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Refinance a mortgage at the right time and for right reasons

Are you stuck with increasing monthly payments and looking for favorable rates and terms on your loan? Or, do you want to consolidate your debts and pay them off faster? All these and more can be done by refinancing your mortgage. If you want to know what refinancing is all about, check out the following topics:
Do it yourself!

What is refinancing?

Refinancing replaces your current mortgage with a new loan that has a more favorable interest rate and terms that you can afford to manage. The new loan is secured on the same property as your current loan. The new loan funds are used to pay down the current mortgage while any remaining money can be used to your best advantage. [b]Example:[/b] Mr. X and Mr. Y both took out a mortgage loan worth $400,000. After 4 years, both of them paid off $200,000. Mr. X then took out another home loan worth $200,000 in order to repay the existing loan balance. On the other hand, Mr. Y took out another mortgage worth $300,000 in order to repay the unpaid loan balance which is $200,000. Mr. Y could use the remaining balance in order to fulfill other financial obligations. The first scenario is a simple refinance while the second is that of a "cash-out refinance".

5 Reasons why you should refinance

If you're thinking of refinancing your house, check out these 6 reasons why a mortgage refinance might be right for you.
  • You want to save more:
    Your monthly payments will be reduced if you get a lower interest rate or when the term of the loan is extended. However, with an extended term, you will be paying more in interest during the life of the loan.
  • You want to pay down your mortgage quickly:
    You can shorten the length of your mortgage by reducing the term of the loan. Your Monthly payments will go up, but you will be able to save more in interest payments. Moreover, you'll be debt free sooner.
  • You need extra cash to pay off credit cards:
    If you have enough equity in your home, you can refinance and borrow more than the current loan balance. With the extra money, you can pay off high interest debts such as credit card balances or installment loans. This refinance loan may be tax deductible under certain conditions.
  • You wish to consolidate 2 loans into one:
    If there's enough equity (due to high appreciation), you can consolidate a 1st and 2nd mortgage into a single mortgage. The monthly payment on the new loan might be lower than the combined payments on the first loan and the second mortgage.
  • You want to convert an Adjustable Rate Mortgage (ARM) into a Fixed Rate Mortgage (FRM):
    A FRM prevents the lender from increasing your monthly interest payments over the life of the loan, unlike with an ARM. This means your monthly payments will remain the same.
  • You want to keep your name in home during divorce:
    In case of divorce, you may want to keep home and at the same time and want your ex-spouse to be clear from mortgage payments. For that you should refinance the loan into a new one in your name only.
  • When to refinance a mortgage

    "Should I refinance my house now?" This is what most people ask when they're looking to reduce their mortgage payments by taking advantage of low rates. To find the answer, check out the mortgage refinance tips below:
    • Build up equity:
      You can refinance when you have built up at least 10% equity in your home (Fannie Mae owned mortgages, require 5% equity). It is possible for you to refinance if you have less than 5% equity, but you may have to pay a certain amount of money in order to make up the difference in equity.
    • Check if mortgage refinance interest rates are low:
      It's better to follow the 2% Rule. The 2% Rule allows you to enjoy the benefits of home refinance if the refinance interest rate is 2% lower than your current loan's interest rate. The savings in interest will help you recoup the costs of the new loan, provided you aren't planning to move soon (the break-even period). However, there are no-cost as well as low-cost refinance loans where the costs of getting the loan are included. However, these loans have comparatively higher rates than loans that do not include the refinance costs and your options are limited when the credit market is experiencing a slump. Learn more about the when to refinance rule of thumb. As always, compare mortgage refinance interest rates offered by different lenders in order to get the best interest rate. This will help you save more over the life of the loan.
    • Pay off any late payments:
      There is no such limit on the number of times you can go for home refinance loans. Most lenders prefer that you have no late payments in the last 12 months before you refinance.
    • Remove negatives and improve your credit score:
      Get your credit report from the bureaus and review it for any negative items (late payments, collections, etc) and inaccurate items. Dispute any inaccurate items and remove them from the report. Pay off as much of your debt as you can. Otherwise, you won't get a low interest rate and may not even qualify for a refinance loan. Of course, there are lenders in the subprime lending market who may offer you a mortgage refinance loan, but it's better to avoid them as they'll charge higher interest rates and fees and could be fraudulent.

