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How To Refinance to a Fixed Rate Mortgage
You may have realized you are better served refinancing to a fixed rate mortgage and eliminating your current variable (adjustable) rate mortgage. But there is a process involved that you might want to follow.
Many homeowners may have gotten their ARM loan when rates were low and banks were eager to help homeowners. But today has seen many interest rates becoming too much for homeowners to handle, along with their monthly payments. Refinancing to a fixed rate mortgage is something many homeowners consider when they need to be able to keep meeting their monthly mortgage payment obligations.
Before You Go For The Fixed Rate
First, it's best to determine if your mortgage has a window of opportunity where you can change from adjustable to fixed without refinancing. This is the convertible option and some adjustable rate mortgages do offer it although these loans may come with higher costs at closing time. If you do not have this option then you will need to follow another course of action - look for a reputable lender in your area.
Doing your homework is something many experts recommend before any homeowner refinances to a fixed rate. This will involve researching current rates for fixed mortgages and getting a good idea of the range of affordable rates. This can be done by getting in touch with local lenders. A mortgage calculator can also be used to compare your current payments to what you may pay with a fixed rate. You may also want to read local home mortgage reports to determine what is the average fixed interest rate for loans in your area. Clearly, you want to be completely sure that the fixed interest rates available are less than what your adjustable rate is or will be.
Although using a mortgage calculator may not be the most accurate method to crunching these numbers, it will be enough to help you determine whether switching to a fixed rate will save you money or not.
What To Ask Lenders
If your mortgage is of the adjustable rate variety, you may be able to refinance to a fixed rate. Ask your current lender whether it would be possible to discuss this possibility. You could ask another lender, but it may be more difficult for you to refinance, as they won't be nearly as familiar with you as your current lender will be.
If you do speak with other lenders, be sure to keep notes on what kinds of deals they have offered or what they told you they would be willing to offer. This will help you to keep each company separate and make a more informed decision at the end of the day. One thing to be sure to ask is whether or not each lender is willing to roll in your closing costs with your refinance. This will mean that you don't have to worry about putting any of your own cash forward.
Another thing to ask is how much you would be charged in interest points. Include this information in what you gather from lenders as well. When you buy points, you can reduce your interest rate. While you will have to put your own money forward to purchase points, this could benefit you in the form of a lower interest obligation, as well as lower monthly payments.
Challenges When Refinancing To A Fixed Rate
Timing is a significant challenge for homeowners trying to refinance to a fixed rate loan. This is because it's important both to lock in at the lowest rate possible, as well as not acting to soon and losing a deal on a variable-rate mortgage. It may help to have analyst or banker advice on your side while you try to do this properly.
If your mortgage payments are already hard for you to handle, refinancing may be your solution, provided that your home has not decreased so much in value as to make this option impossible.
Clearly, you want to be completely sure that the fixed interest rates available are less than what your adjustable rate is or will be. Apply for quotes from the reputable lenders and then review them in order to make the most appropriate selection. Once you have done this, you can begin the process of refinancing your mortgage.
Great Reasons Why You Should Refinance a Mortgage
Although refinancing your mortgage might seem like something to worry about, it shouldn't be. There are many terrific reasons to refinance.
The most obvious reason to do so is that you might be able to get better terms and conditions for your mortgage. That means lower interest rates and a preferred duration that is more agreeable to your current financial situation. Also, when you refinance, you could do so in a manner that helps you pay off your home more quickly. Remember, once you have paid off your mortgage, your home is yours and it cannot be taken away provided you keep on top of your property tax payments.
Lowering Your Monthly Payments
Lower monthly payments are the main reason why many people choose to refinance. Lowering payments means that you have some extra money in your bank account to cover other bills or put away for a rainy day.
Refinancing can also be a solution when there is debt from several sources that needs to be paid off. Many homeowners simply roll their debts into their refinance, and make their monthly payments as usual. This can save a lot of stress and frustration that can come with receiving multiple bills in the mail.
