Tag: Refinance

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Mortgage

How to Choose a Good Mortgage Refinance Expert

Most of us are not aware of the many financing and refinancing options that are available to us. This is unfortunate as knowledge of these options can often save us from many of our financial worries. Sometimes, they also act as lifesavers when you are facing a particularly critical problem or even bankruptcy.

Mortgage refinancing is one such option. In its essence, mortgage refinancing involves paying off a mortgage with the money from a new mortgage which is secured by the same property. This is usually done to secure a lower interest rate and can surely lessen your financial burden by a substantial amount.

The key to successful mortgage refinancing is finding a financial expert to help you secure the best deals. This is all the more true if you are new to such matters and do not have much prior experience. In order to make mortgage refinancing work in your favor, you need to explore and understand your options well, and then choose wisely. This, sometimes, is too much work for the untrained individual.

So, why not let an expert handle it on your behalf? Your mortgage refinancing will go smoothly and everything will be completed in a short time and to your complete satisfaction. Just remember to choose somebody who’s suitably experienced in such matters and has already helped others in the past.

When selecting a company to work with, ensure that the following areas are well covered:

  • The presence of knowledgeable loan officers and a mortgage staff who know the domain well and have up-to-date strategies to help you with.
  • A wide range of loan programs to choose from, even some customized ones.
  • A sound local presence and adequate in-house infrastructure
  • Fast and timely closings
  • Strength and stability to tackle even the most complex situations
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Mortgage

What Reasons Are There to Refinance Other Than to Get a Lower Rate?

In this article I am going to be quick and to the point. I will give you a few ideas of why to refinance other than lower your interest rate, but first I want to give you an example of when lowering your rate may not be the best idea.

Say for instance you purchased your home 6 years ago at 6% and you bought the home for 100000 dollars. If you refinanced today for the same amount at 4.875% your payment would be 529.21 and your current payment is 599.55. Lets round up and say a saving of 71 dollars a month for 360 months. That is a total savings of 25560, but remember you have been making the 599.95 payment for 6 years. So you have paid into your current mortgage 43200 dollars. You would be losing about 18000 dollars in this transaction. This is why it is important to have a professional mortgage broker or loan officer and not someone who is new to the business.

Here are some reasons to refinance other than getting a lower rate.

1) Higher tax deduction for your federal taxes.

2) Possibly get cash back.

3) Consolidate bills to save money monthly.

4) Reduce your term and look at a Bi-Weekly option to save money long term.

5) If you have a bigger size loan lowering your rate could save you money substantially. Also look at possibly reducing your term to see if you can keep your payments the same but build equity a lot quicker.

These are just a few of the reasons to refinance. When looking don’t forget find a professional who knows exactly what he or she is talking about and make sure it makes sense using math and logic!

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Mortgage

Washington DC Interest Only Home Refinance Loans

What Is An Interest Only Refinance Loan?

An Interest Only refinance loan, allows homeowners to refinance their home mortgage into a new mortgage loan, where they do not pay any principal on their loan – just interest. For example, if you own a home worth $ 250,000 and you currently pay $ 1500 per month, an interest only refinance loan may reduce your monthly mortgage payment from $ 1500 to $ 1000 – a savings of $ 500 per month. If you've had a life event such as a new baby, divorce, death in the family or simply need to cut costs – interest only loan can be extremely advantageous.

Interest only loans, like other exotic types of loans, have their purpose. They have their advantages and disadvantages. There is no doubt that you've heard of the disadvantages from media coverage in the past 2 years. However, as with all things, there are situations where interest only loans make sense.

If you live in the Washington DC Metro around (District of Columbia, Maryland or Northern Virginia), there is a good chance that you have equity in your home. If you are thinking about refinancing your mortgage loan as an interest only refinance loan – the most important factor to consider is how long you will stay in your home.

Interest only refinance loans make sense for people, who do not plan to stay in their homes for a long period of time. For example, if you are thinking about relocating to another state or country – you may find it beneficial to pay as little to your mortgage loan company as possible.

In essence, you get all the benefits of homeownership, without the high price tag. In addition, since homes appreciate fairly well in the Washington DC area, there is a good chance that your home will still appreciate by the time that you decide to move on.

