If you are considering refinancing your existing mortgage, it is important to understand the costs and fees you'll have to pay and how long it will take you to recover those costs.
Refinancing is similar to applying for an original mortgage, so you can expect to pay similar costs. Some of these costs may include:
* An application or processing fee, which covers the lender's cost to process your application.
* A fee for a title search of the public record of ownership of your property.
* A lender's title insurance policy, which protects the lender from losses due to a discrepancy in the title (you may be able to save money by having your title insurer re-issue your current title policy at a reduced rate).
* A fee to have your property appraised.
* A new survey of your property to confirm that no changes to the land or physical structures have been made that would adversely affect its marketability.
* A loan origination fee, which covers the lender's work in evaluating your loan. It is usually expressed as a percentage of your loan amount.
* Other fees, depending on the type of mortgage refinancing you are seeking, may include a funding fee for VA-guaranteed loans, an up-front mortgage insurance premium for FHA-insured loans, or a premium for private mortgage insurance.
Other Costs and Considerations
You may choose to hire your own attorney to review documents and to represent and guide you through the stages of your refinance transaction. If you do, you will have to pay your attorney out of your own pocket.
Some refinance costs may be waived under certain circumstances. For example, an appraisal may not be necessary if you refinance with your original lender. Or you may be able to get some fees — such as the title search fee and loan application fee — lowered or eliminated through negotiation, especially if you refinance through your original lender or your current servicer.
If you have additional cash for closing, you may be able to reduce your interest rate by paying discount points to buy down your rate. Each discount point equals one percent of the loan amount (for example, one point on a $150,000 mortgage equals $1,500). As a general rule, each point that you pay typically will reduce the interest rate offered by the lender by about one-eighth of one percent, or 0.125%. The general rule is that it takes about 5 years to 7 years to recover the cost of points paid at closing.
Be sure to review your loan documents to determine whether your existing loan is subject to a prepayment penalty. Many states limit this penalty or prohibit it altogether, regardless of the provisions contained in your loan documents. You may wish to contact the appropriate state regulator for information about the laws of your state and whether prepayment penalties can be enforced in your state.
You may be able to save money by comparison shopping. Talk to more than one lender and select the one that best meets your refinancing needs at the lowest cost.
You also may want to check with your lender to see if "no-cost" financing is offered. Under this plan, you don't pay many of the typical upfront costs, but the interest rate on your mortgage is typically higher.
Recouping Your Costs Over Time
An important question to ask before starting the refinance process is, "How long will it take to recoup the up-front costs of the refinance?" In some cases, you may have to remain in your home for several years before you recoup these costs. So if you plan to move in the near future, refinancing now may not be cost-effective for you.
To determine if you're likely to recover the costs of a refinance transaction within an acceptable amount of time, you can divide your total refinancing costs by your total savings in monthly mortgage payments. This will show you approximately how many months it will take to recover your up-front costs through your lower monthly mortgage payment. If you find it would take longer to recover your costs than you plan to remain in your home, you may not want to refinance your mortgage. Your lender or mortgage broker can help you make this decision.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/the_costs_of_refinancing.html
Wednesday, September 5, 2007
Some Good Reasons To Refinance
To determine if refinancing is right for you, you should think about your reasons for refinancing.
Refinancing your current loan may make sense for one or more of these reasons:
* If you want a lower interest rate and monthly payment
* If you want a fixed monthly payment rather than one that can increase as interest rates rise
* If you want to use some of your home equity to pay for home improvements, education costs, or other needs
* If you want to build equity in your home at a faster rate
* If your credit rating has improved since you obtained your current mortgage loan, and you want to benefit from more favorable loan terms
The better you understand your motivations, the easier it is to work with a mortgage lender or mortgage broker to discuss your refinance options and arrange the right refinance transaction for you.
Lower Your Interest Rate
The most common reason for refinancing is to lower the mortgage interest rate and the monthly payment. A lower interest rate will result in a lower monthly payment as long as you don't significantly increase the principal balance of your mortgage loan by "cashing out" some of the equity or value you have built up in your home.
When interest rates are low, refinancing out of a higher-rate loan may make good business sense. For example, suppose you decide to refinance from a $100,000 30-year fixed-rate mortgage at a 7.5% interest rate to the same mortgage amount and term at a 6% rate for a cost of $2,000. Your monthly payment of principal and interest for the new loan would be $599.55 versus a monthly payment of $699.21 for the old loan. As a result, you would save roughly $100 per month on the principal and interest portion of your mortgage payment.
When considering a refinance to obtain a lower rate, it is important to know how long it takes to recoup the cost of the refinance transaction. In the previous example, you would break even on your $2,000 cost to refinance after 1 year and 8 months of monthly payments.
If you plan to sell your home in the very near future, refinancing might not be your best option. However, if you plan to remain in your home well beyond the time it would take to recoup your refinance costs, you can save a considerable amount on interest payments over the life of your loan.
Change Loan Products
You may want to use a refinance transaction to switch from one type of loan product to another, such as from an adjustable-rate mortgage (ARM) loan to a fixed-rate loan. This may make sense if interest rates have fallen since you took out your ARM and you now want the assurance that your interest rate will remain the same for the life of your loan.
Your mortgage payments with an ARM adjust with changes in market rates: when interest rates change, your monthly payments change at the next rate adjustment period. The interest rate on an ARM will adjust periodically (for example, annually, every six months, or monthly) after an initial fixed period. But with a fixed-rate mortgage, your interest rate stays the same for the entire term of your loan.
You may have selected an ARM when mortgage interest rates were higher because it offered a lower initial interest rate and monthly payment than a fixed-rate loan. When interest rates fall, refinancing to a fixed-rate loan can guarantee a lower interest rate for the life of the loan.
Here is another scenario. You might want to change from one type of ARM to another to get a better combination of rate and term. For example, you may want to switch from a one-year ARM (in which the rate adjusts annually) to a 5/1 ARM (in which the new rate remains fixed for the first five years and then adjusts annually).
Before you decide to refinance from one type of ARM to another, you should compare the financial index, margin, and any rate caps on your existing ARM with current market rates. It is important to understand how often your mortgage will adjust and how much your payment can change with each adjustment and over the life of the loan. Also, be sure to ask your lender or mortgage broker whether any conversion terms apply or if there are costs to convert to another type of mortgage.
Tap Home Equity
Equity is the difference between what a property is worth and the amount still owed on the mortgage. You build equity in your home with each monthly mortgage payment. A portion of your payment is used to pay principal — helping you build equity by reducing the loan balance — and the rest is used to pay interest, taxes, and insurance. You may also have additional equity built up in your home if it has appreciated in value since you took out your loan.