Shortening Your Loan
Refinancing when rates are low can mean a shorter time to pay off your home overall. The lower the rates, the more affordable it will be to do this. Many homeowners will refinance from a 30-year to a 15-year mortgage. Although this will result in higher monthly payments, at the end of the day, tens of thousands of dollars can be saved over the course of a mortgage.
Making Your Rates More Predictable
Those homeowners who are currently paying on a variable-rate mortgage can refinance to a fixed term. This provides the benefit of stability. With a fixed-rate loan, the homeowner always pays the same amount when they make their monthly mortgage payment.
When cash is needed for large or significant purchases, such as college tuition for the kids or home renovations, a refinance can work well. The cash-out refinance is what is done by many homeowners. A lump sum is received when the refinance is complete. Part of this money is used to pay off any existing mortgage, and the remaining money is the homeowner's to spend as they wish or need to.
Reasons Not To Refinance
Believe it or not, there are times when refinancing may not be a good idea. If you already are getting a good rate on your mortgage, then refinancing will only end up costing you more money.
The same is true if your credit score has dropped. What adds to this is the fact that the recent foreclosure crisis has made it more difficult and more expensive to refinance. Higher risk borrowers, such as those with low credit scores will pay more to refinance than those homeowners in good standing.
If you have almost paid your mortgage off, then refinancing will make no sense. In this case, doing so will only serve to restart your mortgage, putting you back to square one with your repayments. Instead, refinancing to a mortgage with a shorter term may make more sense.
If you find that your home's value has gone down over time, refinancing won't be a good idea, especially if your home's equity has been drastically reduced as well. However, a government program like HARP may help you if your loan was serviced or is owned by Freddie Mac or Fannie Mae.
When done at the right time and for the right reasons, refinancing your home can save you a lot of money. But take the time to ensure this is the case before you choose to refinance, because it could be too late to change anything once the papers have been signed.
Understanding home mortgage refinance terminology can really be of benefit while you are trying to answer various questions. For instance, does it make financial sense to refinance right now? If you get a better rate for the same duration you have left on your current loan, you will likely save a lot of money on the home over the long haul.
On the flipside, you may wish to extend the duration of the mortgage in order to pay lesser monthly premiums and have more liquid cash in your budget each month. Most importantly, you can now feel more confident that you can keep your home and avoid foreclosure because your actions to refinance home mortgage ended up securing you a better set of terms.
What You Need To Know About Refinancing a Home Mortgage
The practice of seeking a mortgage refinance to reorganize existing home loans has actually been popular for very many years now. A lot of borrowers wind up securing a refinance despite the rates. For such consumers, it can be crucial to reorganize existing debts to balance their budget.
Such loans are in high demand right now after the mortgage crisis and shaky economy of the last several years. Most people are not sure how to go about seeking one of these loans. For you to be able to get the best out of a refinance you have to know a few things about them
If possible try to stay clear of incurring PMI or private home mortgage insurance. Typically, PMI is required if the homeowner owes more that 80% on the loan. Elminating PMI could translate to cost savings of a few hundred every year. In today's economy, every little bit helps.
The shorter the duration of the loan, the less in interest payments you will make. Obviously, you will need to be able to afford the monthly payment. But if you can afford a shorter repayment plan, you can save thousands of dollars in interest.
It is also very important to inquire about the cost of refinancing. Before taking out a loan, ask the lender about all the expenses involved in getting the loan. It's important to compare closing costs and fees from a variety of lenders to see who really is the best deal. A lower interest rate may be offset by some higher closing costs.
As you seek a Houston refinance home mortgage, if it is within your power to improve your credit score, do so. Lenders are very wary of lending money to people with questionable credit histories, so shoring up this area is one way of ensuring you will get a good deal later on when you take out a loan.
Article Posted by Expert Author: 4 on 06/14/2013
Article Posted In: Understanding the Refinance Process
Home Mortgage Refinance Terminology
Mortgage refinancing offers many benefits to home owners. Home mortgage tefinance yerminology can be a bit daunting for the uninitiated. But simply put, refinancing is the act of replacing an existing mortgage with a new one, and it comes with new terms, conditions and costs. But, like everything else, it is important to educate yourself with the process and important terms. A clear understanding of the refinancing process can help you avoid potential pitfalls and successfully take charge of your finances.