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Mortgage

Can You Refinance Second Mortgages?

Refinancing is a great way, if practical, to save money in a variety of different ways. Saving money in the long run can help a person’s financial security by allowing them to deal with their debts faster and more efficiently. The simple and easy answer to the question of can you refinance second mortgages is yes. However, there are factors to consider before heading down this financial path.

The very first thing to look at is the interest rates available for the new loan. If interest rates are higher than the original rate, it would be a horrible decision to refinance a home, because monthly payments will go up along with the time it will take to pay it back. The general idea to stick to when looking to get a third mortgage is to make sure that interest rates are significantly lower than the initial mortgage.

Anytime someone wants to head down this path, along with the interest rates, people must consider that this is a way to consolidate debt into one low payment. In this sense, people can lump all of their other assets and bills into the loan and pay them all off. This leaves the home owner with just their monthly payment, which should be lower than the previous loan payment amount.

Another aspect of this endeavor to consider is the lender. Banks and other forms of lenders may all have different charges for a variety of services. Pick at least three new lenders and compare the total cost of each one’s loan payment plans to see which is the best fit for a home. By comparing the different lenders, it almost creates competition between the banks for your business.

Before this track is even considered, potential candidates must be aware of their exact monetary situation. This will give them a clearer picture of the end result of the refinancing process. Also the credit score is important in banks considering a person for any form of a loan. In this sense, the bank and the customer both stand a lot to gain if a person has a good credit score.

Can you refinance second mortgages? The answer to that question is yes, but it must hinge upon some factors. These factors include the current financial situation, how interest rates are fixed at the time, credit history, and the type of lender that a person will go with. A person can refinance as many times as they wish, but remember to only do so when it will save you money from your current situation.

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Mortgage

FHA Secure Refinance – An Answer To The Subprime Mortgage Mess?

Will the new FHASecure Initiative save all the borrowers with subprime mortgages facing foreclosure? The crystal ball is a little murky on this issue. First, many of the subprime mortgages at issue have loan amounts far above the FHA mortgage limits. Legislation is under consideration that would raise those limits, but nothing is in place yet to do so. Second, many of the high loan to value subprime adjustable rate mortgages issued over the last few years were those referred to as “80/20’s”. This means a combination of a first mortgage for 80 percent of the sales price or home value and a second mortgage for the remaining 20 percent. The second mortgage was most often a fixed rate mortgage with a balloon payment at 15 or 20 years.

The HUD Mortgagee Letter announcing the FHASecure program states:

“If the new maximum FHA loan is not enough to pay off the existing first lien, closing costs and arrearages, the lender may execute a second lien at closing to pay the difference. The combined amount of the FHASecure first mortgage and any subordinate lien may exceed the applicable FHA loan to value ratio and geographical maximum mortgage amount.”

As is usual with HUD this is left open to interpretation. Of course for quite some time it has been allowable under the standard FHA guidelines to have a second mortgage resubordinated (i.e. kept in place still secondary to the new first mortgage) even if the second mortgage is above 100% of the value of the home. This has been useful when the borrower has two mortgages, however there has been a foolhardy lack of cooperation by the second mortgage holders. They often refuse to resubordinate, with the result being a default on both mortgages. The second mortgage holder definitely ends up on the short end of the stick then.

With FHASecure, my bet is that bigger lenders who also do FHA lending will refinance their own subprime loans and hold back second mortgages for the balance due – if only to avoid a default on their own books. However, there are a lot of subprime mortgage note holders who do not offer FHA loans, or are even out of business. It will be really interesting to see how these lenders interact with other lenders and brokers trying to refinance these loans.

Another major influencing factor is that many of the homeowners who might use FHASecure have other credit problems which disqualify them from the program. In order to qualify for FHASecure, a borrower must have perfect credit for the six months prior to refinancing. There are many borrowers who don’t fit this profile.

It remains to be seen how useful the FHASecure program will be. It will definitely save some borrowers, but it may not be enough to save those most in need of help.