You can use a refinance transaction to tap into the equity you've built in your home and borrow additional funds, for example, to pay for home improvements, educational expenses, or a major purchase. This is often referred to as a "cash-out" refinance.
Build Equity Faster
You may want to refinance in order to build equity more quickly than you can with your current mortgage. This may be desirable, for example, if you are nearing or planning for your retirement and you want to pay off your loan more quickly.
By refinancing from a 30-year mortgage to one with a shorter term — such as a 10-, 15-, or 20-year mortgage — you increase the amount of your monthly payment that goes toward reducing the principal balance of your loan. This approach typically makes sense for homeowners who can afford an increase in their monthly mortgage payment because generally the shorter the loan term, the higher the monthly payment.
Get More Favorable Loan Terms
You may now be in a high interest rate loan because that was the only type of loan offered to you due to problems with your past credit history. Since you took out your loan, you may have improved your credit rating. If so, you may be able to refinance to obtain a loan with more favorable terms and a lower interest rate.
Refinancing to a lower rate loan may save you a significant amount in interest costs not only each month, but also over the life of the loan.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/some_good_reasons_to_refinance.html
Refinancing your current loan may make sense for one or more of these reasons:
* If you want a lower interest rate and monthly payment
* If you want a fixed monthly payment rather than one that can increase as interest rates rise
* If you want to use some of your home equity to pay for home improvements, education costs, or other needs
* If you want to build equity in your home at a faster rate
* If your credit rating has improved since you obtained your current mortgage loan, and you want to benefit from more favorable loan terms
The better you understand your motivations, the easier it is to work with a mortgage lender or mortgage broker to discuss your refinance options and arrange the right refinance transaction for you.
Lower Your Interest Rate
The most common reason for refinancing is to lower the mortgage interest rate and the monthly payment. A lower interest rate will result in a lower monthly payment as long as you don't significantly increase the principal balance of your mortgage loan by "cashing out" some of the equity or value you have built up in your home.
When interest rates are low, refinancing out of a higher-rate loan may make good business sense. For example, suppose you decide to refinance from a $100,000 30-year fixed-rate mortgage at a 7.5% interest rate to the same mortgage amount and term at a 6% rate for a cost of $2,000. Your monthly payment of principal and interest for the new loan would be $599.55 versus a monthly payment of $699.21 for the old loan. As a result, you would save roughly $100 per month on the principal and interest portion of your mortgage payment.
When considering a refinance to obtain a lower rate, it is important to know how long it takes to recoup the cost of the refinance transaction. In the previous example, you would break even on your $2,000 cost to refinance after 1 year and 8 months of monthly payments.
If you plan to sell your home in the very near future, refinancing might not be your best option. However, if you plan to remain in your home well beyond the time it would take to recoup your refinance costs, you can save a considerable amount on interest payments over the life of your loan.
Change Loan Products
You may want to use a refinance transaction to switch from one type of loan product to another, such as from an adjustable-rate mortgage (ARM) loan to a fixed-rate loan. This may make sense if interest rates have fallen since you took out your ARM and you now want the assurance that your interest rate will remain the same for the life of your loan.
Your mortgage payments with an ARM adjust with changes in market rates: when interest rates change, your monthly payments change at the next rate adjustment period. The interest rate on an ARM will adjust periodically (for example, annually, every six months, or monthly) after an initial fixed period. But with a fixed-rate mortgage, your interest rate stays the same for the entire term of your loan.
You may have selected an ARM when mortgage interest rates were higher because it offered a lower initial interest rate and monthly payment than a fixed-rate loan. When interest rates fall, refinancing to a fixed-rate loan can guarantee a lower interest rate for the life of the loan.
Here is another scenario. You might want to change from one type of ARM to another to get a better combination of rate and term. For example, you may want to switch from a one-year ARM (in which the rate adjusts annually) to a 5/1 ARM (in which the new rate remains fixed for the first five years and then adjusts annually).
Before you decide to refinance from one type of ARM to another, you should compare the financial index, margin, and any rate caps on your existing ARM with current market rates. It is important to understand how often your mortgage will adjust and how much your payment can change with each adjustment and over the life of the loan. Also, be sure to ask your lender or mortgage broker whether any conversion terms apply or if there are costs to convert to another type of mortgage.
Tap Home Equity
Equity is the difference between what a property is worth and the amount still owed on the mortgage. You build equity in your home with each monthly mortgage payment. A portion of your payment is used to pay principal — helping you build equity by reducing the loan balance — and the rest is used to pay interest, taxes, and insurance. You may also have additional equity built up in your home if it has appreciated in value since you took out your loan.
You can use a refinance transaction to tap into the equity you've built in your home and borrow additional funds, for example, to pay for home improvements, educational expenses, or a major purchase. This is often referred to as a "cash-out" refinance.
Build Equity Faster
You may want to refinance in order to build equity more quickly than you can with your current mortgage. This may be desirable, for example, if you are nearing or planning for your retirement and you want to pay off your loan more quickly.
By refinancing from a 30-year mortgage to one with a shorter term — such as a 10-, 15-, or 20-year mortgage — you increase the amount of your monthly payment that goes toward reducing the principal balance of your loan. This approach typically makes sense for homeowners who can afford an increase in their monthly mortgage payment because generally the shorter the loan term, the higher the monthly payment.
Get More Favorable Loan Terms
You may now be in a high interest rate loan because that was the only type of loan offered to you due to problems with your past credit history. Since you took out your loan, you may have improved your credit rating. If so, you may be able to refinance to obtain a loan with more favorable terms and a lower interest rate.
Refinancing to a lower rate loan may save you a significant amount in interest costs not only each month, but also over the life of the loan.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/some_good_reasons_to_refinance.html
Refinancing Eligibility and Requirements
In a refinance transaction, you essentially pay off your current mortgage and take out a new one with different terms that match your refinancing needs.
Because refinancing involves many of the same steps that you followed to get your current mortgage, you may already know what to expect. However, you may encounter some additional steps in the process, so it helps to give some thought to your personal and financial eligibility and to be aware of your lender's requirements for the new loan.
Your Personal Situation
To determine if refinancing your mortgage is right for you, ask yourself a few questions:
* What are my reasons for refinancing?
* How long do I plan to stay in my home?
* How many years remain on my existing mortgage?
* Have I built up equity in my home?
* Can I afford the costs involved?
* Will I save money over the life of my new loan?