When refinancing your mortgage, you will have to select a lender to give you the loan in the first place. A lender can be a person, an institution or a firm. They might ask that your property be appraised before they can qualify you for a refinancing. Appraisal is a written analysis of the estimated value of your home. It is conducted by a qualified appraiser. Lenders provide home owners with a good faith estimate which is an approximation of the charges that the borrower is likely to incur when the settlement is achieved. Another thing you need to know is whether the mortgage is ARM i.e. Adjustable Rate Mortgage or a fixed one. The difference is that in an ARM, the interest rate fluctuates along with that of specified index. Understanding home mortgage refinance terminology is a good start to making the wisest choice for your budget and long-term financial outlook.
Article Posted by Expert Author: 4 on 06/04/2013
Article Posted In: Understanding the Refinance Process
Mortgage Refinancing- A Quick Primer
It is becoming increasingly difficult for many Americans families to make timely payments on their home mortgage. For such families, Mortgage Refinancing may be the only way out of this dilemma. The high interest rates and unstable economy have made it mandatory for many to get a new mortgage that replaces the original. This is called mortgage refinancing. It is done to get better interest term and rates for the borrower. The procedure is quite simple. The previous loans are paid off by creating a second loan. It is a great way to convert a variable loan rate to a fixed rate while getting much better interest rates.
Mortgage refinancing is easier for those with a perfect credit history. Borrowers that have bad or even slightly less than perfect credit are considered risky and aren’t given the more favorable terms. Banks and lenders necessitate that borrowers maintain their original mortgage for a minimum of 12 months before they are allowed to refinance. But terms and conditions vary for each lender so it is a good idea to shop around for the best refinancing opportunity. Choosing the original lender for mortgage refinancing is a good idea in many instances, nonetheless. This is because borrowers have better odds of getting better loan rates with their original lenders.
Article Posted by Expert Author: 4 on 04/25/2013
Article Posted In: Understanding the Refinance Process
Mortgage Refinancing With Bad Credit: There Is Still A Way
Bad credit isn’t an obstacle to your living in a more financially responsible manner. It is completely possible to get mortgage refinancing with bad credit, provided you are ready to do your homework to find the best deals possible. When looking for the right lender, remember that there are some bad credit mortgage specialists out there who can provide you with a refinance program for those with bad credit. Refinance programs are meant to provide you with lower interest rates so you can make smaller payments. So it is good idea to consider home mortgage refinancing even with low credit scores.
It is advised that those with a bad credit history wait for at least two years after a bankruptcy before they think about refinancing home mortgage. This is because bankruptcy and repossession are serious credit problems and lenders may outright deny your appeal for a refinance based on these. So take at least 2 years to build up and re-establish your credit score which will ensure lenders that the bankruptcy was a onetime deal. But if there are other causes to your poor credit then rejoice because lenders often overlook the occasional late payments and even high credit card debt.
Article Posted by Expert Author: 1 on 04/15/2013
Article Posted In: Understanding the Refinance Process
How to Approach a Meeting with a Mortgage Consultant
In a previous blog listing it was mentioned that working with a consultant can increase the likelihood of refinancing a mortgage in the best possible manner. However, you do need to know how to approach a meeting with a consultant. You need to be prepared. You cannot go into the meeting hoping the consultant will be the sole guiding light. You will be required to brainstorm prior to the meeting and make a list of the terms you are seeking in a new mortgage. You should point out to the consultant what the current problems are with your mortgage and why the mortgage should be refinanced. Performing research into the current mortgage landscape definitely is a “must do” step since it will allow you to be more informed during the meeting. You also should compile quite a number of questions for the meeting with the consultant since asking the right questions will further enhance your ability to get the most out of the meeting.
One good resource can be found at http://www.refinancehomemortgageguide.com/, a site that lists common industry terminology, helps consumers identify questions that they may not have thought of before, and provides useful tips and current industry information and news.
When Should You Refinance a Home Mortgage?
