refi my house

CONSIDERING REFINANCING? THEN READ ON…

Taking a mortgage is not the end in financing. With the fluctuation markets, interest rates keep changing, whether it is hiked or dipped. So, you have the option of refinancing when the opportunity is available. With refinancing you can save a lot of money as the interest gets lower and you save on lower payments monthly.

To make up your mind whether you should refinance or not:

Changing from adjustable loan to a fixed rate:

• By having a fixed loan means that your payments will remain the same as you refinance on a low interest. Converting  ARMs to a fixed rate makes sense as fixed rate is more stable.

Fix your stay:

• How long you plan to stay in the same house reflects on the kind of refinance you should opt for. As you refinance even on a lower interest, you have to keep in mind that closing costs and fees would remain the same. If you plan to stay long   term in the house, then only it makes sense to refinance as the time needed to come at par will be longer.

Compare and fix:

• Before going in for a refinance, you should do your homework effectively. Read about the rates prevailing in the market, different deals of various lenders. Knowledge about all these will help you to get the best rates at lowest interest.

refi my house

Things To Remember Before You Refinance Your Home

Refinancing a mortgage can really be taxing. Keeping abreast of the intricacies of refinancing will be beneficial. You need to know the basic things about the deal, make a checklist before signing.

• Interest Rate

The interest rate will depend on the type of refinance mortgage you have chosen and on that basis monthly payments will be made. Taking an ARM will have an interest rate that will be fluctuating as it’s based on the market index. While a fixed rate of interest will give you security of a fixed monthly payments.

• Prepayment fines

Mortgage lenders put prepayment penalties because it is in their favor. If you will have a prepayment fine in your mortgage, you will have to give the lender the penalty for refinancing. Be aware of these clauses.

• Term of refinance

Term of the loan means the total time you have to repay the loan. Longer the term of the loan, lower monthly payments are there. With a shorter loan of 10 to 15 years gives you ownership faster, with lower interest monthly.

refi my house

Cash Out Refinance Is In

With cash out refinance you are simply taking a total refinance on the existing loan. Before closing this kind of a loan you should make sure the fees and closing rates are not more than a home loan. You should do real time calculations keeping in mind your refinance rate, your budget and the money needed for different things.

While refinancing, be careful that you are able to get a deal that will cost you less in terms of low interest and low closing costs and fees.

You can compare the existing loan with the refinancing and include the break in period while calculating.  You can take the help of a lender or loan company for it.

refi my house

Decoding President Obama’s Housing and Loan Modification Plan

If you’re like everyone else in America, you’ve probably heard about the President’s recently unveiled plan to help millions of homeowners to refinance or modify their mortgages.

However, despite plenty of news coverage, many Americans (and even a fair share of mortgage lenders and financial reporters) are still scratching their heads over exactly who the plan is for and how it works.

So we decided to ask Bob Walters, Chief Economist here at Quicken Loans, to help you decode the Obama housing plan and make better decisions about what to do next when it comes to refinancing.

Bob was one of the economists and banking leaders on the conference call when the government rolled out the plan on Wednesday, March 4, 2009. He’s been poring over the official documentation ever since. Today, he gives his run-down of what you need to know.

What Exactly is The Obama Housing Plan and Does It Benefit Me?
Bob Walters, Chief Economist, Quicken Loans

The “Making Home Affordable Plan” was created to help two groups of homeowners:

1. People who are making their mortgage payments, but were unable to qualify for refinancing in the past because they owe more on their house than it’s currently worth.
2. People who are at risk for imminent foreclosure.

Let’s take a quick look at what the government is doing for each of these groups. If you’re like 90% of Americans and have been responsibly paying your mortgage on time, you qualify for already historically low mortgage rates, and you can jump ahead to the third scenario.

Situation One: You owe more on your home than it’s worth.