With answers to these questions in mind, you will be better prepared to discuss your refinancing needs with your lender or mortgage broker.
Your Financial Eligibility and Other Lender Requirements
To be eligible to refinance a mortgage, lenders usually require that you have at least 5 percent equity accumulated in your property. Equity is the difference between what your property is worth and the amount you still owe on your mortgage. For example, if your house is valued at $100,000, and your mortgage balance is $90,000, you have $10,000 (or 10 percent) equity in your home.
As with the traditional mortgage process, your lender will require you to complete a loan application. The loan application helps the lender assess your financial situation, credit history, the property value, the amount of equity in your home, and other data.
To process your loan application, your lender typically will require:
* Verification of employment and income;
* Information about debts and assets;
* Account numbers and balances for savings, checking, and other financial accounts;
* A title search of the property;
* A copy of the site survey;
* An appraisal (in some cases, an exterior-only appraisal); and
* A copy of your hazard insurance policy.
Your lender also will require information about your present mortgage, including:
* Your current monthly payment,
* The outstanding mortgage balance,
* The status of your property tax and insurance payments, and
* The mortgage lender's contract information (if you're not refinancing through your original lender).
Streamlining the Process
Lenders that use an automated underwriting system may be able to provide you with a speedier refinance process with reduced paperwork. An automated underwriting system often allows a lender to provide you with a loan approval decision in minutes by requiring fewer pieces of information from you at the time of loan application and, in some cases, eliminating the need for a full appraisal of your home (using an exterior-only inspection or a property inspection report).
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/refinancing_eligibility_and_requirements.html
Because refinancing involves many of the same steps that you followed to get your current mortgage, you may already know what to expect. However, you may encounter some additional steps in the process, so it helps to give some thought to your personal and financial eligibility and to be aware of your lender's requirements for the new loan.
Your Personal Situation
To determine if refinancing your mortgage is right for you, ask yourself a few questions:
* What are my reasons for refinancing?
* How long do I plan to stay in my home?
* How many years remain on my existing mortgage?
* Have I built up equity in my home?
* Can I afford the costs involved?
* Will I save money over the life of my new loan?
With answers to these questions in mind, you will be better prepared to discuss your refinancing needs with your lender or mortgage broker.
Your Financial Eligibility and Other Lender Requirements
To be eligible to refinance a mortgage, lenders usually require that you have at least 5 percent equity accumulated in your property. Equity is the difference between what your property is worth and the amount you still owe on your mortgage. For example, if your house is valued at $100,000, and your mortgage balance is $90,000, you have $10,000 (or 10 percent) equity in your home.
As with the traditional mortgage process, your lender will require you to complete a loan application. The loan application helps the lender assess your financial situation, credit history, the property value, the amount of equity in your home, and other data.
To process your loan application, your lender typically will require:
* Verification of employment and income;
* Information about debts and assets;
* Account numbers and balances for savings, checking, and other financial accounts;
* A title search of the property;
* A copy of the site survey;
* An appraisal (in some cases, an exterior-only appraisal); and
* A copy of your hazard insurance policy.
Your lender also will require information about your present mortgage, including:
* Your current monthly payment,
* The outstanding mortgage balance,
* The status of your property tax and insurance payments, and
* The mortgage lender's contract information (if you're not refinancing through your original lender).
Streamlining the Process
Lenders that use an automated underwriting system may be able to provide you with a speedier refinance process with reduced paperwork. An automated underwriting system often allows a lender to provide you with a loan approval decision in minutes by requiring fewer pieces of information from you at the time of loan application and, in some cases, eliminating the need for a full appraisal of your home (using an exterior-only inspection or a property inspection report).
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/refinancing_eligibility_and_requirements.html
Points and Refinancing
Refinancing is the process of paying off your current mortgage and taking out a new one. If you're thinking about refinancing but it's been some time since your last mortgage transaction, you may want to refresh your understanding of points.
Lower Your Rate with Points
Points are charges paid to the lender and are usually paid at closing. A point equals one percent of the loan amount. So, if you have a $250,000 loan, one point equals $2,500.
Before you refinance, compare different lenders' rates and points. Usually, a lower rate carries more points. For example, one lender may charge 6.5% interest with no points and another lender may offer 6.375% interest with one point. As a general rule, each point that you pay will reduce the interest rate offered by the lender by about one-eighth of one percent, or 0.125%.
You may want to consider getting a lower interest rate by paying additional points. Reducing the interest rate by paying points is called "buying down" the rate. In some instances, a lender may finance the points so you will not have to pay them up front. If not, the cost of the points will be added to the other closing fees for the loan.
When to Use Points
If you plan to move within a few years of refinancing, paying points to buy down your interest rate might not be a good idea. The general rule is that it takes about 5 to 7 years to recover the cost of points paid at closing.
Consider James Morgan, who has a 30-year fixed-rate mortgage loan for $200,000. His loan interest rate is 6.75% with one point and his monthly payment of principal and interest is $1,297.20. If he did not pay the point, his interest rate would be 6.875% and his monthly payment would be $1,313.86. Paying the point saves him $16.66 per month, or roughly $200 per year.
In 10 years, James will recoup the point he paid to get the lower rate. Because he will continue to pay lower payments each month after that, James will benefit from the lower rate. Over the life of his 30-year loan, James will save roughly $6,000 in monthly payments due to the lower rate in exchange for the upfront cost of $2,000 for the point. But if he moves after just a few years, he will not recover his costs.
Tax Tips
Note: The following includes an overview of tax laws and is not intended as legal advice. You should consult a tax advisor to get answers to your specific tax questions.
If you itemize deductions on your tax return, you should be able to deduct the points you pay on the refinanced loan. However, points paid in a refinance transaction usually must be deducted over the life of the loan, rather than as a lump sum in the year they were paid. For example, rather than deducting the entire $2,000 in points that he paid when he refinanced, James Morgan will deduct $5.56 per month for the next 30 years. ($2,000 / 360 monthly payments = $5.56 per month deduction).
There are two exceptions to the requirement that you deduct refinance points over the life of the loan. First, if you refinance more than once, you can deduct all remaining undeducted points on your first refinanced loan at the time you do your second refinance (and so on for each additional refinance transaction). Second, any points you paid in a refinance transaction for the purpose of financing home improvements may be fully deductible in the year they were paid.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/points_and_refinancing.html
Lower Your Rate with Points
Points are charges paid to the lender and are usually paid at closing. A point equals one percent of the loan amount. So, if you have a $250,000 loan, one point equals $2,500.
