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Refinancing Tips for Getting the Best Rate
Posted by: | CommentsIt’s no secret that millions of homeowners have an opportunity to save money with the lowest mortgage refinance rates we’ve seen in fifty years. Low rates and affordable refinance loans are one of the few benefits that consumers have with the sour U.S. economy. We suggest that if you have a mortgage with an interest rate above 5%, that you should speak with a loan officer right away about home mortgage refinancing.
One of the major road blocks for many homeowners has been that mortgage refinancing guidelines are more demanding today than they have been in the past. It’s not surprising that Fox News published an article this week about taking advantage of the lowest refinance rates in history. Most lenders are reporting a significant increase in mortgage refinance loan applications, so you can expect your loan to be in process longer than usual. Fox reported that banks, lenders underwriters and processors have been overwhelmed with the increased volume of refinance applications they have working on since rates fell last week. Refinance lenders that used to ask for 30 days or less to close on a refinance loan now say they need at least 45 days and in some cases 60 days.
- Be ready with income documentation
- Submit your application now
- Compare quotes from multiple lenders
- Be prepared for a lengthy loan process
- Shop mortgage rates
Some lenders, mostly regional and smaller local lenders, are still offering 30-day closing refinances. Borrowers should look beyond the large banks and consider quotes from these lenders before deciding. Michael Becker, mortgage banker at WCS Funding in Lutherville said, “Shop around and always check the pricing,” says Md. Becker continued, “When big lenders get overwhelmed they may raise their rates to slow down applications. Local companies can sometimes offer you services that the big guys can’t. Read the original Fox News Article.
Debt Consolidation with a Mortgage Refinance
Posted by: | CommentsIn these days of financial uncertainty, many American homeowners are working toward true financial freedom. However, budgeting can only get you so far when you have a large amount of credit card debt at high, revolving interest rates. The actual cost of the debt increases far faster than a normal person can pay it down, making it virtually impossible to get ahead. Many financial advisors recommend mortgage and debt consolidation. Consolidating debt with a mortgage refinance offers a chance to move that high interest debt to a debt consolidation mortgage. Home owners all across the nation are consolidating debt with a fixed rate refinance loan that lowers their monthly payment and slows the interest building up on the loan.
Mortgage refinancing can be a great vehicle for bill consolidation and saving money with a lower monthly payment. Consolidating debt is possible through refinancing your home mortgage, increasing the loan, and taking out cash to pay off credit cards or other high interest debts. This mortgage and debt consolidation makes it easier to plan out complete debt elimination. Lower monthly payments allow savvy home owners to pay extra each month, which is applied straight to the principal of the mortgage loan. This drastically reduces the amount of time it takes to pay off the loan. Consolidating debt with a fixed rate refinance loan can be a very effective route to restoring your financial peace and credibility.
However, consolidating debt with a fixed rate refinance loan should be paired with an overall financial plan, including a budget and savings as well as the mortgage and debt consolidation. Budgeting and avoiding additional debt is essential for achieving financial freedom. Savings is also an important tool in the fight for control of your finances, because an emergency can make you fall into the trap of credit card debt again if you do not have enough savings to cover unexpected expenses in addition to your debt consolidation mortgage. These loans are kind of like the opposite of a money mortgage that provides cash out to the borrower. The debt mortgage consolidates bills and loans rather than extending additional debt.
A consolidation mortgage is the cornerstone of a financial plan for those home owners who need to rid themselves of high interest, revolving credit card debt. Consolidating debt with a refinance loan that has a fixed interest rate provides clear and immediate relief from the stack of bills that multiply themselves through revolving calculating of extremely high interest rates. Mortgage and debt consolidation slices those interest rates so you can pay down the principal of the loan. Debt consolidation with a mortgage refinance also helps the organizationally challenged with only one payment each month, rather than many individual credit cards.