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Mortgage

The Key to a Successful Refinance: The House Appraisal

When you are refinancing your mortgage the appraisal is the most important part of the process. You want the value of your home to come back as high as possible in order to make the loan to value ratio as low as possible. If your appraisal value puts your home equity at less than 20%, the higher the amount of equity in your property (the difference between the home's value and your mortgage balance) the more competitive the interest rate you are likely to get since lenders consider borrowers with more equity to be less risky. If you are refinancing your mortgage you need to understand the home appraisal's essential role in the process.

What Is a Home Appraisal?

An appraisal is an opinion of a home's value provided by a third party who is qualified to provide this opinion. The appraiser gets paid for providing the service of valuing your home. In a refinance transaction, the appraisal protects the mortgage lender by ensuring that it doesn't provide a loan of more than the property is worth. If the property later goes into foreclosure or power of sale for any reason, the lender wants to be able to resell the property and get its money back.

The appraiser will contact you to schedule the appointment and often their visit to your home will be between 30 and 45 minutes to tour through the whole house and take pictures and notes on the finishes and condition, measure its dimensions, and evaluate its overall condition both inside and out. The appraiser will then go back to his or her office and conduct research on your property, the legal description, the lot dimensions, sales history, etc. and then he will search for adequate comparables. Ideally the appraiser will be able to find comparable sales that took place in your immediate neighborhood in the past 3 months. Based on the home visit and these records, the appraiser arrives at a professional opinion of how much your property would sell for if you put it on the market. The mortgage lender then uses this value, along with your income, assets and credit history – to determine how much it will lend you and at what rate.

How Home Appraisals Work in Today's Market

The lender or mortgage broker often will order the appraisal through a third party called an appraisal management company (AMC) or contact the appraisal company directly. Many lenders have direct referral relationships with a small panel of appraisers and don't use an AMC. Or the lender may have an in-house independent appraisal department. The appraiser should have local knowledge of the area (called market competence). Appraisers are expected to follow the Uniform Standards of Professional Appraisal Practice issued by their Appraisal Foundation.

Home Appraisal Fees

Residential home appraisal fees vary based on the size of the home and other factors, but typically you should expect to pay $ 250 to $ 400 for an appraisal of a standard single-family home. More complex properties are more expensive because the inspection takes more time.

You may be required to pay the fee up front at the time of the appraisal or in other cases it will be paid for from the proceeds of the mortgage refinance, regardless of whether your loan closes, the appraiser still did the work and needs to be paid. While the fee may seem worthwhile if it enables you to get the refinance terms you want, it can seem like a waste of money if a low appraisal means you can't refinance.

An option is to ask a real estate agent to do a comparative market analysis and provide you with printouts of recent comparable sales from the Multiple Listing Service, taking this step could potentially save you hundreds of dollars by saving you from wasting your money paying for an appraisal if the value is too low to refinance.

Improving Your Chances of a High Appraisal

The value the appraiser gives your home largely depends on the recent sales prices of comparable properties, but there are definitely steps you can take to help secure a higher value.

The biggest thing is making sure your property is neat and clean, uncluttered and easy to inspect. Any pets should be contained and smells masked. Ensure your appraiser feels comfortable in the home and can focus on taking in all the features of your home. Having a dirty or unkempt home definitely will give the appraiser a bad first impression and will make the home appear in poorer condition than it actually is.

The biggest thing an appraiser takes into account is:

  • exterior and interior condition
  • total room count
  • functionality, including interior room design and layout, and functional obsolescence
  • improvements to kitchens and baths, windows, the roof and the home's systems (heating, electrical and plumbing) over the previous 15 years that make the home more up-to-date, functional and livable by today's standards
  • condition and age of the home's systems
  • exterior amenities such as garages, decks and porches
  • location
  • unappealing features, such as an exterior appearance that's inconsistent with the rest of the neighborhood

It's a good idea to create a list of your property's features to provide to the appraiser when he or she arrives.

Getting a Second Opinion on a Low Appraisal

A lot of homeowners are not realistic about their home's value, there is definitely an emotional factor that can lead to the homeowner thinking their home is worth more than reality, however there are definitely cases where the appraiser may have determined a final value that is on the conservative side and this may sink your refinance.

Keep in mind an appraisal is just one person's opinion, the appraiser should be well trained and educated, however as with all professions, there are good and bad practitioners.