Before you refinance, compare different lenders' rates and points. Usually, a lower rate carries more points. For example, one lender may charge 6.5% interest with no points and another lender may offer 6.375% interest with one point. As a general rule, each point that you pay will reduce the interest rate offered by the lender by about one-eighth of one percent, or 0.125%.
You may want to consider getting a lower interest rate by paying additional points. Reducing the interest rate by paying points is called "buying down" the rate. In some instances, a lender may finance the points so you will not have to pay them up front. If not, the cost of the points will be added to the other closing fees for the loan.
When to Use Points
If you plan to move within a few years of refinancing, paying points to buy down your interest rate might not be a good idea. The general rule is that it takes about 5 to 7 years to recover the cost of points paid at closing.
Consider James Morgan, who has a 30-year fixed-rate mortgage loan for $200,000. His loan interest rate is 6.75% with one point and his monthly payment of principal and interest is $1,297.20. If he did not pay the point, his interest rate would be 6.875% and his monthly payment would be $1,313.86. Paying the point saves him $16.66 per month, or roughly $200 per year.
In 10 years, James will recoup the point he paid to get the lower rate. Because he will continue to pay lower payments each month after that, James will benefit from the lower rate. Over the life of his 30-year loan, James will save roughly $6,000 in monthly payments due to the lower rate in exchange for the upfront cost of $2,000 for the point. But if he moves after just a few years, he will not recover his costs.
Tax Tips
Note: The following includes an overview of tax laws and is not intended as legal advice. You should consult a tax advisor to get answers to your specific tax questions.
If you itemize deductions on your tax return, you should be able to deduct the points you pay on the refinanced loan. However, points paid in a refinance transaction usually must be deducted over the life of the loan, rather than as a lump sum in the year they were paid. For example, rather than deducting the entire $2,000 in points that he paid when he refinanced, James Morgan will deduct $5.56 per month for the next 30 years. ($2,000 / 360 monthly payments = $5.56 per month deduction).
There are two exceptions to the requirement that you deduct refinance points over the life of the loan. First, if you refinance more than once, you can deduct all remaining undeducted points on your first refinanced loan at the time you do your second refinance (and so on for each additional refinance transaction). Second, any points you paid in a refinance transaction for the purpose of financing home improvements may be fully deductible in the year they were paid.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/points_and_refinancing.html
Finding the Best Refinancing Deal for You
If you decide that you are ready to refinance your mortgage, you will want to contact several mortgage lenders or brokers (including your current mortgage lender) to discuss their loan products, rates, closing costs, and fees.
Refinancing your mortgage will affect your financial future, so it pays to invest some time and effort in finding the best deal for you.
In trying to decide what refinancing option is the best for you, here are some items to keep in mind:
Low- or No-Cost Refinancing
If you decide to refinance with your current lender, you may be able to negotiate reduced points or having the loan application fee, credit check, or title search fees waived. A lender other than your current lender may be willing to negotiate these fees as well.
Some lenders and brokers offer "no-cost" refinancing, in which you do not have to pay most of the required upfront processing costs and closing fees. Instead, you may pay a higher interest rate or the costs may be added to the amount you are borrowing.
Interest Rate Lock
An interest rate "lock" or "lock-in" is an agreement by the lender to hold a quoted rate on your loan for you for a specified period of time. Interest rates change often, even hourly sometimes. Ask if and when you can lock in the rate. This may be at the time you apply for the loan or when the lender approves the loan. You'll also want to ask if there is a charge for locking in the rate, how long the lock-in will remain in effect, and whether or not you can obtain a lower rate if interest rates decline before your loan closes.
Re-issue of Title Insurance Policy
A title insurance policy protects the lender (lender's policy) or the homeowner (owner's policy) against loss arising from disputes over ownership of or liens against the property. You should ask your settlement or closing agent to determine whether your title insurer can reissue the policy, which may save you money.
Miscellaneous Fees
Ask about whether fees such as recordation, document preparation, courier, notary, tax services, and other fees can be waived. You may also have to pay fees depending on the type of loan you have chosen or other factors: for example, the funding fee for a Department of Veterans Affairs (VA) loan guaranty, the mortgage insurance premium for a loan insured by the Federal Housing Administration (FHA), or private mortgage insurance premium. These types of fees generally cannot be waived.
Prepayment Penalty
You should determine if your existing mortgage has a prepayment penalty clause. If so, and you pay off your existing mortgage earlier than the terms stated in the loan documents, you may be required to pay a penalty or fee. If your loan is subject to a prepayment penalty, your loan documents should indicate the period during which the penalty applies and explain how the amount of the penalty is calculated, for example, sometimes it is a percentage of the outstanding principal balance of the loan.
In many states, mortgage prepayment penalties are prohibited or limited by law, regardless of the provisions contained in your loan documents. You may wish to contact the appropriate state regulator for information about the laws of your state and whether prepayment penalties can be enforced in your state.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/finding_the_best_refinancing_deal_for_you.html
Refinancing your mortgage will affect your financial future, so it pays to invest some time and effort in finding the best deal for you.
In trying to decide what refinancing option is the best for you, here are some items to keep in mind:
Low- or No-Cost Refinancing
If you decide to refinance with your current lender, you may be able to negotiate reduced points or having the loan application fee, credit check, or title search fees waived. A lender other than your current lender may be willing to negotiate these fees as well.
Some lenders and brokers offer "no-cost" refinancing, in which you do not have to pay most of the required upfront processing costs and closing fees. Instead, you may pay a higher interest rate or the costs may be added to the amount you are borrowing.
Interest Rate Lock
An interest rate "lock" or "lock-in" is an agreement by the lender to hold a quoted rate on your loan for you for a specified period of time. Interest rates change often, even hourly sometimes. Ask if and when you can lock in the rate. This may be at the time you apply for the loan or when the lender approves the loan. You'll also want to ask if there is a charge for locking in the rate, how long the lock-in will remain in effect, and whether or not you can obtain a lower rate if interest rates decline before your loan closes.
Re-issue of Title Insurance Policy
A title insurance policy protects the lender (lender's policy) or the homeowner (owner's policy) against loss arising from disputes over ownership of or liens against the property. You should ask your settlement or closing agent to determine whether your title insurer can reissue the policy, which may save you money.
Miscellaneous Fees
Ask about whether fees such as recordation, document preparation, courier, notary, tax services, and other fees can be waived. You may also have to pay fees depending on the type of loan you have chosen or other factors: for example, the funding fee for a Department of Veterans Affairs (VA) loan guaranty, the mortgage insurance premium for a loan insured by the Federal Housing Administration (FHA), or private mortgage insurance premium. These types of fees generally cannot be waived.
