factors is crucial to refinance mortgage loans to your benefit. Taking the time to evaluate various scenarios and different outcomes will guide your decision making process. You will want to decide whether or not to refinance based on the long term results not just the amount of your immediate monthly mortgage payment. The hidden costs may end up costing you more than you save.

Home Loan Modification vs Mortgage Refinancing

admin — Tue, 28 Jul 2009 16:31:10 +0000

During these difficult economic times, more people are losing their jobs and having a tough time making their mortgage payments. This has resulted in millions of foreclosures and millions of people on the verge of losing their homes. Fortunately, there are opportunities out there that can help homeowners stay in their homes. Two options are Home Loan Modification and Mortgage Refinancing. When considering these two options, it is important to understand their differences.

Home Loan Modification

Home Loan Modification is when a lender and mortgage holder change the terms of a mortgage by changing the amount of the monthly mortgage payments. The goal is to make payments more affordable for the homeowner. If a lender is owed money, they will often prefer modifying a home loan instead of advancing with a foreclosure as there are many fees associated with the process. Giving a mortgage holder the chance to bring the mortgage up to date and provide better terms is much easier and less expensive. Other benefits of a home loan modification include: it does not depend on a persons credit score, it usually results in a lower interest rate, and it allows lenders to get rid of a bad asset and sell the new loan on the open market. For many homeowners, refinancing is not an alternative. For homeowners who cannot make monthly payments or have recently lost their job, a home loan modification may be a good solution. A homeowner will have to provide proof to show that their current loan has put them in substantial financial difficulty.

Mortgage Refinancing

Mortgage Refinancing means the terms of an existing mortgage are withdrawn and a new mortgage is put in place that offers better rates and terms and conditions. You are actually paying off your existing mortgage with a new mortgage. The conditions and terms are negotiated by the lender and homeowner and they both agree to the new terms. The result is usually better terms and payments. The major difference from home loan modification is that mortgage refinancing will involve fees and penalties, and home loan modification does not have these fees. Mortgage refinancing involves paying such fees as title fees, escrow fees, lender fees, appraiser fees, and taxes. Most home owners refinance in order to lower their interest rate, to extend the life of their loan, or to pay off other debt. Lenders normally require that homeowners who are looking to refinance have a good credit score, equity in their home, and proof of job security.

Deciding which option is best often depends on the homeowners personal situation. There are advantages and disadvantages with each type of home loan. If you have built up a lot of equity in your home, you should consider refinancing. If you have a poor credit rating, you may want to consider a home loan modification. With the increase of mortgage defaults, homeowners should know there are options out there to save their home from foreclosure. It is just a matter of researching and choosing the best option that meets their particular needs.

What Do Home Appraisers Look For When Doing An Appraisal For A Mortgage Refinance

admin — Tue, 28 Jul 2009 13:53:52 +0000

When undergoing a mortgage refinance, one step in the process is acquiring an appraisal of your home. An appraisal is a written estimate of the market value of your property. Mortgage lenders will use an appraisal for a mortgage refinance to determine the amount one qualifies for the mortgage. The appraisal will also establish how much equity there is in a home. It gives an estimate of the price that can be obtained by selling the property. An appraisal is a necessary step when refinancing existing mortgage because it assures the lender or bank that the property will sell for at least the amount which they will be providing as a home loan. This protects them in the event of a mortgage default by ensuring they will get their money back if they have to repossess the house and sell it.

The mortgage lender will normally arrange for the appraisal. It often depends on the mortgage companys policy for obtaining appraisals. A home appraisal is different from a home inspection. Appraisers look for value in a home. Lenders need to know the home is worth what you want to borrow. The appraiser is a licensed professional that will do a market analysis of the sale price of a home. The appraisal will require a thorough inspection of your home inside and out. The appraiser will look for problems in the property

Appraisals generally include: evaluating the condition of your home, details of the property, a comparison of the property with other properties in the area, an evaluation of the real estate market in the area, the type of area where the property is located, and an estimate of how long it will take to sell. Although it may vary among appraisers, generally speaking, they take home sales within about a 1/4 mile within the last 4 – 6 months and average them per square foot. They then multiply that number by the square footage of the home being appraised.