If the homeowner does not like the value of the appraisal, they can write a letter of appeal to the lender or AMC, but the chance of an appraiser changing his or her opinion is very slim, unless the homeowner has overwhelming evidence that the value is off.

You may be able to make a case by pointing out that the comparables used were in an inferior school district or an inferior subdivision, or that they have other adverse influences affecting value, such as being on a busy street.

The Bottom Line

Understanding how the appraisal process works will give you the best chance of getting an appraiser to assign the highest possible value to your property. Appraisals don't always come in at the values ​​borrowers hope for, and they are a human process with room for subjectivity and mistakes. You can appeal a low appraisal, but you'll only succeed with strong data to back you up.

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Mortgage

Refinancing a Mortgage – When Should a Homeowner Refinance?

Homeowners may wonder if they should refinance many times over the years they live in their current home. Refinancing means to repay a current mortgage with a second mortgage. This may not seem to make sense, but there are benefits if the correct refinancing is done. Refinancing can save the homeowner a considerable amount of money. There are several circumstances when refinancing may be advantageous. The conditions this article will discuss are credit score improvement, financial circumstances changes and interest rate reductions.

Credit Score Improvement

There are lenders who will make home loans available regardless of a person’s credit score. Even those with a poor credit rating will likely find financing. Financing with a poor credit rating does come with its costs however. Higher interest rates will be charged as the lender will deem the homeowner to be an increased risk.

Poor credit reports can be repaired in a number of ways. If the credit rating is as a result of continually paying accounts late, a conscientious effort to begin making payments on time will gradually improve the credit rating. If bankruptcy was declared, this notation on the credit report will be erased after a certain amount of years.

The appropriate time for a homeowner to investigate refinancing is when their credit rating has improved significantly. Credit score improvement can be determined by requesting a report from all three major credit reporting bureaus. Everyone is permitted a free credit report annually. Homeowners should monitor their credit scores and, when there has been a considerable upgrade, contact various lenders to find out if they can obtain better rates and terms.

Financial Circumstances Changes

Personal financial circumstances play a large part in determining whether refinancing is advisable. If an homeowner’s earnings have increased substantially, the homeowner may qualify for a reduced interest rate and better terms.

Conversely, if the homeowner has taken a cut in pay or lost their job to layoff, it may be sensible to contact the lender to discuss refinancing. If the homeowner is in the position of not being able to make their financial commitments, the lender may offer a consolidation loan. A consolidation loan has the advantage of lower monthly payments but the disadvantage of costing the homeowner more in interest due to an extension of the payment schedule for debts. The advantages may outweigh the disadvantages for homeowners facing this situation.

Interest Rate Reductions

Reductions in interest rates motivates many homeowners to investigate refinancing. While the savings obtained by lower interest rates is alluring, homeowners should realize refinancing is not always beneficial at that time. Lenders charge fees for refinancing homes. The homeowner needs to determine whether the interest saved will more than cover the lender’s fees. If not, refinancing is not appropriate as the homeowner will sustain losses. However, if the interest saved exceeds the lender fees, the homeowner will want to carefully consider whether to take advantage of this.

There are online calculators available that will assist the homeowner in determining whether refinancing will save them money. The procedure is not complicated and will give accurate results.

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Mortgage

Getting a Post-Bankruptcy New York Mortgage Refinance with Low Closing Costs

New York has exceptionally high title and settlement costs, and as a result, the state has the highest mortgage closing costs in the nation. While this won’t necessarily stop you from saving money on a refinance, it can take a large chunk out of your savings account. To assist you, here are a few tips for getting a low closing cost New York mortgage refinance after bankruptcy:

Roll Your Closing Costs Into the Loan

If you absolutely have to save money upfront, you may want to consider rolling all of your closing costs into your post-bankruptcy mortgage refinance loan. This will allow you to refinance your New York mortgage with little to no out of pocket cost. Of course, there is a catch. You will eventually have to pay this money back with interest. In other words, it will cost you more in the long run to save money initially.

Compare Lenders

When shopping for a New York mortgage refinance after bankruptcy, most borrowers concentrate on comparing mortgage interest rates. While this is a good thing, you will also want to make sure that you ask about other items, such as lending fees and closing costs. These charges can significantly vary depending upon the lender you choose and can reduce the financial benefit of your refinance if you don’t get a good deal.

