Archive for Refinancing Articles
No Equity Mortgage Refinancing Solutions
Posted by: | CommentsUnfortunately, many homeowners have no home equity and have been unable to qualify for a mortgage refinance loans that would save them thousands of dollars a year in interest. The reality is that not all borrowers are able to meet the 2011 refinance guidelines with FHA and conventional lenders. With refinance rates falling to 50-year lows a few months ago, many homeowners are kicking themselves for not seizing the opportunity that refinancing presents with lower monthly payments.
The most common factors that contribute to borrower’s inability to qualify for home refinancing in 2011 is bad credit scores, lack of equity and insufficient income.
Most homeowners have gone the traditional route only to be turned down for a logical refinance loan that would lower the borrower’s loan payment and increase the likelihood that they won’t default on the mortgage. There are several mortgage relief programs that have helped distressed homeowners successfully reduce their mortgage payment. The Home Affordable Refinance Program is a unique loan solution that enables homeowners to qualify for a 125% mortgage refinance. This is a rate and term program that allows refinancing with no cash out or debt consolidation options, but certain restriction apply. The HARP program enables qualified borrowers to get approved for fixed rate mortgage refinancing. If you have a second mortgage, the 2nd lender must agree to subordinate the lien.
Borrowers Must Meet the Following Home Affordable Refinance Program Qualifications:
- The owner of a 1-4-unit home with a mortgage owned or by Freddie Mac or Fannie Mae.
- Borrowers cannot be currently delinquent on their mortgage
- Borrowers cannot have been more than 30 days late on a mortgage payment in the last year
- Borrower must be able to document the ability to afford the proposed refinanced payment
- The refinance loan cannot exceed 125% of the value of your property.
- Borrowers must have at least a 620 FICO score
Don’t wait any longer because the Home Affordable Refinance Program expires at the end of June 2011. Talk to a loan officer today and reap the benefits of a no equity mortgage refinance.
The Art of Home Refinancing
Posted by: | CommentsWhen home refinancing, consumers are always looking for the lowest refinance rates, lowest costs and of course completing their transaction at the best time. Timing the home refinancing market is difficult. Especially when you have had three years of record low rates and the trend for higher mortgage refinance rates seems to have set in.
We recommend the following refinance tips for borrowers looking to maximize the best refinance rates during any type of market.
1. Keep your credit scores above 700. This will give you more options and enable you to always qualify for the lowest refinance rates. Pay your bills on time and keep your credit card balances below 30% to maximize the best possible credit scores. You don’t need more than 5 trade lines so don’t be afraid to close down some charge cards at department stores that you are not using.
2. Avoid a refinance loan with a pre-payment penalty. By avoiding getting a loan that doesn’t charge a penalty for selling your home or mortgage refinancing maximizes your flexibility to take advantage of lower market rates.
3. Keep an open mind to conventional, VA and FHA loan programs. Home loan products change all the time so be open to a variety of home refinancing and chances are you will be rewarded with the best rates.
4. Strive for No Cost Refinancing – People like to think they will keep the same loan for 30-years but in reality most people are refinancing for cash out or lower rates every two or three years. Therefore no closing cost mortgage refinancing will save you more money.
Will Mortgage Refinance Rates Fall Again?
Posted by: | CommentsIn a recent article published by mortgage lead generation specialist Bryan Dornan, we learned some insight as to why some many consumers haven’t completed a mortgage refinance in December when rates fell to a 50-year low. Dornan and Moran point to 2 basic reason people haven’t refinanced or pulled the trigger on buying the home they want. The first reason is that many consumers really think that the home purchase and refinance will actually fall again this year. The second groups of people are nervous because they were recently rejected for home mortgage refinancing. Bank of America’s Jeff Moran said he feels it is too risky for homeowners to believe that mortgage rates are going any lower. Read the original article written by Bryan Dornan > Getting the Lowest Mortgage Rates
3 Great Reasons to Refinance Your Home
Posted by: | CommentsWith record low interest rates, mortgage refinancing has been a hot topic in the news, but should all borrowers refinance their home? According to Lenders Nationwide and the Lending Low-Down, there is a time for borrowers to refinance and times when they should pass.
