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Mortgage Refinancing - All You Wanted to Know
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Rebuilding Credit to Get a Post-Bankruptcy Mortgage Refinance
Nationally, credit scores average somewhere between 600 and 800. In Hawaii, the average credit score is 688. If you have recently filed bankruptcy, your FICO score probably falls somewhere below 600, and maybe even below 500.
Though you can get a post-bankruptcy Hawaii mortgage refinance with your current score, you may want to try rebuilding your credit before refinancing to make sure ... Read mortgage refinance article
Fast Home Owner Loans - Advantages and Disadvantages
People may think that by finding fast home owner loans is easy and very fast, but they do not stop to realize that most people looking for these types of fast home owner loans, go with the first company they find and then regret it in the long run. The reason they regret it is because, they needed the money so bad, they signed papers, received their funds and never thought about what their interes... Read mortgage refinance article
Mortgage Refinancing - All You Wanted to Know
Refinancing your home is essentially a second mortgage, and is often referred to as such. People refinance their homes and take out second mortgages for many reasons: a lower interest rate on their home, large medical bills that need to be paid off, credit card balances, student loans and other high-interest debt. Refinancing can save hundreds of dollars a month that can be put towards other, pressing expenses.
Before refinancing, it's imperative that you shop around for the best deal possible. Research the market and find out what percentage the most current interest rates are at. If they are higher than or similar to your existing interest rate, wait until the market lowers to refinance. According to most mortgage experts, the best time to refinance is when the market percentage is at least 2 or 3% below the current interest rate on your home.
To put it into perspective, let's take an individual who has a 7% interest rate on their current mortgage, which is at $400, 000, payable over a term of twenty years; they are paying $3101 per month. Then the market drops to 3% and they refinance. They save $800 a month, and their total becomes only $2218 per month. The payment would be even lower ($1,686) if they extended the second mortgage to thirty years. From this example, you can see that refinancing your home can be an excellent way to save money and take a lot of stress off your pocketbook. A couple of the most common rate options for refinancing your home are the fixed rate refinance loan and the adjustable rate mortgage loan. If you're looking for a steady, slower fixed rate, consider a fixed rate loan. A fixed interest rate is ideal if you plan on being a long-term homeowner. This loan is typically spread out over a period of fifteen to thirty years and comes with a fixed interest rate that never changes, making it ideal for a family or individual who plans on long term habitation.
However, if you plan on selling your home within five years or so, you may be best off choosing an adjustable rate mortgage. This entails paying off your house quicker, as well as higher house payments, but it also saves you more money in the long run because you're paying less interest than you would on a ten or twenty year loan. Keep in mind, though, that an adjustable interest rate does rise and fall with the market, so it entails somewhat more risk than a fixed rate loan. To this end, make sure you talk to your lender in depth about this option and the market trend in the next couple of years.
If you decide to refinance your home, use common sense and do your research. There are many good rates and many good lenders, so take the time and find the one that best suits your needs. A great place to look for lenders and compare rates is the internet; there are a number of helpful sites with tools like mortgage rate calculators to help you get an idea of your options. Most online lenders also offer a free consultation, so don't hesitate to get a bunch of numbers and call.
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Mortgage Broker Refinancing Services
Mortgage brokers are scoundrels. They make the majority of their money by lying to you and marking up your mortgage interest rate. Despite this shortcoming, mortgage brokers can be an excellent resource for mortgage refinancing if you understand how they make their money. Here are several tips to help you outsmart your mortgage broker and avoid overpaying for your next mortgage loan.
Mortgage Brokers are simply retail vendors for wholesale mortgage companies. Your Mortgage Broker is compensated by the origination fees you pay for the new loan. Origination fees run around 1-1.5% of your loan amount and are more than ample compensation for your Mortgage Broker's services; however, Mortgage brokers mark up your mortgage interest rate to boost their profits.
The retail markup of your mortgage interest rate is called Yield Spread Premium. Your Mortgage Broker has absolutely nothing to do with qualifying you for an interest rate, although this person will claim they are getting you a fantastic deal. The interest rate you qualify is set by the wholesale lender. After evaluating the details of your application and your credit, the wholesale lender provides your Mortgage Broker with a written guarantee of that interest rate. Your Mortgage Broker turns around and gives you a separate written guarantee for a higher interest rate, all the while telling you what a great deal you are getting.
The more your Mortgage Broker marks up the interest rate, the more they are paid by the wholesale lender. Here is an example of Yield Spread Premium in action. Suppose your Mortgage Broker tells you that you've qualified for an interest rate of 6.75 when refinancing for $225,000. What your Mortgage Broker isn't telling you is that the wholesale mortgage lender qualified you for an interest rate of 6.25%. The additional .50% is going to cost you thousands of dollars in unnecessary interest, all because your Mortgage Broker lied to you.
Mortgage Brokers mark up mortgage interest rates because the wholesale lender pays them a bonus of one point for every .25% they get you to overpay. In the previous example, your Mortgage Broker received $4,500 on top of your origination fees of $3,375. Can you see how paying retail markup results in paying double for your new mortgage? How can you avoid paying Yield Spread Premium to your Mortgage Broker?
Ask to see the interest rate guarantee from the wholesale lender. Tell your Mortgage Broker that you will pay 1-1.5% in origination fees and reasonable closing costs but will not pay Yield Spread Premium. If your Mortgage Broker refuses to show you the guarantee, find another broker. You can learn more about mortgage refinancing, including costly mistakes to avoid by registering for a free mortgage tutorial.
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8. Mortgage Refinancing - Comparison Shopping
If you are a homeowner considering mortgage refinancing for any reason, comparison shopping will help you find the best loan. Many homeowners mistakenly assume that by choosing the loan with the lowes... Read mortgage refinance article
9. Mortgage Loans And Financing
When Should You Refinance Your Mortgage? There are two primary reasons to refinance a mortgage: to get a more desirable rate and terms or to extract cash from the home's equity. Both of these reasons ... Read mortgage refinance article
10. Avoid Overpaying for Your Next Mortgage Loan
Never heard of Yield Spread Premium? You're not alone; the majority of homeowners in the United States pay this unnecessary markup of their mortgage interest rate and never even know it. Here are seve... Read mortgage refinance article
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Mortgage Refinancing - All You Wanted to Know
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