      When not to refinance

      Refinancing is not a good idea if:
      • Your property value has gone down:
        If your property value goes down and you refinance up to 80% of the appraised value, your original mortgage amount may be higher than the amount you borrow. Therefore, the new loan will not be enough to pay down the existing one.
      • You have been paying off the first loan for a long time:
        If you are almost finished paying off a 30 year fixed mortgage, then refinancing is not a good idea. You will lose equity in proportion to the amount you borrow over and above the remaining loan amount.
      • You have used up enough equity:
        Refinancing is not a good idea if you have already reduced the amount of your equity by taking out a 2nd mortgage or a home equity loan. Refinance loans for 100% of the loan are rare, and with the mortgage market currently in a crisis, are hard to find.
      • You have a few years left on the current loan:
        If there are only a few years left on your current loan, then refinancing is not a good idea. Taking out a new loan will only put you deeper into debt just when you were about to become debt free.
      Refinancing makes sense for the right reasons and at the right time. You need to decide whether to opt for a simple interest rate adjustment refinance or a refinance that will provide you with extra money. If you'd like to check out what mortgage refinance rates and terms are currently available, request a no-obligation free mortgage refinance quotes from our community lenders and brokers.
      Related Readings
      Related Forum Discussions
      [b][/b][b][/b]

Are you burdened with rising monthly payments and seeking better terms and conditions on your mortgage? Or, are you looking to consolidate your unpaid debts and get rid of them faster? All these mortgage scenarios and many more can be accomplished by mortgage refinancing. To get the basic idea on refinancing, go through these topics:

Do it yourself!



What is mortgage refinance?

With mortgage refinancing, you can replace your original mortgage with a new one with better terms and conditions but the new mortgage should be within your affordable limit. The same property that you used as collateral to secure the original mortgage is used to secure the new loan also. The new loan proceeds are utilized to pay off the existing mortgage. In case there is any remaining money after paying down the original mortgage, that amount can be used to meet other financial obligations.

Example: Suppose each of the two borrowers A and B took out mortgage loan worth of $500,000. Again, say after 5 years, both A and B paid down $250,000. So, for both these borrowers, remaining unpaid mortgage amount is $250,000.

Borrower A then took out another loan worth of $250,000, so as to repay the remaining balance on the existing mortgage. This depicts a case of simple refinance.

Borrower B then took out another loan worth of $350,000. Out of this new loan amount, B used $250,000 to pay down the original mortgage. B could use the remaining $100,000 to meet other financial obligations. This describes a case of cash out refinance.

The first scenario is a simple refinance while the second is that of a "cash-out refinance".


5 Reasons that make refinancing sensible

There are some strong reasons which make mortgage refinance a very sensible move. Here we delve upon 5 of those -
  • To reduce monthly payment:
    If the mortgage rate is lowered or if the mortgage term is extended, your monthly payment amount gets reduced. With reduced monthly payment, you can pay off your mortgage with more ease. In case the term of the loan is extended, you have to however pay more in interest during the whole life of the loan.
  • To switch from ARM to FRM:
    Fixed rate mortgage (FRM) offers you the certainty of making fixed payment over the term of the loan. Whereas, in case of adjustable rate mortgage (ARM), the monthly payment amount may rise or fall, depending upon the prevailing mortgage rate. So, in case of ARM, the monthly payment amount is not fixed; rather it is uncertain. If you are looking for certainty in payments, then you can convert your existing ARM to an FRM through mortgage refinance.
  • To repay mortgage faster:
    If you want to pay down the mortgage early, then you can shorten the term of the loan. However, here your monthly payment amount increases. Here, over the term of the loan, you save more in interest payments. You also attain property ownership early.
  • To combine two loans into one:
    If you have adequate equity in your property, you can then consolidate your first mortgage and the second mortgage into a single mortgage. The main advantage of this type of consolidation is that the monthly payment on the single loan is less than the combined payments on the 1st mortgage and the 2nd mortgage.
  • To pay off high interest debts:
    If you have sufficient equity in your home, you can opt for a cash out refinance. You can use the remaining money to pay high interest debts such as credit card bills, car loans, installment loans etc.