Refinancing a home mortgage can be a wise decision when it is timed properly and not done to excess. Homeowners should look into refinancing when they are capable of getting the best deal. They also should avoid trying to refinance repeatedly because of the time, effort and costs involved. As for the timing, it may be best to contact a Houston refinance home mortgage specialist when you believe the present time may be perfect for getting the lowest interest rate available. It also should be noted you should look to refinance if you will be remaining in the home for many more years. There are exceptions to this rule but they are rare. Why refinance a home mortgage if you will be moving out of your residence? If you are not sure about whether or not the time or circumstances is right for home mortgage refinancing then you should discuss things in depth with the refinance specialist. This way, you can tell if you are making the appropriate action at the right time.
One thing is certain - at the time of this writing, we are experiencing unprecedented historically low interest rates. For many people, now or in the next few years is definitely the right time to seek out a refinance home mortgage (as the Fed recently announced it won't be raising rates any time soon). Doing your homework now can help you prepare for perhaps one of the best financial moves you will ever make.
Planning for Your Future Financial Security
No one knows what the future hold which is why it is best to take care of future planning as early as possible. One way to do this would be through mortgage refinancing. Taking part in San Antonio refinance home mortgage plans might not seem like a means of setting up financial security but it really does have value in this regard. Cutting down on cost expenditures by acquiring a lower rate of interest not only saves you money, it opens the door for you to put your money into investments that can work for you. Those that are currently in dire financial arrears could refinance a mortgage to facilitate debt consolidation. Of course, getting a new mortgage that pays off your home means you will always have an equity property contributing to your net worth. That alone sets the stage for financial stability since a home is the most important thing you could ever own from a financial stability perspective.
Useful information can be found at http://www.refinancehomemortgageguide.com/, a resource dedicated to educating consumers on all of their options to secure economic stability, a balanced budget, and future financial security. Terminology is covered, as well as the ability to get connected to reputable lenders in the industry.
What to Expect on Your Closing Day
Closing day has arrived and you have a few responsibilities to take care of. So, what should you expect on closing day? The main thing you should expect would be - not surprisingly -- to sign your name. Specifically, you and the various parties to the mortgage will be signing legal documents that agree to the terms and condition of said mortgage. In addition to agreeing to the terms and conditions, there will be an expectation of an agreement between yourself and the seller of the home regarding the transfer of the ownership. Yes, there are quite a number of steps with Charlotte refinance home mortgage steps. You also should have expectations regarding what the various costs of the closing will be. There will be fees involved with the process and payments or. at the very least, agreements for future payments will be made on closing day. To ensure that the entire process goes along smoothly, it is advised to prepare for your closing day as much as possible. This all starts with having a clear understanding of what is to be expected of you when that day arrives.
Prior to this landmark day, you should be spending time asking a lot of questions, analyzing your budget with your new loan estimates, and gathering all of the necessary documentation to make your big day happen. We can help with our free resources to help you educate yourself in this important subject.
Are You Shopping for Homeowners Insurance?
Homeowner’s insurance is vital for the protection of your property. All manner of calamities can arise that can devastate a home. With the proper homeowner’s insurance policy in place, it is possible to procure the right amount of protection required to safeguard your assets. This is only possible, however, when you invest in the right policy. Shopping for homeowner’s insurance is a deliberate process which cannot involve cutting corners in any way. Seeking quotes from reputable insurance providers is the obvious first step. (This should always be the first step in the home mortgage refinance process as well) Once you receive the quotes you will then be required to look at each quote line by line to make sure the policy you are examining truly does meet all your needs. You can look for quotes that have the lowest premiums but this might not be the best guiding factor. Rather, you will want to acquire the policy that offers the best possible coverage at a fair price. Acquiring a slightly more expensive policy that offers better coverage could be the best option to explore. No matter which policy at which price point you select, make sure that you budget this expense in when you refinance home mortgage.