The appraiser will assess the actual home. He or she will measure the outside of your home, look at the inside, take pictures of both the outside and inside and determine a market price for your home based on the most current previous sales of nearby homes. Such aspects that affect a home value include: kitchen, number of bedrooms, size of rooms, finished basement, new roof, number of bathrooms, new windows, and a solid foundation. They will also measure the property line to get the amount of square feet on the outside. They will then notify the lender or person who requested the appraisal. The lender uses all of the information to determine the amount of the refinance loan.

The appraisers assessment of a home is an extremely important part of refinancing a mortgage. It is important to inform the appraiser of any new additions such as a garage or patio deck. Before an appraiser arrives, make sure that you have all repairs completed that can affect the value of your home. Factors that can affect the value can include poor upkeep of the property and any damage to the home. Because of the low interest rates being offered by banks and other lenders, this is a great time for mortgage refinancing. Knowing what appraisers look at when assessing a home and neighborhood will increase the likelihood that you will get a great refinance loan.

Find The Best Deals With A Mortgage Calculator

admin — Tue, 28 Jul 2009 12:31:35 +0000

Have you ever wondered if what you know about UK mortgage calculators is accurate? Consider the following paragraphs and compare what you know to the latest info on mortgages.

UK mortgage calculators can help to work out the interest burden. Mortgage calculator results are supplied for estimating purposes only and should be verified by your lender of choice. Mortgage Calculator Pro is a quick and easy to use calculator for brokers, realtors, and home buyers. Within seconds, you will be able to calculate the monthly payment for a mortgage, car payment, credit card, or other types of fixed rate loans.

Lenders generally expect deposit of at least 15% or more in the current market, as normally the buy to let mortgage LTV allowed is a maximum of 85% and rental income of 125% of mortgage payments. So for example, if mortgage monthly payment is projected to be 300, the lender would want to see the property let at 375 at least. Lender’s attitudes vary, but they will usually lend you between 3 and 3.25 times your annual income before tax if you’re applying for a mortgage on your own. If you’re applying with somebody else, they will usually lend either between 3 and 3.25 times the main income plus the second income or 2.5 times the two incomes added together.

How can you put a limit on learning more? The next section may contain that one little bit of wisdom that changes everything.

Free mortgage calculators are a great home buying tool. You can use a mortgage calculator to determine the approximate monthly payment on a home loan. Free mortgage calculators online calculate the monthly payments and prints an amortization schedule. The calculator is a tool for people in the real estate market. Help you calculate figures related to the mortgage. Simply enter your data in the “input” section for the total amount of mortgage you are seeking, the length of term of the loan and the estimated interest rate you are paying. Paying off short term loans and credit cards with a mortgage could cost you more over the long term.

Interest rates are posted daily on many mortgage company websites. However, because of the variety of mortgage plans available, not all plans and all interest rates are posted, just the most common ones. Interest rates have been cut again and again to unprecedented lows. Property prices similarly continue to slide. Brokers are not bank managers, and are much easier to talk to. They make their money by offering mortgages, and you are therefore liable to get a good service, the best home loans, and walk out with a smile on your face after speaking to a broker than a bank manager! Brokers and bankers use this to help figure out your mortgage rates. You can check their math by doing it yourself.

Enter your mortgage amount, interest rate, amortization period (years it will take to repay mortgage) and payment frequency. Once you get your results, click on the amortization schedule button for each payment frequency. Enter your income, the monthly minimum payment on your debts and the amount of cash you can put toward a new home. You’ll need to choose an interest rate (the table to the right shows national averages) and estimate your credit rating. Enter the requested information and click “calculate now” to make out the results. The paying off feature, which permits you to create a customized paying back table for your loan, is below.

That’s the latest from the UK mortgage calculators authorities. Once you’re familiar with these ideas, you’ll be ready to move to the next level.

Why Reverse Mortgages Are Popular

admin — Wed, 22 Jul 2009 20:25:13 +0000

Reverse mortgages are becoming more and more popular these days, but are they scams or are they legitimate? Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay you pay the mortgage payments? A reverse mortgage can be very useful for the seniors. It is because most of the seniors do not receive income anymore from their work. Reverse mortgage scheme was launched in India with a hype about two years back, in order to provide the senior citizens holding own homes, with a regular stream of income on a monthly basis in the post retirement years. This was after applicable for such persons who choose to mortgage their property to some bank and start taking a regular income on a monthly basis against that.