What is the best time to refinance?

You may not always be eligible for refinancing or the situation may not always be conducive for refinancing. You have to time your move correctly so as to reap its benefits. You need to check out these crucial things carefully before applying for mortgage refinancing -
  • If you have built up equity:
    You may be eligible for refinancing when you have built up equity of at least 10% in your home. However, for mortgages owned by Fannie Mae, the equity requirement is 5%. It is possible to get the refinance approval even with less than 5% equity, but in that case you may have to pay a certain sum of money to compensate for the deficiency in equity.
  • If the refinance rate is sufficiently low:
    If the current mortgage rate is sufficiently lower than the rate on the original mortgage, then it may be wise to opt for refinancing. Here, you need to follow the 2% Rule. As per the 2% Rule, refinancing is beneficial for you in case the refinance rate is 2% lower than the rate on the original loan. Here, the savings accrued from low rate outweigh the costs of the new loan after a certain period of time, which is called the break-even period. To get benefits of refinance, you have to stay in the house at least till the break-even period.
  • If you have removed negative items and paid off debts:
    Before plunging into refinancing, obtain your credit report from the credit bureaus and review it carefully. If you find some negative items such as collections or late payments, dispute those items immediately and get those items removed from your report. Prior to refinancing, pay down as much debts as possible. All these will work in your favor in getting the refinance approval.
  • If you have no late payments in past 1 year:
    If you have history of late payments in the past 1 year, then your refinance appeal may be rejected. So, before refinancing, make sure you don't have any late payments in the past 1 year.


When refinancing is not a good idea?

Despite the fact that refinance has several benefits, it is not always a good idea to go for mortgage refinancing. There are some cases when your refinance appeal is rejected by the lender or it may not fetch the desired returns. Here are some cases when refinancing is not a good idea at all-
  • If the property value has declined sharply:
    If the value of your property has declined appreciably, the remaining balance on your original loan may be higher than the refinance loan amount. In other words, with the new loan proceeds, you won't be able to pay down the original mortgage loan.
  • If you have already used up your equity:
    Your equity is the key to get approved for refinancing. If you have already used up your equity by taking out a home equity loan (HEL) or a home equity line of credit (HELOC), then going for refinancing would not be a good idea.
  • If you have only a few years left on the existing loan:
    It does not make good sense to go for refinancing if you have only a few years left on your existing loan. It is not rational to refinance the loan which you have almost paid off. If you have almost paid down a 30-year fixed rate mortgage, then it is unwise to opt for refinancing. After all, refinancing is just like taking out a new loan and all the costs associated with taking out a fresh loan are applicable here too.
If you have the right reasons and if the time is right, then you can surely seek for mortgage refinance. However, before making the final decision, do the necessary research, take quotes from different lenders, make a comparative analysis and choose your lender.
Related Readings
Related Forum Discussions
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Refinance a mortgage at the right time and for right reasons.
Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I would like feed back from RUNGREN OR BLUE on the HOA Litigation and getting a refinance done. We have been dealing with TRYING to refi since Sept 1st, 09-the BIG hold up is the litigation thing. The loan has been approved this is the only issue. Should we just give up??