Refinance and Save
1. Refinancing to Lower the Interest Rate: With mortgage refinance rates at 50-year lows, there is certainly a good opportunity for most homeowners to save money with reduced interest rates. Today’s mortgage rates for those with the best qualifications are often under five percent. Borrowers who have been strapped with a bad credit mortgage may uncover some serious savings if they have increased their credit scores and have no pre-payment penalty for refinancing. will likely be financed at a higher interest rate, the rate may still be lower than your current mortgage rate.
2. Lowering Monthly Home Loan Payments: If refinancing cuts your monthly mortgage payment and provides you a “hard money savings” it typically makes sense financially. This is usually the bottom line for homeowners. Will refinancing cut your loan payment significantly?
3. Refinance to Shorten the Term of the Loan: If you are able to reduce the years you are paying on your mortgage without increasing your monthly payment much, then this is a worthy benefit that clearly justifies the cost and hassles of home refinancing. For example, if you have took out a 30- year mortgage two years ago at 6.5% and you refinance into a fixed 15 year loan at 3.875%, your monthly payment will go up slightly but you would be paying off your home 13 years earlier than you would with your present home loan.
New Options for Refinancing a Mortgage
Posted by: | CommentsThere are a lot of people offering mortgage refinancing advice online, but very few publishers have experienced home lenders on staff posting articles like Mortgage Refinancing Buzz. Most refinance lenders have tightened their guidelines, so very few homeowners qualify for record low refinancing. Therefore it is more important than ever to get insight from lending professionals that stay up to speed on breathrough loan products and government mortgage relief.
Refinance Recast or Re-Amortize Your High Rate Mortgage
Many homeowners who have already refinanced and locked into low rate home loans are using a new somewhat unknown strategy to reduce their monthly mortgage payments. Rather than home mortgage refinancing, this process is called “recasting” or “re-amortizing “and enables borrowers to reduce loan payments on an existing fixed-rate mortgages for a small fee without having to apply for a new home loan and without having to pay reappraisal and other fees. Recasting also may enable homeowners to save on interest paid over the life of the home mortgage, merely by putting a large sum of cash against the principal, whether or not they have refinanced already.
The bad news? Banks don’t advertise the strategy, perhaps because it is less lucrative than refinancing a mortgage. And not all loans are eligible. To find out more, you will have to ask your lender directly.
At J.P. Morgan Chase & Co.’s Chase Home Finance unit, less than 200 home loans a month are recast out of 10 million home mortgages outstanding, a spokesman says. At Bank of America Corp., about 200 to 300 a month recasting requests are received out of about 14 million home loans serviced by the company, a spokesman says. Neither bank has seen increased demand. Here is how it works: A homeowner asks his mortgage servicer if he can put a large sum of money against the outstanding principal on the mortgage. Ordinarily, doing so would enable him to pay off the loan early, but he would still have to pay the same monthly note. But if the lender agrees to recast the mortgage, he may be able to reduce the monthly payment over the remaining term of the loan. For example, a person with a 30-year $300,000 fixed-rate mortgage and an interest rate of 4.75% who re-casted one year into the loan by putting in $60,000 toward the principal would trim his balance to $235,371. Assuming there were 29 years left on the mortgage that would result in a monthly payment of $1,247 instead of the original $1,565.
Recasting can be a good choice for borrowers who have cash and want to reduce monthly payments but who can’t get approved for a mortgage refinance, such as those with a no income mortgage, most of whom can’t get the same types of home loans today due to tighter regulations, even if they have high income and good credit. (Self-employed professionals often find themselves in this boat.) And at a time of low interest rates on certificates of deposit and U.S. Treasury bills, paying off a mortgage early is a relatively safe investment that brings a return at least equivalent to the interest rate on the mortgage itself. There are downsides to the strategy. Many financial experts advise against putting additional cash into one’s residence, arguing that higher returns historically have been available in the financial markets and interest rates on bonds are likely to rise eventually. They also warn of the possible tax consequences of retiring a mortgage early, because mortgage interest on a primary residence can be tax-deductible.
Mortgage recasting resembles a cash out refinance, a newly popular strategy in which a borrower pays down principal on an existing loan in order to qualify for a new loan with a lower interest rate. In a recasting, though, the interest rate and the number of payments remain the same, and there are no transfer and title costs. Getting permission to recast a loan can be tricky. The loan must be in good standing, and you need to secure permission from the loan servicer, who may or may not be the original lender. If the loan has been sold to an investor, the servicer also must secure its approval. Original article was written by M.P. McQueen.
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