Reverse mortgage counseling is absolutely an excellent HUD and industry standard. It is imperative that a borrower fully understands any loan or financial product before attaining it. Reverse mortgage counseling has to be done in person or on the phone. It will take about an hour or more if you have several questions. Reverse mortgage plans are known to provide financial assistance to seniors who have to live on pension and savings. Reverse mortgage allows borrowers to liquidate the value of their home equity and utilize this as an additional source of funding in order to live their remaining years in comfort.

Knowledge can give you a real advantage. To make sure you’re fully informed about reverse mortgage calculators, keep reading.

Reverse mortgages are complicated, so you should obtain loan counseling before you take one out. The HECM process, in fact, requires counseling, and FNMA makes it available. Reverse mortgages need to be repaid. Paying the whole amount of the mortgage along with interest at once will be difficult.

Reverse mortgage loans provide homeowners with not only home security, but financial security as well. With no monthly payments and the added incentive of much needed cash for future investments, this mortgage plan is becoming a popular tool for home owners. Reverse mortgages may be the way for some to turn a profit at the banks, or at least the government’s, expense. Reverse mortgages aren’t bad in and of themselves, if the borrower understands the terms of the loan. Like just about any financial tool, it’s a double edged sword.

Reverse mortgage loans function more or less similar to the conventional mortgage loans, just the reverse way. Instead of paying the lender every month, the borrower gets paid by the lender. Reverse mortgages have seen many changes over the years, and 2009 is no exception. The economy has made drastic fluctuations, affecting housing options for good and bad. Reverse mortgages come with sizable fees, which can amount to several thousand dollars. You can roll these fees into the loan.

The day will come when you can use something you read about here to have a beneficial impact. Then you’ll be glad you took the time to learn more about reverse mortgage calculators.

Hot Tips About Reverse Mortgages

admin — Wed, 22 Jul 2009 11:36:08 +0000

Current info about reverse mortgages calculators is not always the easiest thing to locate. Fortunately, this report includes the latest mortgage info available.

A reverse mortgage is a loan provider to the people who are above the age of 60+. The reverse mortgage system is trendy in America as well as in all the developing countries like India. Reverse mortgages can come in different forms and give you different choices. You can take a lump sum payment when you obtain a reverse mortgage or you can choose to receive a monthly payment. Reverse mortgages are only for borrowers who plan to stay in the home for a significant length of time. The costs are high, but in many cases, a reverse mortgage is still the best choice.

Reverse mortgages also take away equity that the homeowner may need for future emergencies or health care costs. And, since proceeds from the sale of the home are generally used to pay back the loan, reverse mortgages can take away from any inheritance that would be left to surviving children. Reverse mortgages are a very good tool for many senior borrowers to enable them to access the equity in their home while never having to make another payment as long as they live in those homes. However, a reverse mortgage has always been a fairly expensive proposition, usually carrying a price tag of a 2% origination fee as well as a 2% government mortgage insurance fee, plus third party costs such as appraisal, title, escrow or closing, etc. Reverse mortgages usually carry variable interest rates, too, and can affect eligibility.

You can see that there’s practical value in learning more about reverse mortgage calculators. Can you think of ways to apply what’s been covered so far?

A reverse mortgage can be the right solution for you but you will need some information of reverse mortgage before you apply for it. You can check out the website above and get the information about reverse mortgage from the website. Reverse mortgage puts a relatively long term financial impact especially in the inheritance factor. If you consider reverse mortgage and have a large family in your home, you have to sit around with them and discus the plans before hand. Reverse mortgage counseling has to be done in a meeting or on the phone. The duration of reverse mortgage counselling will be almost an hour, or more, it depends on how many questions do you ask.

The day will come when you can use something you read about here to have a beneficial impact. Then you’ll be glad you took the time to learn more about reverse mortgage calculators.

by Luke Williams

About the Author:

About the author: MortgageSet.com offers you tips and useful reverse mortgage calculator resources to help you find the best free mortgage calculator tools. You have full permission to reprint this article provided this paragraph and links are kept unchanged.