Consolidating Debt Through Refinancing a Mortgage
No one likes to be mired under the crushing burden of mounting debt. However, various problems can arise that can cause a debt situation to spiral out of control. For many, mortgage refinancing may be sought as a way of consolidating debt. In such a process, two mortgages, mortgage related debt, and even non-mortgage related debt can be combined under such an umbrella. There are both positives and negatives to doing so. (CNN Money covers a few of the pros and cons of consolidation and mortgage refinance.) The main positive would be the ability to pay off debt quicker and at a lower interest rate. The main drawback would be consolidating debt is never always a guarantee for eradicating the problems you may be facing. Further debt issues could arise or, worse, increased irrational spending could undermine the potential to get your debt under control. However, with the right approach to addressing your debt situation, consolidating debt through refinancing a mortgage can prove to be a wise move.
The Refi Guide can help you answer a lot of questions regarding this important issue. You don't want to make poor decisions regarding your financial situation during this tough economic stretch in history.
The Top Bad Reasons to Refinance a Mortgage
There are quite a number of good reasons for refinancing a home but there are also reasons that are downright awful. One truly poor reason would be to refinance a mortgage in order to acquire cash for investing purposes. A risky venture such as this could lead to the loss of your home if the investment turns out to be a failure. Switching from an adjustable rate to a fixed rate may be a bad idea if you do so not based on any real facts but rather biased reports about problems with adjustable rates. Mortgaging for debt consolidation can be a seriously poor financial decision if it is not combined with a reliable plan to get out of debt. (Those that seek to refinance home mortgage with bad credit will probably be weighing these options.) Refinancing to cut down on the amount of your monthly mortgage payment might seem like a good idea on the surface but it has the costly result of extending your number of payments enormously. Keep all these factors in mind when you are thinking about a refinance home mortgage.
Refinance Home Mortgage Guide Site Launch
We are pleased to announce the launch of our new site, Refinance Home Mortgage Guide. One thing that makes the internet very valuable is the ability to target useful information by simply and efficiently conducting a search on questions you may have about a particular issue. These days, refinancing your home mortgage is a very hot topic for a variety of reasons. For starters, this tough economy has produced unprecedented low interest rates that make a refinance very attractive. People are able to reduce their monthly mortgage, or to reduce the amount of time left on the loan. If you are fortunate to have a great deal of equity in your home, you may want to take cash out to remodel, pay for college, or consolidate higher interest rate debt. Whatever your motivations for turning to the internet for help, we are confident that our guide can help answer your questions, educate you on jargon you may not be familiar with, and provide a useful checklist as you go through the motions of this important process. We also can connect you with mortgage companies eager to do business with you, and ready to quote you on a refinance of your existing mortgage.
The Various Fees Common with Mortgage Refinance
Refinancing a mortgage is commonly sought for the purpose of saving money. While you can definitely save money doing so, there are costs involved with the process. You might be a little annoyed at first once you actually discover the various fees for refinancing a mortgage but these fees are unavoidable. Closing can come with several costs including a loan origin fee (aka a pre-planning fee for the loan), an application fee, and legal costs. Mortgage insurance costs might also be weaved into the closing. You may also be required to cover home inspection and title search costs on the Philadelphia home mortgage refinance process as well. Points on the loan may be owed as well. Points refer to a nominal fee as low as 1% charged by the lender to cover the yield. To the chagrin of many, an early payment penalty may be charged on the loan which is certainly not something most people would prefer to pay but the initial contract requires. You need not worry about out of pocket expenses as all these fees may be included in the new mortgage.
If you are looking for online resources to help you make sense of the refinance process, check out The Refi Guide that addresses terminology and gives useful advice on how to proceed.
Refinancing Your Home Mortgage: When to Do It!
Choosing a mortgage may be the most important financial decision you will make. But refinancing your home mortgage comes in at a close second as well. A couple of years ago, it was generally thought that a refinance was only worth it if the current rate is two percentage points lower than what you are currently paying. But current conventional wisdom has proven that theory wrong. The old precept isn’t valid any longer thanks to alternatives such as the “no- cost” refinancing options. “No- cost” means that at the time of closing nothing would be paid out of your own pocket. This is made possible when either the lender’s fees is rolled into your new loan balance or the rate is a bit higher than what you could get if you paid the lender's charges up-front.