If you owe more than your home is worth (also known as negative equity or “being underwater”), the new Obama housing plan offers a special refinancing program known as the Home Affordable Refinance Plan. (This plan is called DU Refi Plus™ at Fannie Mae and Relief Refinance^SM at Freddie Mac.)

This program will allow more than 5 million people who didn’t qualify for a mortgage in the past to refinance. To qualify:

• You need to have a Fannie Mae or Freddie Mac mortgage.
• You need to have satisfactory credit.
• You can now have up to 105% loan-to-value (meaning you can now owe as much as 105% of your home’s current value).
• You can’t refinance for more than the amount of the mortgage (no cash out).

A few other things to know:

• If your current loan doesn’t have PMI (Private Mortgage Insurance), then PMI will NOT be required on the new loan.
• This program differs from a “regular refi” by benefitting:
  • People who cannot qualify for a traditional refi because they do not have enough equity.
  • People who would have had to pay Private Mortgage Insurance with a traditional refi.

Situation Two: You are in default on your mortgage or in imminent danger of default

If you are having problems making your payments and are at risk of foreclosure, the plan provides a special loan modification program for troubled homeowners.

A loan modification is exactly what it sounds like – a lender modifies the terms of your original loan, typically to reduce your interest rate or payment. In this program, your mortgage rate would be reduced for five years.

Loan modification programs have existed for some time now, but have, in general, been failures. The government is trying to correct this by creating specific requirements and a more rigorous process behind loan modifications.

It’s important to note that the loan modification program in this plan is intended to help keep the most troubled homeowners in their homes. It is not for people who can currently pay their mortgages. The new requirements are very specific.

To qualify for a loan modification, you will have to:

• Prove in writing that you have a serious hardship that is preventing you from making your mortgage payment, or that your income has dropped significantly, or your rate or payment increased drastically.
• Document all of your personal expenses, income and assets, to prove that you are unable to pay your mortgage.
• Depending on your situation, you may be required to receive financial counseling as a condition of participating in the program.

A few other things to know:

• The loan modification doesn’t necessarily reduce principal, and if you sell or eventually refinance the house, you may still have to pay off the balance.
• If you’re in a situation where you are in default or at risk of default, it may help you keep your home by:
  • Reducing your interest rate (as low as 2%).
  • Extending the term of your loan up to 40 years.
  • Allowing you to forbear principal.

If you think you qualify for a loan modification, you’ll need to work directly with the servicer of your loan.

Situation Three: You can currently qualify for a refinance

If you’re like 90% of Americans who’ve been paying your mortgage on time, you can benefit from some of the lowest mortgage rates in history. The Fed has been taking action to keep rates as low as possible. However, their ability to control mortgage rates is limited.

If you held off pulling the trigger on a refinance until the details of the administration’s housing plan were made public, it’s time to revisit your mortgage right away. While rates continue to be low, they could change at any time, so waiting any longer could cost you money.

Bob Walters is Chief Economist at Quicken Loans, the nation’s #1 online mortgage lender, and is often quoted on mortgage and personal finance issues by media including CNN, Wall Street Journal, New York Times, USA Today, Reuters, Dow Jones, Bloomberg, MarketWatch, and others.

---

refi my house

CAN YOU REFINANCE A SECOND MORTGAGE WITH BAD CREDIT?

Though it is possible, it is not an easy process to refinancing your second mortgage with bad credit.

• Research on refinancing your second mortgage - Research on the rates of several different lenders. You may find that you are actually going to end up with an even higher interest rate, but with a lower monthly payment because the term of the loan is of several years. Your bad credit will also affect whether or not you get a better interest rate then the one you already have.
• Combining 1st and 2nd Mortgage -Combining your primary mortgage and your second mortgage into one can be a good option. By refinancing both mortgages, you can make one payment versus two payments and negotiate a lower interest rate with the lender. But keep in mind the number of years you plan to stay in the house, because if you were to sell your home, you would not be able to sell it for enough to pay off both mortgages .As with all mortgages, consider the closing costs, interest rates, any points you may have to pay.

Next Page »