What Is A Loan Modification Program

admin — Sat, 18 Jul 2009 03:04:03 +0000

Modifications have been in existence as long as the mortgage lending business has. However, the word was relatively uncommon. Thanks to the decline in the U.S. economy, the phrase “loan modification” has now become a household term. Today, lenders are examining their portfolios in an effort to help their struggling homeowners.

By definition, a loan modification is simply a change or adjustment to the original mortgage agreement that was secured during the purchase or refinance of an individual’s property. The last time you closed on your home you were required to sign a document called the Note. The promissory Note details the terms of how the loan is to be paid back.

It shows information which includes, monthly payments, term and final payment date. When this note is changed the result is called a modification. Common changes made to Note might include lowering the interest rate, a principle reduction of the balance or a change in the terms of the loan. In many cases it is a combination of each.

Primarily, loan modifications happen as a result of negotiations with your lender. Many people believe that professional modification companies are responsible for the end results, this is not accurate. Professional services mealy act on your behalf. They typically will charge $1,500-$3,000 for their services, with no guarantee of a specific outcome. In reality, only your lender is authorized to change or modify your note. Any result or outcome from a loan modification will ultimately come from your lender. When completed, the results are usually dramatic. A reduction in monthly payments of 35% or greater is very possible.

Well, if this explains how a loan modification works, then why would a bank even do one? The benefits to the consumer are obvious. You might be surprised to learn that the bank wins here too. A restructured loan means a better performing asset and less risk for delinquency or foreclosure. Think of it another way. If you were a landlord and had a tenant who was struggling to make the rent payments, reducing the rent might be a way to keep a good tenant and avoid the hassle of an eviction process and finding a new renter. Usually, the Banks belief will be ‘a partial payment is better than no payment at all’. It is for this reason that loan modifications can actually have successful results.

Right now, mortgages rates are less than 5%. If you have a rate that exceeds this amount, you could stand to benefit tremendously by renegotiating your loan. It can be an easy decision for your bank as well because they are not taking any major concessions either. They are only reducing your mortgage rate to current levels, therefore it’s not a loss for them. As a result, your mortgage payments are less, the Bank’s default risk declines and it’s a win win situation for everybody.

Qualifying for a modification is completely different than qualifying for a refinance. Don’t be reluctant to contact your lender because of your credit, job history or lack of home equity as these things are really not considered negative factors.

Once you have decided to move forward, the only other consideration is whether to hire a professional or do it yourself. As stated earlier, because your bank will make the final decision, you can do it on your own. With just a few hours of invested time, the same results as professional services can be attained.

An important note here, before you call your lender you need to have a general understanding about the loan modification process and how the bank will qualify you. Understanding this is the key to increasing your chances of getting approved.

—————————————————-
J.Pisicchio is a 20 year veteran mortgage professional. He has worked in all aspects of the lending business gaining experience from working at large corporations such at Chase. Formally trained as credit analyst, he has spent his career educating borrowers so that they can make the best possible financial decisions. For more information on loan modification visit http://www.mortgageloanmodificationsecrets.com

4 Tips for Finding the Best Refinancing Lender

admin — Tue, 07 Oct 2008 17:23:45 +0000

Choosing the proper mortgage is a huge decision, but if you’re refinancing then choosing the right refinancing lender can be just as important of a decision. Here are 4 things you should think about when choosing the best refinancing lender.

Know why you want to refinance

There are several reasons to consider refinancing your mortgage and each presents a different picture to a refinancing lender. Here are four of the most common reasons people have for refinancing:

You want to lower your current interest rate. This can be profitable if the current rates are at least 2% lower than the rate on your mortgage.
You want to switch from an adjustable rate mortgage to a fixed rate mortgage. If you see interest rates beginning to rise this can be a very smart move.
You want to shorten the term (length) of your mortgage. This will help you build equity in your home faster and will also have you pay off the mortgage sooner meaning you own your home free and clear.
You want to cash out some of the equity in your home. If you’re planning on using the excess cash to do home improvements or to start a business this can be a wise decision.

The refinancing lender will want to know your reasons for choosing to refinance. They will tailor your mortgage product to your needs based on your reasons for refinancing. You should also know about the current terms of your mortgage and should know what your credit score is.