Like | Dislike | Share | Posted: Wed, 11/25/2009 - 08:10 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

PLS FORGIVE MY IGNORANCE, MY WIFE AND I N EARLY NON-CONTESTED DIVORCE, OUR NAMES ARE ALL DOCUMENTS, HOME PLUS HONE EQITY LINE CEDIT COME TO 370,000, NEGATIVE EQUITY >120,000; NEITHER CAN REFINANCE ALONE OR TOGETHER, WE BOTH TRUST EACH OTHER, NO MINOR CHILDREN CAN WE CONTINE DIVORCE CHANGE DEEDS/TITLE ONLY AND CONTINUE SAME MORTGAGE PAYMENTS? WILL WE HAVE TO INFORM LENDER? THANKS

Like | Dislike | Share | Posted: Tue, 03/02/2010 - 09:53 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi bonnie,

Unless your friend is 62 years old, he won't be able to qualify for a reverse mortgage.

Like | Dislike | Share | Posted: Wed, 03/23/2011 - 00:14

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I would like feed back from RUNGREN OR BLUE on the HOA Litigation and getting a refinance done. We have been dealing with TRYING to refi since Sept 1st, 09-the BIG hold up is the litigation thing. The loan has been approved this is the only issue. Should we just give up??

Like | Dislike | Share | Posted: Wed, 11/25/2009 - 08:10 | Post subject:

gregor212's picture
gregor212 | Joined: September 14, 2014 07:05 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

myself along with my brother & sister own a property in Michigan and my sister lives in the property left by our father. My sister wants to refinance the home and the bank is requesting that my spouse also has to sign on the mortgage even though she is not on the title. The bank says its Michigan law that requires a spouse to sign. My sister refinanced the home in 2006 and the bank didn't require my spouse to sign then. Is this a new Michigan law.

Like | Dislike | Share | Posted: Sun, 09/14/2014 - 19:10 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I concur - it's awfully difficult for a lender to look favorably at a loan request when the income situation is shaky. Lenders who might look at you are likely to be exorbitantly expensive.

Like | Dislike | Share | Posted: Thu, 01/27/2011 - 13:39

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

kevin, the only way to truly find out is to contact your first mortgage holder and ask them the question.

Like | Dislike | Share | Posted: Wed, 12/16/2009 - 12:12

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Jessica, Would I have any chance of refinancing? My first loan is $142,000, at 7.25%, and a bad second loan of $36,000 at 13.1%. My house is worth about $150,000, and I have never missed a payment. I know rates are much lower, and if I can make high payments, would an institute give me a chance at lower payments? Thanks.

Like | Dislike | Share | Posted: Wed, 07/14/2010 - 18:07 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Matt,

If you're planning to stay in the property for a long period of time, then it would be a good option to refinance the mortgage. Moreover, you should check out the type of interest rate you're getting. If it's affordable for you, then you should go for it.

Thanks

Like | Dislike | Share | Posted: Fri, 09/03/2010 - 00:57

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi BARRYJOHNKENT,

The borrowers will have to speak to local lenders and apply for a mortgage refinance. If they meet the required criteria of the lenders, then they will get a loan.

To Guest,

Once your name is removed from the property deed as well as the mortgage, then you'll be able to get a mortgage in your name for buying a home of your own immediately.

Like | Dislike | Share | Posted: Fri, 02/18/2011 - 00:58

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can I refinance my VA loan and have it changed to an FHA loan?

Like | Dislike | Share | Posted: Mon, 05/23/2011 - 02:55 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

If you want to refinance the loan, you will have to come up with some down payment. You should contact your friends and relatives and check out if they can help you by gifting you the money for down payment.

Thanks

Like | Dislike | Share | Posted: Mon, 08/30/2010 - 00:05

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

When would be a good time to consider a streamline refi with FHA?

Like | Dislike | Share | Posted: Tue, 10/13/2009 - 09:37 | Post subject:

jenny.smith's picture
jenny.smith | Joined: July 20, 2010 05:56 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

When you refinance, you can replace the existing mortgage, which is more favorable rates and terms that allow you to cope better with the monthly payments without a fight. Your house is used as collateral, and that this amount may not exceed the current balance you have.