The real question is if you do refinance your mortgage, how long it will take to recoup your costs. To find the answer, some compare monthly savings next to up-front costs. So for example, if you can save $100 a month on your mortgage payment by refinancing, but you end up paying $2,500 for the refinancing itself, then you have to stay with the new loan for 25 months to justify the difference. So if you are planning to move in that time, refinancing wouldn’t be worth it.
Home Mortgage Refinance: Costs Involved
A home mortgage refinance enables home owners to pay off their current mortgage and get a new one instead. The new mortgage comes with new terms that establish the long-term costs of home ownership. Yes, refinancing does minimize the long term costs, but it is important to weigh these savings against the costs of obtaining the refinancing itself. It may just end up costing just as much as it did to obtain the original loan. Charges include an application fee, loan origination fee, title search expenses, insurance binder and appraisal fee along with other sundry costs.
The amounts that you actually pay really depend on you being able to find a good lender offering great bargain deals on refinancing. There is absolutely no need to pay sky-high prices when there are deals pretty much everywhere you look. If you work with your existing lender to refinance your loans, chances are they will be able to waive off many of the fees for you. But at the same time, the other lenders may be willing to knock off a few charges as well just to get your business. You can also work with a Houston refinance lender to include the closing costs in the amount borrowed.
Quick Guide to Refinancing Terminology
It is important to familiarize yourself with refinancing terminology before going out looking for the right lender. The process is the same as the one you went through when getting your current mortgage. But you will hear some new words that might be confusing. Commonly used refinance home mortgage terms include words like foreclosure, short sale and reverse mortgage, etc. But there are also other mostly mysterious terms that might cause confusion and misunderstanding.
For example, there is the FHA or Federal Housing Administration. This is an agency under the U.S. HUD and its job is to insure all the residential mortgage loans made by private lenders. These are people who decide on the standard for construction and underwriting. Then there is the Fair Credit Reporting Act. This law was created to protect borrowers by regulating the disclosure of consumer credit reports by reporting agencies and setting up procedures for correcting inaccuracies on a person’s credit record. A bridge loan, also known as a swing loan, is a type of second trust that allows the proceeds to be used for closing on a new house before the present home is sold. The borrower’s current home is the collateral in this case.
Mortgage Refinancing With Bad Credit is a Possibility
It is completely possible to get mortgage refinancing with bad credit given that you are alright with paying a little more in interest and expenses than those with perfect credit. Bad credit isn’t the end of the line when it comes to refinancing choices. While there is no doubt that bad credit may make it a lot more difficult for you to get a favorable refinance deal, the fact remains that you still have opportunities available.
The worst news here would be that your bad credit score will definitely make it a lot more expensive to get a mortgage refinance. The bad credit may be due to a variety of factors. For example, lots of credit card debt doesn’t really affect your chances of getting a refinance. But if the bad credit is due to missing mortgage payments by 30 days or more than there aren’t many lenders who will be willing to refinance for you. In such cases, a loan modification seems to be the only choice. The secret to refinancing with a bad credit score is simple, shop around till you find a good deal. There are lenders out there that specialize in loans for people with bad credit. Contact at least 6 different lenders, ask them for the options they have for you. You can also choose to work with mortgage brokers who can find the lowest rates for refinancing in your case.
Quick Home Mortgage Refinance Guide to Simplify the Process
Refinancing is paying off your existing mortgage by creating a new one in its place. Here is a quick home mortgage refinance guide to help you decide if you need one. These days mortgage rates are at an all-time low. Even those with perfect credit scores are looking to refinance their mortgages so they can avail the low interest rates and have smaller payments. This means that refinancing has become an essential option for those with poor credit scores as well. The process is essentially the same as the one you went through when getting the original mortgage. The costs for refinance also remain essentially the same.
Once you have found a good lender to refinance your mortgage, they will assess your income, assets, credit scores, others debts and the value of your property before signing on the amount that you need to borrow. Better credit scores can score you lower credit rates and vice versa. But it is still important to take your time when selecting a vendor as they can also vastly impact your refinance outcomes. Your local community savings centre and banks can guide you in the right direction and may just be the best lenders with the most affordable deals in your area.