Archive for Refinancing Articles
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
Mortgage Refinancing with a 5 or 7 Year ARM
Posted by: | CommentsMost American homeowners have turned a deaf ear to discussions regarding mortgage refinancing with an adjustable rate. Clearly fixed rate mortgages have surged in popularity in recent years, but they are time when an ARM makes sense. Adjustable rate mortgages (ARM) are a very attractive option for homeowners looking to invest in a home. The interest rate offered on these types of loans are generally significantly less than what you would get on a 30 year fixed rate mortgage. However, the tradeoff is that the interest rate usually changes every year on the anniversary of your loan. This can be quite risky as you won’t know for certain if the interest rate will be higher or lower than your current rate. Even a change of as little as 1% can add hundreds of dollars to your monthly mortgage. Is the monthly savings worth the risk?
Is a 5/1 or 7/1 ARM Too Risky?
It depends on what your long term goals are. Although there are a number of ARMs available, many people consider 5/1 or 7/1 type of ARMs. A 5/1 ARM is fixed for five years and then the rate adjusts every year afterwards until the loan is paid off. The 7/1 ARM is fixed for seven years and then an adjustable rate for the other 23 years. For those that are considering refinancing a home loan, these may be viable options if you are anticipating interest rates will drop by the time the five or seven years have passed. The reality is that there are multiple choices for a fixed rate mortgage refinance with hybrid loans that blend fixed and adjustable rates over the term.
ARM Refinancing May Save You Thousands of Dollars a Year
They are also a good option if you plan on moving or selling your home prior to the mortgage rate becoming adjustable. For example, if you are planning on retiring in a few years and moving to another state, then refinancing at a fixed rate for 5 or 7 years can save you a significant amount of money in interest. As long as you sell your home before the fixed rate term is up, then refinancing your home loan may be worth the time and effort.
How much lower is the 5/1 rate than a 30-year fixed rate? It can be 2% or more less than a fixed rate mortgage which would result in several hundred dollars in savings every month. That is money you can use to pay off more expensive debt, such as credit card, or to put towards your retirement savings. Be aware, though, that refinancing to a 5/1 or a 7/1 does carry some risk. Namely, if you do not sell your home in time, you could get stuck paying a higher interest rate when your fixed rate term ends. Evaluate all of the elements involved in the refinance – interest rate, fees, terms – to ensure you are getting the best deal available. There are more choices today for the fixed 5 and 7 year loans with conventional, jumbo and a FHA mortgage refinance program. This makes selecting a hybrid refinance that much easier.
Most Common Reasons for Mortgage Refinancing
Posted by: | CommentsIn a recent article, Freddie Mac addressed the most popular reasons that homeowners refinanced their first or second mortgage.
- 95% of mortgage refinance loans carried a fixed interest rate.
- 32% of people who refinanced their 30-year fixed-rate mortgage opted for a 15- or 20-year term.
- 46% of homeowners who refinanced their first-home loan reduced their principal balance by bringing money to the closing table.
- 16% of homeowners grew their mortgage balance by at least 5% with a cash refinance.
- The average mortgage rate reduction savings was 22% in interest costs
When to Refinance
Posted by: | CommentsKnowing when to refinance your home is difficult if you are trying to time the market. Most homeowners try and play the interest rate game like the stock market when it comes to refinancing. They usually think that if they wait a little longer that the mortgage refinance rates will fall.
Unfortunately like the stock market, predicting the trend for interest rates is difficult and if you wait too long it can come back to haunt you. Millions of homeowners waited a day, week or month too long and never saw mortgage refinancing rate decline to the level they had hoped for.
If you are wondering when to refinance a mortgage, take a picture of your financial situation and compare your interest rate with the current refinance rates.
- Will refinancing save you money without adding years to your mortgage?
- What will mortgage refinancing cost you?
- Do you qualify?
- Can you document your income with W2’s and paystubs?
- What is your credit score?
- Do you have enough equity to meet the loan to value requirements for home refinancing?
Many people choose to refinance when they can lower their interest rate by a percentage point. If you have a jumbo mortgage, lowering your rate a quarter of a percentage point could save you thousands of dollars. So use a mortgage calculator online and do the math so you can make a sound decision on a mortgage refinance loan. You need to have a good idea about how much money you would save by refinancing. We also recommend looking at the big picture when shopping for the best loan. Remember that a FHA refinance will have a monthly insurance payment in addition to the mortgage payment, so make sure that you are looking at the big picture. Consider the costs and benefits of mortgage refinancing, before paying for a new appraisal and committing yourself to one lender.
Mortgage Refinancing After a Bankruptcy
Posted by: | CommentsMany borrowers with bad credit have learned the hard way how challenging mortgage refinancing can be after going through the bankruptcy process. Bankruptcy is a difficult thing to go through, and it has a number of negative repercussions that can be tough to reverse. However, while many people think it isn’t possible to refinance after a bankruptcy, this isn’t exactly true. Mortgage refinancing after a bankruptcy is possible, it just takes a bit of work and dedication. Here, we’ll go over some of the steps you’ll need to take in order to refinance after a bankruptcy, as well as how subprime mortgages can be used to your advantage in this scenario.
Finally Lenders Offering Refinancing Solutions for Borrowers After a Bankruptcy
The first thing you’ll want to focus on after a bankruptcy is restoring your credit. A bad credit mortgage loan can be obtained, but the lower your credit score, the more interest you will have to pay. Restoring your credit as much as possible should be a top priority. FHA loans, which are perfect for those that have gone bankrupt and want to start building good credit, have a minimum credit score requirement of 500. If you want an FHA home loan, the minimum score for a refinance loan is 580, although a direct endorsed FHA underwriter has the ability to make exceptions. FHA is great for refinancing and home buying, so learn more about how to buy a home with no money down and bad credit.
Mortgage refinancing after a bankruptcy is made easier by participation in certain programs that are designed to help those in exactly your situation. Once you have rebuilt your credit, you should work on finding a lender that is willing to work with you to refinance a mortgage after bankruptcy. Most of the lenders who are willing to do this are subprime lenders, and will charge higher interest rates and may even add fees. However, you do have the ability to do some comparison shopping, and find a lender that is willing to give you a fair rate. You do not need to take the first offer from a lender, either. There is often room for negotiation to make things work for you.
Save Money and Rebuild Credit Scores with New Bankruptcy Refinance Loans !
Once you have found a lender that offers post-bankruptcy options find out what their equity and credit requirements are. There are FHA and subprime lender willing to help you with mortgage rate refinancing, you can work on getting back on your feet. For many people, their mortgage is their biggest expense, so having a way to deal with this first is important after a bankruptcy. VA loans are also available to those that have been out of the housing market due to a bankruptcy, and can offer solid rates with low down payments. There are options available to you after bankruptcy, you just have to work for them.
No matter what type of loan you choose from, we recommend fixed rate mortgage refinancing, because you never know when the market changes for the worse. If you get stuck with a home loan it is important that it is a payment you can afford and a fixed interest rate ensures that the monthly payment will not rise.
The U.S. Department of the Treasury estimated that 8 to 13 million foreclosures will occur from December 2010 through 2012 unless lenders expand bad credit refinancing and note modifications for borrowers who are stuck with an option ARM loan or a variable rate mortgage. If you have exhausted all home refinancing options, consider mortgage relief. Many borrowers have had success with a short refinance or loan modification that essentially accomplishes the same goal as a refinance. The reality is that many banks would rather extend loan relief than go through with a foreclosure. Each lender has a different policy when it comes to foreclosure prevention and refinancing after a bankruptcy, so you will have to talk to an experienced loan officer before throwing in the towel.
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