Prepayment Penalty
You should determine if your existing mortgage has a prepayment penalty clause. If so, and you pay off your existing mortgage earlier than the terms stated in the loan documents, you may be required to pay a penalty or fee. If your loan is subject to a prepayment penalty, your loan documents should indicate the period during which the penalty applies and explain how the amount of the penalty is calculated, for example, sometimes it is a percentage of the outstanding principal balance of the loan.
In many states, mortgage prepayment penalties are prohibited or limited by law, regardless of the provisions contained in your loan documents. You may wish to contact the appropriate state regulator for information about the laws of your state and whether prepayment penalties can be enforced in your state.
http://www.mortgagecontent.net/content/jamesbnutter/Refinance/finding_the_best_refinancing_deal_for_you.html
Refinancing after a Bankruptcy
For a person who has declared bankruptcy and wants to refinance his mortgage loan, there's good news and bad news. The good news is that in as little as two years after filing for bankruptcy, you can refinance your mortgage. The bad news is that two years seems like an eternity in our fast-paced world. But if you don't mind a little perseverance, discipline, and a two-year wait, here's how you can make it happen.
Rebuild Before You Refinance
The first thing you need to do is rebuild your credit history. For the most part, your credit report is the key indicator for a lender. Unfortunately, you're going to have that bankruptcy blight on yours for years to come. A Chapter 13 bankruptcy will be on your report for seven years, while a Chapter 7 will stay with you for ten.
But don't despair. There are concrete steps that you can take to get your credit back on solid footing. At the top of the list is avoiding the type of habits that are generally associated with a bankruptcy. Translation: Pay your bills on time. A credit report also reflects your assets, so you should morph your spending habits into saving habits. Employ time-honored tactics like using automatic deposit from your paycheck into a savings vehicle of your choice.
You should also scrutinize your credit report. Make sure it's accurate, and if you find any mistakes, work with your creditors to clear up any discrepancies.
Find a Lender Right for You
The financial world is crawling with lenders, but there are only certain ones who will handle a mortgage refinance after a bankruptcy. Most of these are subprime lenders, who will charge you a higher interest rate and tack on fees to handle your loan. Don't fall for any scare tactics from pushy lenders. While the pool isn't deep, there are enough of them out there to allow you to shop around. Scrutinize rates and especially fees, which certain unscrupulous mortgage brokers will be happy to pump up at your expense.
Eventually, you'll find a lender and a loan that you can live with. At that point, you'll want to return to rebuilding mode. Stay clean with your credit, and continue to build up your assets. In another two years, you'll be surprised at how lenders will regard your turnaround. At that point, the bad news will be nothing more than a bad memory. The good news is that your financial situation will have done a 360-degree turn, and you'll have a great mortgage to prove it.
Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/refinancing-after-a-bankruptcy-550
Rebuild Before You Refinance
The first thing you need to do is rebuild your credit history. For the most part, your credit report is the key indicator for a lender. Unfortunately, you're going to have that bankruptcy blight on yours for years to come. A Chapter 13 bankruptcy will be on your report for seven years, while a Chapter 7 will stay with you for ten.
But don't despair. There are concrete steps that you can take to get your credit back on solid footing. At the top of the list is avoiding the type of habits that are generally associated with a bankruptcy. Translation: Pay your bills on time. A credit report also reflects your assets, so you should morph your spending habits into saving habits. Employ time-honored tactics like using automatic deposit from your paycheck into a savings vehicle of your choice.
You should also scrutinize your credit report. Make sure it's accurate, and if you find any mistakes, work with your creditors to clear up any discrepancies.
Find a Lender Right for You
The financial world is crawling with lenders, but there are only certain ones who will handle a mortgage refinance after a bankruptcy. Most of these are subprime lenders, who will charge you a higher interest rate and tack on fees to handle your loan. Don't fall for any scare tactics from pushy lenders. While the pool isn't deep, there are enough of them out there to allow you to shop around. Scrutinize rates and especially fees, which certain unscrupulous mortgage brokers will be happy to pump up at your expense.
Eventually, you'll find a lender and a loan that you can live with. At that point, you'll want to return to rebuilding mode. Stay clean with your credit, and continue to build up your assets. In another two years, you'll be surprised at how lenders will regard your turnaround. At that point, the bad news will be nothing more than a bad memory. The good news is that your financial situation will have done a 360-degree turn, and you'll have a great mortgage to prove it.
Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/refinancing-after-a-bankruptcy-550
Home Mortgage Refinance
Why Refinance?
At the most basic level, a home mortgage refinance is simply a new loan with new terms used to pay off an existing loan. Like any mortgage loan, various fees accompany the service of a home mortgage refinance whether the new loan is carried out by the existing lender or not. So then, if you already have a mortgage, why would you go through the hassle and pay a whole new set of fees to enter into a new loan?
You can get a lower interest rate that will reduce you monthly payment and often the overall cost of your loan. Similarly, if you have an adjustable rate mortgage (ARM) that is set to readjust in the future, now might be a good time to lock in what are - still historically - very low rates.
You can combine a first and second mortgage into one new refinance loan.
You can reduce or increase the term of you loan depending on your current financial situation. Also, if you are short on cash you can draw upon the equity in your home to take cash out.
Financial Impact and Considerations
This is a business decision that will impact you for decades to come hence you and your lender need to answer some critical questions surrounding your home mortgage refinance.
* How much lower will your monthly payments be?
* What is the sum of the fees associated with the new refinance loan?
* How many years remain on your current mortgage?
* How long do you plan to remain in the house?
* How much of your current monthly payment is interest vs. principle?
The best way to figure out answers to these questions is to speak with multiple loan professionals. Ask the same question to a few different people, this will allow you recognize who is giving legitimate answers and who has your best interests in mind. Begin your research today by comparing mortgage rates at Mortgageloan.com, we want you to do the necessary due diligence in order find the correct loan.
You are in Power
You should treat a possible home mortgage refinance as if you are making a sale. You own the product, your home, and lenders want to buy the right to lend money on your home. Sell the right to lend money on your home to the highest bidder, which means, the lender who can give you lowest interest rate and best loan program for you. The more lenders you compare the better deal you will find on your home mortgage refinance; take advantage our free mortgage quotes and get to researching who can offer you the best home mortgage refinance deal.
Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/home-mortgage-refinance
At the most basic level, a home mortgage refinance is simply a new loan with new terms used to pay off an existing loan. Like any mortgage loan, various fees accompany the service of a home mortgage refinance whether the new loan is carried out by the existing lender or not. So then, if you already have a mortgage, why would you go through the hassle and pay a whole new set of fees to enter into a new loan?
You can get a lower interest rate that will reduce you monthly payment and often the overall cost of your loan. Similarly, if you have an adjustable rate mortgage (ARM) that is set to readjust in the future, now might be a good time to lock in what are - still historically - very low rates.
You can combine a first and second mortgage into one new refinance loan.
You can reduce or increase the term of you loan depending on your current financial situation. Also, if you are short on cash you can draw upon the equity in your home to take cash out.
Financial Impact and Considerations
This is a business decision that will impact you for decades to come hence you and your lender need to answer some critical questions surrounding your home mortgage refinance.
* How much lower will your monthly payments be?
* What is the sum of the fees associated with the new refinance loan?
* How many years remain on your current mortgage?
* How long do you plan to remain in the house?
* How much of your current monthly payment is interest vs. principle?
The best way to figure out answers to these questions is to speak with multiple loan professionals. Ask the same question to a few different people, this will allow you recognize who is giving legitimate answers and who has your best interests in mind. Begin your research today by comparing mortgage rates at Mortgageloan.com, we want you to do the necessary due diligence in order find the correct loan.
You are in Power
You should treat a possible home mortgage refinance as if you are making a sale. You own the product, your home, and lenders want to buy the right to lend money on your home. Sell the right to lend money on your home to the highest bidder, which means, the lender who can give you lowest interest rate and best loan program for you. The more lenders you compare the better deal you will find on your home mortgage refinance; take advantage our free mortgage quotes and get to researching who can offer you the best home mortgage refinance deal.
Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/home-mortgage-refinance
Refinance Your Mortgage and Build Your Credit Rating
Everywhere you look, lenders are judging you based on the digits in your credit score. In the recent past, your credit rating wasn't all that important. But these days, when lenders are offering more and more options for borrowing money cheaply, they're taking a long, hard look at credit histories. Building your credit rating is perhaps the single most effective strategy to make yourself more credit-worthy. And if you currently have a mortgage, you already have one of the best tools for tuning up your credit rating.
Mortgage refinancing to raise home equity
Lenders look for stable, consistent repayment of obligations over time. The more you can show an ability to pay bills on time, the more points you gain. But if you really want to score high in a lender's eyes, pay down your bills and increase the equity in your home at the same time.
If you're making regular mortgage payments, you may want to look at your options for refinancing to a better rate. If you can lower your interest rate significantly, it will enable you to apply the extra funds toward the principal balance on your mortgage. As the principal drops, your equity rises. Continue to make payments on time, and your credit rating will soon be at the top of its game.
Refinancing for debt consolidation
Another way to build your credit rating is to shop for a lower mortgage rate, refinance, and lower your monthly payments without trying to pay off the principal. Use the extra money to pay off other bills, like credit cards. Or open a money market account and demonstrate that you're disciplined about saving for the future.
No matter how you play your hand, refinancing to a less expensive interest rate can be a trump card when it comes to enhancing your all-important credit rating. Once you show a steadily improving credit score, lenders will court you for your business. In a few years, you can take them up on their offers, and refinance again, to further reduce your debt while increasing your rating even more. Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/refinance-your-mortgage-build-credit-rating
Mortgage refinancing to raise home equity
Lenders look for stable, consistent repayment of obligations over time. The more you can show an ability to pay bills on time, the more points you gain. But if you really want to score high in a lender's eyes, pay down your bills and increase the equity in your home at the same time.
If you're making regular mortgage payments, you may want to look at your options for refinancing to a better rate. If you can lower your interest rate significantly, it will enable you to apply the extra funds toward the principal balance on your mortgage. As the principal drops, your equity rises. Continue to make payments on time, and your credit rating will soon be at the top of its game.
Refinancing for debt consolidation
Another way to build your credit rating is to shop for a lower mortgage rate, refinance, and lower your monthly payments without trying to pay off the principal. Use the extra money to pay off other bills, like credit cards. Or open a money market account and demonstrate that you're disciplined about saving for the future.
No matter how you play your hand, refinancing to a less expensive interest rate can be a trump card when it comes to enhancing your all-important credit rating. Once you show a steadily improving credit score, lenders will court you for your business. In a few years, you can take them up on their offers, and refinance again, to further reduce your debt while increasing your rating even more. Start here to compare refinance rates from top lenders in our network.
http://www.mortgageloan.com/refinance-your-mortgage-build-credit-rating
Mortgage Refinance to Reduce the Term
If you have a conventional fixed rate 30-year mortgage, you're alongside the majority. Most people who buy homes-especially those who purchase their first one-opt for the longest payout schedule possible, in order to take advantage of lower monthly payments. But shorter loans should not be overlooked, because they can represent huge savings over the life of a mortgage.
Refinancing for Dramatic Mortgage Loan Savings
The bulk of the money spent for your monthly mortgage payment is dedicated to paying interest. A house that sells for $200,000 today may wind up costing more than twice that price, once all the interest payments are calculated during the course of three decades. By shortening the life of the loan, the savings can be dramatically increased-often by hundreds of thousands of dollars. Once you do the math, it's easy to see why shortening the term and reducing interest payments is the most popular reason why people refinance.
Organize Your Finances
Another compelling reason to do a mortgage refinance and change your mortgage loan's term is to organize your financial plans. If you're 50 years old and plan to retire at age 65, paying off your mortgage in 15 years may be a rewarding strategy, both financially and personally. When retirement arrives, you'll have no more mortgage payments to make, and you can enjoy a smoother and happier transition into your golden years.
Many parents, who have children headed for college in 10 to 15 years, will often do a home refinancing to shorten their term and pay off the mortgage before the tuition bills begin to arrive in the mail. This way, they no longer need to worry about making payments of tuition and mortgage at the same time, which can offer them welcome relief. In many cases, they can save enough to offset the cost of a child's education by not paying an extra 15 years of mortgage interest. That's a double-barreled bargain worth looking into, especially with interest rates near their all-time lows, but threatening to reach double digits within the next few years.
http://www.mortgageloan.com/mortgage-refinance-reduce-term
Refinancing for Dramatic Mortgage Loan Savings
The bulk of the money spent for your monthly mortgage payment is dedicated to paying interest. A house that sells for $200,000 today may wind up costing more than twice that price, once all the interest payments are calculated during the course of three decades. By shortening the life of the loan, the savings can be dramatically increased-often by hundreds of thousands of dollars. Once you do the math, it's easy to see why shortening the term and reducing interest payments is the most popular reason why people refinance.