Negotiate to Lower Closing Costs

While lenders don’t openly advertise the fact that they are willing to waive fees or negotiate over closing costs, most of them will if you ask. Before paying estimated closing costs on your post-bankruptcy New York mortgage refinance, talk to lenders to see how low they will go. Be firm, but friendly in your negotiations.

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Mortgage

Refinance Your Second Mortgage

A 2nd mortgage is a secured loan on your property, with your home serving as collateral. Depending on the particular terms of your second mortgage, you could be able to refinance if you wish to reduce your monthly payments or are in need of extra cash. Refinancing a 2nd mortgage can be an option for those who want to pay off their mortgage (excluding any home equity lines of credit), reduce the interest rate they currently pay on their second mortgage, or simply want reduce their monthly payments. Refinancing a 2nd mortgage can also be an option if the homeowner wants to pay off the mortgage, including home equity lines of credit, and receive cash.

You can refinance your second mortgage even if your credit is less than perfect. Second mortgages are an excellent means of reducing monthly payments and getting extra cash for bills, remodeling needs, or any reason the homeowner sees fit. If your interest rate on your 2nd mortgage is substantially above the current interest rates being offered by most lenders, you may be able to refinance your second mortgage. Sub-prime loans are available for second mortgage refinances and even with adverse credit, you may be able to lower the amount of interest you pay on your second mortgage. A poor credit rating is no reason not to explore the possibility of refinancing your 2nd mortgage.

Lenders are standing by to give you a no-obligation quote on refinancing your second mortgage. You can get quotes from several different lenders with one simple application, reducing the number of inquiries on your credit report. Often you can submit your application with no initial credit inquiry at all. Now is the perfect time to think about refinancing your second mortgage. You could be approved in less than twenty-four hours and begin saving money each and every month.

Refinancing your second mortgage is a fast, easy process and with the availability of multiple quotes from one simple application you will be assured you are receiving the lowest rate and best terms possible for your individual situation. If you have poor credit, you may still be able to refinance your 2nd mortgage. Mortgage lenders work with any credit situation and may be able to save you money by refinancing at a much lower interest rate that you currently pay. Get multiple quotes on refinancing your second mortgage from one fast, simple online application. The potential decrease in your interest rate could save you money on your payments each and every month.

To view our list of recommended second mortgage refinance lenders, visit this

page: Recommended 2nd

Mortgage Refinance Lenders.

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Mortgage

Bad Credit Loan Tips: When Should I Refinance My Mortgage if I Have Low Credit Scores?

If you have a low FICO score due to recent bankruptcy or for other reasons, tapping into your home equity could provide you with the lowest possible interest rate for consolidating credit card debt and other loans you may have, including a home equity loan (second mortgage). Bad credit debt consolidation loans and mortgage refinancing at least a few extra percent on the interest rate–sometimes as much as 5% more. The fees are higher, and chances are there are more of them. But, the rates are probably better than credit card and other loan rates.

Your current mortgage terms and interest rate, the length of time you intend to stay in your home, and the level of debt your currently have are all factors to be considered in making any mortgage refinance decisions. Bankrate indicates that the general rule is that when the interest rate on your mortgage is at least two percentage points higher than the current market rate, you may want to consider refinancing. And, most experts believe that it takes at least three years to get the full advantage of the savings from a lower mortgage rate, especially a fixed mortgage rate, so you may not want to refinance if you plan on moving in a year or two.

Your poor credit also has to be factored into your mortgage refinancing decision. For example, you can refinance right after a bankruptcy. But, it’s not a good idea because you can expect rates to be 10% or higher. It’s best to wait until you’ve rebuilt your credit before considering a mortgage refinance. If you make your payments on time for your existing credit, your credit scores could be in the 600s about 2 years after your bankruptcy. Then, you’ll get near conventional rates. However, even if your credit scores are low, you may still be able to get approved for a mortgage refinance. If you are turned down, work on rebuilding your credit and apply again a few months later.

Once you’ve established a good credit history for three years, you may want consider refinancing again for a better rate. Making regular payments, building cash reserves, and lowering your debt will allow you to qualify for lower interest rates in the future.