Like | Dislike | Share | Posted: Wed, 07/21/2010 - 01:50

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Unknown,

If you have the required credit score and a stable financial situation, then you would be able to get a mortgage on your free and clear property.

Welcome nickieyes,

You won't be able to get the first time homebuyer's tax credit if you refinance the loan. You won't be considered as a first time homebuyer in this case.

Welcome anonymous,

As there is equity in your property, you'll be able to get a mortgage refinance and take advantage of the lower rates. If you've a very high interest rate, then it's a good option to refinance the loan.

However, if you don't plan to stay in the property for a long time, then you shouldn't go for a refinance. You won't be able to offset the closing costs that you pay if you leave the property within the next 3-4 years.

Like | Dislike | Share | Posted: Thu, 08/19/2010 - 23:53

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi!

Welcome to forums!

To tport,

If your sister's name is removed from the mortgage docs, it means that she is not responsible for the mortgage payment any longer. She needs to check out whether or not her name is mentioned on the property deed. If her name is there on the property, then she is one of the owners of it. However, if her husband has removed her name from the property deed, then she won't be able to claim any ownership in that property.

To Powers,

If you get a low interest rate, then you can refinance the loan. Thus, you will be responsible for making lower interest payments towards your mortgage. If you wish, you can even refinance it to a 15 year fixed rate mortgage. This will help you in paying off the mortgage faster and you will own the property free and clear within 15 years.

To Howie,

As far as I can understand, you don't have any equity in your investment property. In that case, you won't be able to refinance the loan to pay off the second mortgage on your primary residence. I would suggest you to contact both the lenders and apply for a loan modification.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Mon, 06/07/2010 - 23:54

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can I go to another bank to refinance my first mortgage? Both are currently from B of A. Apparently I qualify to refinance the first one only.

Like | Dislike | Share | Posted: Sat, 09/25/2010 - 19:25 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have a 30 year mortgage and have about 22 years left on the term. I would like to refinance for a lower interest rate. If I refinance does the term remainging remain the same, i.e. 22 years - or does the new mortgage term start over at 30 years?

Like | Dislike | Share | Posted: Tue, 10/19/2010 - 05:05 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

If you have equity in your property, then you can refinance the FHA loan with a conventional mortgage and rent the property so that you can move in with your spouse.

Thanks

Like | Dislike | Share | Posted: Sun, 02/20/2011 - 22:57

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

[font=Arial:d87d6146ff]I just got divorced and need to refinance to get my ex's name off the mortgage. Can I use my assets and gift monies from family to pay down my current mortgage balance for a refinance? Current loan is $573K, I would have to pay down to about $372K. Also, when calcluating the debt to income ratio do you take taxes and homeowners into consideration? I have no other debts.[/font:d87d6146ff]

Like | Dislike | Share | Posted: Wed, 03/02/2011 - 13:18 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

can i claim the first time home buyer credit on my 2009 taxes if i only refinanced my mortgage. thank you

Like | Dislike | Share | Posted: Thu, 08/19/2010 - 16:09 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Iwant to sell half of my home which is is paid in full,to ,my husband what is the best way to do it?

Like | Dislike | Share | Posted: Tue, 04/19/2011 - 05:48 | Post subject:

oswingrant's picture
oswingrant | Joined: March 13, 2010 02:16 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

[color=DarkRed:76cb71b742][color=DarkRed][/color:76cb71b742]Getting a refinance can be an exciting time, especially if you meet the requirements. However, not everyone will qualify for a refinance for many reasons. I mortgage loan modification can work out to be just as good or better than a refinance. Remember, there are not fees for a government mortgage loan modification. I blog about it a great deal at: mortgage crisis tips dot com . Do you think a you would do better with a modification or a refinance[/color]

Like | Dislike | Share | Posted: Thu, 06/16/2011 - 17:42 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi ekazor,

How long are you planning to stay in the property? If you want to stay in the property for around 8-10 years, then it would be a good option to refinance the loan. This will help you in offsetting the closing costs that you pay while you refinance the loan.

