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What you need to know about mortgage refinancing!Why are you paying that high interest rate when you could do a mortgage refinance on your home, and substantially lower your monthly payment? Our 3 minute form can solve all your problems If you are considering mortgage refinancing , also remember that there are a variety of different mortgages. If you plan on living in your home for a long period of time, you may want to consider the traditional fixed-rate 15 year or 30-year loan. Another option is to choose an adjustable rate mortgage and consider refinancing again in a few years. When considering mortgage refinancing , you can choose the perfect mortgage for your needs, which may have changed since you first bought your home. A major lender can be a useful tool in mortgage refinancing . There are several reasons that you may be in the market for mortgage refinancing . You may want to lower your interest rate and increase your long term savings, perhaps you need to pull out some cash, or maybe your monthly payment is just more than you can currently afford. Lower interest rate If you are looking for long term savings , you should consider lowering your interest rate . First, determine how long you plan to stay in your current home. This will help you in mortgage refinancing by deciding if you should buy down your rate, or just refinance with the current rate being offered. If you contact a mortgage refinancing specialist, they can show you the savings per year or over the term of the loan. You can then determine if you should buy down your rate, and how many months It will take to get back the closings costs you will incur in your refinance. mortgage refinancing with cash out If you have built up some equity in your home, you can refinance your home and get cash out. You can take cash out to pay off other debts, such as credit cards or 2nd mortgages. This is a great way to borrow money at an extremely low interest rate . If you keep your equity above 20% of the value of your home, you shouldn't be penalized for taking cash out. If you require more money, and need to take your equity down to below 10%, your rate will be penalized. However, this still may be in your best interest, especially if you are paying off bills that have a higher interest rate . Once you get up to 100% cash out, your rate will increase even more.
mortgage refinancing , what should I consider when refinancing? In mortgage refinancing , there are several factors you should think about before making your decision. These factors include the interest rate on your current mortgage, the current market interest rate , how long you plan to live in your current home, and whether or not you need money for other things (such as home improvement, a new car, or paying off credit cards). The following should answer some of your Questions: What is the interest that I am paying now? In mortgage refinancing you should consider the interest rate you are paying now. Compare it against the current interest rate to see how much you would save. Use our free mortgage calculator to determine your new monthly payments. (Use our Mortgage Calculator ) What is the current interest rate ? When mortgage refinancing to get the benefits of a lower rate, you may have to pay fees associated with the loan. Such as including a point for a lower rate and the closing cost or only include the closing cost with no points, unless your lender is doing a no fee loan. When you are ready to do a mortgage refinance, be sure you have discussed the ffee options wwith your loan officer before getting started. Get the Current mortgage refinancing Rates How long do I plan to stay in my home? The normal stay in a home is 8.2 years. However, you may have a better idea of how long you will be in your home. If you do not plan on owning your home for much longer, you should consider paying no points or doing a no cost loan to cover the mortgage refinancing fees. The lower payments associated with the refinancing may not recoup the cost of doing the loan. However, If you plan on staying in your home for a long period of time, refinancing could be an excellent way to reduce your monthly payments. Also, if you are planning on moving into a new home while rretaining the old home as a rental property, refinancing is a solid plan. You can lower your monthly mortgage payment and in turn, increase your rental income mortgage refinancing is a good time to consolidate any bills. If you have several outstanding bills, you may want to consider mortgage refinancing , and in turn, consolidate and pay off your other debts. If you have equity in your home, you may be able to access that equity through a "cash out" mortgage refinance. You could choose to apply that equity to a debt consolidation plan, a new car or home improvements. What fees are included when mortgage refinancing ? Closing Costs for a Refinance Appraisal $ 350.00 + Credit Report $ 21 Escrow $ 500.00 Title Insurance $ 100 - 1000 based on the state Flood Determination $ 19.00 Recording $ 20.00 - $ 65.00 Loan Origination Fees 0 to 1.5% X the loan amount (0 rebate to the lender, i.e. better rate!) Discount Points 0 to 1% of loan amount (if buying down the rate) Broker Fees : 595 processing Mortgage Insurance 0 to 1.14% X loan amount (Only if combined loan to value or C.L.T.V is over 80%) Homeowners Insurance Approx. .035% X loan amount (Will vary from state to state). Note: Most lenders will roll these closing costs into the amount of the loan. This enables you to close the loan without any out of pocket expenses. Some lenders will negotiate their closing costs with you. If you talk with the right person, they may even pay for some of your closing costs for you. Another option is to ask the lender for a slightly higher rate, and have them pay all closing costs for you, so you will end up with the same loan amount that you have now! Be aware of hidden costs when comparing closing costs. Some lenders will tell you very little on the phone, but when asked to put it into writing, you will see many more fees. The best way to get all fees from a lender is to request a "Good Faith Estimate" (GFE). After receiving the GFE, you will see all charges disclosed. Beware of lenders quoting a rate that is much lower than what most people are telling you, as they may not be able to deliver on the rate, or the may be talking about a loan you won't want to get into.
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