Organize Your Finances
Another compelling reason to do a mortgage refinance and change your mortgage loan's term is to organize your financial plans. If you're 50 years old and plan to retire at age 65, paying off your mortgage in 15 years may be a rewarding strategy, both financially and personally. When retirement arrives, you'll have no more mortgage payments to make, and you can enjoy a smoother and happier transition into your golden years.
Many parents, who have children headed for college in 10 to 15 years, will often do a home refinancing to shorten their term and pay off the mortgage before the tuition bills begin to arrive in the mail. This way, they no longer need to worry about making payments of tuition and mortgage at the same time, which can offer them welcome relief. In many cases, they can save enough to offset the cost of a child's education by not paying an extra 15 years of mortgage interest. That's a double-barreled bargain worth looking into, especially with interest rates near their all-time lows, but threatening to reach double digits within the next few years.
http://www.mortgageloan.com/mortgage-refinance-reduce-term
Mortgage Refinance and Taxes
One of the great benefits of owning your home is the large income tax deduction you're allowed for mortgage interest. However, when you refinance your mortgage loan into a lower interest rate, you'll pay less interest. Lowering interest payments also means shrinking that juicy tax deduction.
Acquisition vs. Equity Debt
What happens to your taxes if you do a cash-out refinancing? It depends on what you use the extra funds for. First or second mortgages that are used to buy, build, or improve your home are termed "Home Acquisition Debt" (HAD) by the IRS. If you refinance to get either better rates or more favorable terms, you're accumulating HAD. If you do a cash-out refinance, the money that is not used for home improvements is considered Home Equity Debt (HED).
Acquisition Debt is fully deductible, up to $500,000 for individuals, and $1,000,000 for married couples who file joint returns. The deduction limit for Equity Debt is $100,000 more than the existing debt at the time of your refinancing. If you have a mortgage with a balance of $200,000, you can refinance into a $300,000 loan (assuming your home appraises for at least that much now), and still deduct the full interest payments from your taxes. The interest paid on any balance higher than $300,000 is not deductible at all.
Getting the Point
You can take out points on your mortgage in order to push down the interest rate even further. Points are generally tax-deductible, like interest payments-except when you're refinancing.
Some points are charged for lender services (not tax deductible), and others for prepaid interest (deductible). In general, the points are prorated throughout the life of the loan; so if you paid $4,000 in points for your 30-year loan, but $1,000 of that was for services, you can deduct 1/30th of $3,000, which is $100 a year.
But if part of the refinancing funds were used for home improvements, a portion of the points can be deducted immediately. For example, if you took a $100,000 mortgage loan, you could pay off an existing $80,000 mortgage and use the rest for home improvements. In this case, you can deduct 20 percent of the points the first year, and spread the remainder throughout the next 29 years.
One more twist: If you refinance again, all points that have not yet been deducted are applied in that one year, regardless of whether the new loan carries any points.
As you can see, refinancing your mortgage can make tax time a lot more interesting. It pays to do a tax code cram session before deciding how to refinance, so you won't get caught unprepared when you file your next tax return.
http://www.mortgageloan.com/mortgage-refinance-and-taxes-514
Acquisition vs. Equity Debt
What happens to your taxes if you do a cash-out refinancing? It depends on what you use the extra funds for. First or second mortgages that are used to buy, build, or improve your home are termed "Home Acquisition Debt" (HAD) by the IRS. If you refinance to get either better rates or more favorable terms, you're accumulating HAD. If you do a cash-out refinance, the money that is not used for home improvements is considered Home Equity Debt (HED).
Acquisition Debt is fully deductible, up to $500,000 for individuals, and $1,000,000 for married couples who file joint returns. The deduction limit for Equity Debt is $100,000 more than the existing debt at the time of your refinancing. If you have a mortgage with a balance of $200,000, you can refinance into a $300,000 loan (assuming your home appraises for at least that much now), and still deduct the full interest payments from your taxes. The interest paid on any balance higher than $300,000 is not deductible at all.
Getting the Point
You can take out points on your mortgage in order to push down the interest rate even further. Points are generally tax-deductible, like interest payments-except when you're refinancing.
Some points are charged for lender services (not tax deductible), and others for prepaid interest (deductible). In general, the points are prorated throughout the life of the loan; so if you paid $4,000 in points for your 30-year loan, but $1,000 of that was for services, you can deduct 1/30th of $3,000, which is $100 a year.
But if part of the refinancing funds were used for home improvements, a portion of the points can be deducted immediately. For example, if you took a $100,000 mortgage loan, you could pay off an existing $80,000 mortgage and use the rest for home improvements. In this case, you can deduct 20 percent of the points the first year, and spread the remainder throughout the next 29 years.
One more twist: If you refinance again, all points that have not yet been deducted are applied in that one year, regardless of whether the new loan carries any points.
As you can see, refinancing your mortgage can make tax time a lot more interesting. It pays to do a tax code cram session before deciding how to refinance, so you won't get caught unprepared when you file your next tax return.
http://www.mortgageloan.com/mortgage-refinance-and-taxes-514
The Hidden Costs of Mortgage Refinancing
There can be hefty costs involved in a mortgage refinance. On the flip side, there can be ample savings. Before resolving to take the plunge, you should do the math, take everything into account, and see how much you'd really save. The answer may surprise - and even delight - you.
The Cost of Home Refinancing
Just like your original loan, refinancing a mortgage loan involves closing costs. They'll generally be lower, as some fees don't apply to refinancing; but they can still be substantial. Confirm the fees that your lender will charge this time around.
Some mortgage lenders offer an option to roll the refinancing closing costs into the loan itself, known as 'roll-in' refinancing. This will result in somewhat higher monthly payments, because your loan balance is higher; but there would be no up-front costs.
Savings versus Costs
A very popular reason why people refinance is to lower their interest rates. To see how much you can save through better rates alone, use our amortization calculator. Simply enter the loan amount, interest rate, and the length of the loan to see how much interest and principal you'll be paying each month.
A couple of percentage points can make a big difference. For example, you can save $300 a month by switching your $180,000, 30-year loan from a rate of 9 percent to 7 percent. That's quite a bit of pocket change, even for those with big pockets.
However, if you do a home loan mortgage refinancing for a lower rate, it may lead to a smaller tax deduction, and, in effect, higher income taxes. It's an overlooked cost of refinancing. Look at your tax bracket to figure out the impact it will have on on your tax return. For instance, if you're in the 25 percent tax bracket, and a mortgage refinance will lower your monthly interest payment by $200, taxes will claim $50 of that savings. As a result, your true savings will be $150 a month.