Know what mortgage products and refinancing lenders are available

Similar to getting a new mortgage, there are a variety of lenders that you can work with to refinance your home. Mortgage companies, banks and credit unions are the obvious top choices when refinancing. You can also work with a mortgage broker who will do the work of contacting a variety of lenders on your behalf. Keep in mind that mortgage brokers are not bound to find the best deal for you unless that is specified in a contract. They may very well have their own interests at heart when directing you to a refinancing package.

Also, take the time to either learn or re-learn about mortgage and lending vocabulary. Be familiar with terms such as points, prepayment penalties and interest rates. You can also find current listings of mortgage rates from a variety of websites, such as Bankrate.com, and should take the time to become familiar with current interest rates and trends.

Shop several refinancing lenders before deciding

The mortgage refinancing arena is very competitive these days and finding a handful of lenders to compare should be an easy task. Using a broker makes this even easier, but again make sure they are contractually obligated to present you with the best offer for you. You can find resources in your local newspaper and yellow pages as well. If you’re comfortable using the internet then this is a wonderful place to research refinancing lenders. There are many online lenders who will provide you with quick quotes and great customer service.

Negotiate the best terms for your refinancing

Typically the mortgage company is paid based on the loan that you take through them and this is especially true in the case of mortgage brokers. Make sure that the loan is to your best advantage before signing on the dotted line.

You can also save money by searching for a lender who will offer you refinancing with no closing costs. Make sure if you are comparing loans that you are comparing similar loans to get a good idea of which one is best. Make sure all proposals are sent to you in writing and don’t let a refinancing lender rush you to a decision.

To compare the loans you could do something like a spreadsheet with columns for each important feature such as interest rate, points, prepayment penalties and closing costs for example. This makes it easier to see the differences in each loan offer. Also be sure to check online for the latest mortgage rates.

As I’m sure you know, refinancing your mortgage is a huge decision and should be taken very seriously. Know as much as you can about your refinancing options and the refinancing lenders that you’ll be working with. This will help you to make the best decision possible. By following these tips you will be able to get the best deal and finding the best refinancing lender and mortgage package for yourself will be much easier.

Need A Bad Credit Home Loan Refinance?

admin — Tue, 23 Sep 2008 16:21:35 +0000

When interest rates are low it’s the best possible time to refinance your mortgage. Those with good credit scores should have no problem refinancing and saving a bundle, but if you have bad credit and are looking for a bad credit home loan refinance the picture is a bit different. Yes, you can still refinance your home loan and save some money, but you’ll spend more time searching for a lender willing to work with you and provide you with the best possible refinancing options.

Since bad credit lending is a fairly recent phenomenon you may be wondering why these companies are taking the risk of lending to those with bad credit. You see, mortgage lenders have discovered that while poor credit may be an indication that you are more likely to default on a loan it is not a guarantee. In fact, many people with bad credit are more determined to improve that bad credit and make very good candidates for a home loan refinancing.

Of course the lenders do tilt the odds more in their favor and the refinancing loans they offer are tailored for those with bad credit histories. This means that the interest rates are higher and the terms are different than traditional refinancing loans. If you have bad credit and are thinking about refinancing your home loan then you’ll need to do your research and be able to compare refinancing loans from several companies if you want the best interest rates.

When you do a home loan refinancing you’re simply replacing your old mortgage with a new one. The process is very similar to applying for a mortgage when you first purchase your home. There are closing costs to consider and there may be other fees as well such as attorney fees and title search fees. These fees are another reason to compare several lenders as they can vary quite a bit from one mortgage lender to the next.

If you are able to lower your interest rate (and monthly payment) then mortgage refinancing might make sense for you. Depending on the amount of the loan you’re refinancing a simple 2-3% change in the interest rate could save you hundreds of dollars a month in mortgage payments. Why not take the time to investigate a home loan refinancing for yourself. A few hours of work could add a significant amount of money to your monthly budget.

You should always be careful when looking to get a bad credit home loan refinance. Never appear desperate and don’t let a mortgage lender rush you through the process. The lenders know that you have limited options when refinancing with bad credit and some may try to take advantage of that. You can expect to pay a higher interest rate, but read the rest of the terms carefully and understand the loan that is being offered to you. If you’re patient and take the time to investigate several bad credit refinancing companies you’re sure to find a suitable loan that will save you money.