How to Refinance a Home Equity Line of Credit with Bad Credit
Posted by: | CommentsFirst, make sure it actually makes sense to refinance your home equity line at this point. Do you have a pre-payment penalty? Does your existing line of credit have a variable interest rate? Can you wait a year or so and straighten out your credit in the meantime? You might be surprised at how much difference that can make in the interest rates for which you will qualify. However, you may need to get relief from a high interest rate so you can get your credit rating back in line. Therefore, that is a solid reason for doing a refinance with a bad credit mortgage. The decision is a personal one. Nevertheless, approaching it from a place of responsibility will help you get your financial life back on track and not just give you a short term solution.
Second, find a lender that specializes in financing for those with bad credit. A distinct class of lenders specializes in subprime lending with unique loan programs for home mortgage refinancing. Prime lending is for those with the high credit scores from the credit bureaus like Trans Union, Experian and Equifax. For those with less than stellar credit histories, the subprime market offers the ability to refinance into a fixed rate equity loan. That can make a significant difference in the total debt payments you make each month. You can see your mortgage payment go up significantly even with a single percentage point increase in the interest rate of your home equity line of credit. Refinancing a home equity line of credit makes sense.
Third, shop around for rates. More than one lender offers bad credit equity loans. You can shop around and see which one will offer you the best rates. It also gives you bargaining power when you are negotiating your loan. When comparing rates, make sure you get a full list of closing costs and fees as well as any point requirements. These all factor in to how much you save on your refinance into a fixed rate equity loan.
Fourth, take steps to improve your credit score. You have gone to the trouble of refinancing your home equity line of credit to a fixed rate. Use that stability to get your financial life back into shape. Why mention this as part of how to refinance a home equity line of credit with bad credit? Because, doing a refinance is easy one time. However, if you keep making the same mistakes over time, the time will come where that refinancing will not solve all your financial difficulties. You can get great rates when you look at bad credit lenders for your refinancing. Nevertheless, use your head and get the best deal possible.
Nationwide Says Refinance and Save While You Can
Posted by: | CommentsNationwide recently published an article highlighting the opportunity to save money by refinancing with lower interest rate. There is a sense of urgency for homeowners to get approved for a lower fixed rate because the Federal Reserve has made it clear that they can’t keep key rates this low for much longer. The mortgage company stressed to their audience that if they to get cash out of their house that now was the best time. Consumers in the U.S. have grown accustomed to low home loan rates, but it’s unrealistic to think that affordable house financing will last forever. According to Nationwide you should seize the opportunity for low mortgage refinance rates to meet your needs if you are eligible with today’s refinance guidelines. Read the original Nationwide article > Best Home Refinance Loans
Underwater Mortgage Refinancing
Posted by: | CommentsMillions of homeowners continue to complain about the lack of solutions for underwater mortgage refinancing. CoreLogic issued an alarming report regarding negative equity that points to a double dip and another housing bubble bursting in the near future. Almost 23% of all U.S. homeowners who are struggling with underwater home mortgage loans at the end of the first quarter of 2011 fell slightly from 23.1% in the 4thquarter of 2010. CoreLogic reported that nearly 11 million homeowners have negative equity and are strapped with underwater home loans. With so many borrowers owing more on their home loans than their property is worth and another 2.5 million borrowers were nearly underwater which the real estate data and analytics company defines as having less than 5% positive equity.
It’s no secret that the decline in home prices led to the underwaterwater mortgage trend. Borrowers with 2nd mortgage liens on their home were twice as likely to suffer negative equity as those with only one lien. 18% of borrowers without home equity mortgages were underwater while 38% of borrowers with home equity loans were in a negative position. A total of 4.5 million underwater borrowers have an equity loan or credit line.
CoreLogic’s recent report does not attach a total dollar value to negative equity statistics but an analysis of the distribution of underwater home loans based on fourth-quarter 2010 numbers was published by the company last month which put the aggregate national net equity at $750 billion. The %age of underwater borrowers has declined only 4 basis points since that time.
- The average underwater borrower owes $65,000 more than their home’s estimated value.
- According to CoreLogic the states with the most significantly underwater mortgages did show slight improvement from the 4th quarter of 2010;.
- Home loan default rates increase with the level of underwater mortgages but not necessarily with the number of outstanding loans.
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