Refinancing can also help you lose those pesky PMI payments, especially if your home has increased in value since you bought it. (Check your current mortgage statement to see how much PMI is costing you now). As long as the new loan amount is lower than 80 percent of the property value, you can end your PMI payments.
The Bottom Line
If you're stuck in a high-interest loan, refinancing today may save you a lot of money. Lowering your rate just a couple of percentage points may let you recoup the closing costs in a matter of months. However, before you leap, look at the numbers. Preparation makes for great savings and no unanticipated surprises.
http://www.mortgageloan.com/the-hidden-costs-of-mortgage-refinancing-513
The Cost of Home Refinancing
Just like your original loan, refinancing a mortgage loan involves closing costs. They'll generally be lower, as some fees don't apply to refinancing; but they can still be substantial. Confirm the fees that your lender will charge this time around.
Some mortgage lenders offer an option to roll the refinancing closing costs into the loan itself, known as 'roll-in' refinancing. This will result in somewhat higher monthly payments, because your loan balance is higher; but there would be no up-front costs.
Savings versus Costs
A very popular reason why people refinance is to lower their interest rates. To see how much you can save through better rates alone, use our amortization calculator. Simply enter the loan amount, interest rate, and the length of the loan to see how much interest and principal you'll be paying each month.
A couple of percentage points can make a big difference. For example, you can save $300 a month by switching your $180,000, 30-year loan from a rate of 9 percent to 7 percent. That's quite a bit of pocket change, even for those with big pockets.
However, if you do a home loan mortgage refinancing for a lower rate, it may lead to a smaller tax deduction, and, in effect, higher income taxes. It's an overlooked cost of refinancing. Look at your tax bracket to figure out the impact it will have on on your tax return. For instance, if you're in the 25 percent tax bracket, and a mortgage refinance will lower your monthly interest payment by $200, taxes will claim $50 of that savings. As a result, your true savings will be $150 a month.
Refinancing can also help you lose those pesky PMI payments, especially if your home has increased in value since you bought it. (Check your current mortgage statement to see how much PMI is costing you now). As long as the new loan amount is lower than 80 percent of the property value, you can end your PMI payments.
The Bottom Line
If you're stuck in a high-interest loan, refinancing today may save you a lot of money. Lowering your rate just a couple of percentage points may let you recoup the closing costs in a matter of months. However, before you leap, look at the numbers. Preparation makes for great savings and no unanticipated surprises.
http://www.mortgageloan.com/the-hidden-costs-of-mortgage-refinancing-513
Refinancing Tips - Five Steps to a Speedy Loan
Many homeowners complain that, in these days of refinancing fever, customer service is sluggish, at best. Lenders don't return phone calls or reply to emails, leaving consumers in limbo. Here are five things you can do to help grease the wheels before interest rates have another chance to rise.
1. Have your ducks in a row: Documents are the name of the game when it's time to processing a mortgage loan. Call ahead and find out what you need to bring before you sign the application on the dotted line. These may include tax returns, legal papers, or your spouse (to sign paperwork). If you have everything ready when you show up at the bank, things move quickly.
2. Be ready for the race: It's great if you're "on the mark" and "set;" but if you're not ready to "go," you may be eliminated from the race. If fees are due for credit checks, appraisals, etc. before the closing can take place, make sure that you have the money in hand, and pay them promptly. If you aren't ready to lock in a rate, your home mortgage application process may not go forward. By the time you finally decide, more decisive customers may reach the finish line first.
3. Treat it like a doctor's appointment: When you go to the doctor with a specific complaint, the most important thing is to communicate your symptoms. This way, the doctor can prescribe the ideal remedy. Before you make an appointment with a mortgage loan officer, write down your top five reasons for refinancing. This way, you can get the exact mortgage package that's appropriate for you.
4. Narrow the field: Use the Internet to research various mortgage options, and narrow the field before you talk to your lender. Do you want an adjustable or fixed rate? Do you want to pay the same amount each month, but shorten the life of the loan? Are you trying to free up some needed cash, or just hoping to lock in a lower rate? Do you want to pay down principal, or just pay interest? Ask yourself these questions ahead of time. By knowing your priorities, it will be easier for your lender to suggest the home loan mortgage refinancing that best fits your specific needs.
5. Don't babysit the mortgage refinancing loan process: Once the loan is in progress, keep in touch with your lender, but don't become a backseat driver who looks over the loan officer's shoulder every mile of the way.
By following these five simple protocols, you'll greatly assist your loan officer. And that translates into helping yourself to a smoother and faster mortgage loan refinance.
http://www.mortgageloan.com/refinancing-tips-five-steps
1. Have your ducks in a row: Documents are the name of the game when it's time to processing a mortgage loan. Call ahead and find out what you need to bring before you sign the application on the dotted line. These may include tax returns, legal papers, or your spouse (to sign paperwork). If you have everything ready when you show up at the bank, things move quickly.
2. Be ready for the race: It's great if you're "on the mark" and "set;" but if you're not ready to "go," you may be eliminated from the race. If fees are due for credit checks, appraisals, etc. before the closing can take place, make sure that you have the money in hand, and pay them promptly. If you aren't ready to lock in a rate, your home mortgage application process may not go forward. By the time you finally decide, more decisive customers may reach the finish line first.
3. Treat it like a doctor's appointment: When you go to the doctor with a specific complaint, the most important thing is to communicate your symptoms. This way, the doctor can prescribe the ideal remedy. Before you make an appointment with a mortgage loan officer, write down your top five reasons for refinancing. This way, you can get the exact mortgage package that's appropriate for you.
4. Narrow the field: Use the Internet to research various mortgage options, and narrow the field before you talk to your lender. Do you want an adjustable or fixed rate? Do you want to pay the same amount each month, but shorten the life of the loan? Are you trying to free up some needed cash, or just hoping to lock in a lower rate? Do you want to pay down principal, or just pay interest? Ask yourself these questions ahead of time. By knowing your priorities, it will be easier for your lender to suggest the home loan mortgage refinancing that best fits your specific needs.
5. Don't babysit the mortgage refinancing loan process: Once the loan is in progress, keep in touch with your lender, but don't become a backseat driver who looks over the loan officer's shoulder every mile of the way.
By following these five simple protocols, you'll greatly assist your loan officer. And that translates into helping yourself to a smoother and faster mortgage loan refinance.
http://www.mortgageloan.com/refinancing-tips-five-steps
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