Thanks

Like | Dislike | Share | Posted: Sat, 07/10/2010 - 01:03

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

CAN I GET THE CREDIT IF I REFINANCED MY MORTGAGE

Like | Dislike | Share | Posted: Thu, 08/19/2010 - 16:14 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have a lien on my home from a previous [url=http://www.mortgagefit.com/home-equity.html]home equity loan[/url] from over 9 years ago. I filed bankruptcy in 2003 and I thought that this was part of my payment agreement. I never heard from this finance company again. Now that it has been discharged 2 years, I decided to refinance because I am at a 10.75% interest rate. A prominent loan company [b:e83f8d54e2]approved [/b:e83f8d54e2]me at a 4.50% FHA, I did $6000.00 worth of repair to the home to pass the appraisal. It was a refinance and consolidation with some cash out to help me cover the cost of the repairs. All set and signed, the underwriter found a lien against my property from this old finance company that I thought I had paid off through my bankruptcy. They told me to call them and check that sometimes they just don't remove them. I had in the meantime checked my bankruptcy paperwork and indeed I had made payments to them, but just what was in arrears. I did owe this money. I called the finance company back and got a 50% settlement amount and my new loan officer said they could finance it and pay it off with the new loan. The cash out would be less but I would be saving in the interest rate. Still all good until a few days later when he called me to tell me they would now not do the loan, the underwriter considered the lien delinquent. Keep in mind my loan officer had originally told me that my credit was good enough and that this debt was marked closed and paid on my report. Is there any way to have this refinance done with this lien factored in. I spent 6grand on repairs, If I had known that the lien existed I would have paid it off first, now I'm stuck.
help
Jeanette

Like | Dislike | Share | Posted: Wed, 06/29/2011 - 15:43 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Earle,

This point still holds value. Moreover, unless you have equity in your property, lenders will not be ready to refinance your mortgage.

Like | Dislike | Share | Posted: Wed, 11/24/2010 - 21:46

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

I recently got home using FHA 15 yr mortgage ( 4 months ago) for 3.75%, looks like there are chances of 15 yr hitting 3.125/3% in coming weeks. Even present rate of 3.25 % is tempting, my property value is arond 7% higher than the asking loan amount.
If i have refinance FHA loan, should i pay upfront cost ( i guess i paid around $3000.00 when i first took loan), how about monthly insurance, will it change and also i heard there need not be appraisal so can i do refinance for very low cost?

Like | Dislike | Share | Posted: Tue, 09/20/2011 - 08:29 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

you can consider it at any time.

Like | Dislike | Share | Posted: Tue, 10/13/2009 - 10:06

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hey. I have only owned my home for two years. My house appraises for $154000, and I still owe $143000. I got my loan at a 5.875% fixed for 30 years. I see that the national average is now 4.5ish. Would it be worth it for my to try to refinance? I have friends who have already refinanced, and say it was a great idea. However, the research I have been doing doesn't necessarily agree. I see that according to the payment calculators I could save a good bit, but I am unsure of all of the costs of refinancing. I am also unsure if I will qualify for those low rates. I just have no idea what to expect. And I don't know if I can trust my bank.

Like | Dislike | Share | Posted: Thu, 08/19/2010 - 16:31 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I owe 104K and I put it up in 2002 new. I'm waiting for appraiser but last year it appraised at 135K

Like | Dislike | Share | Posted: Sun, 10/17/2010 - 16:56 | Post subject:

dp45712's picture
dp45712 | Joined: October 15, 2010 09:58 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I owe 112K with a 2nd. It was appraised at 135k in 2009 and they wouldn't refinance it. NOw I'm trying to find someone other than my credit union to refin. But I have to have it reappraised!

Like | Dislike | Share | Posted: Sun, 10/17/2010 - 17:07 | Post subject:

Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Rates are going quite low and thus it is good time to refinance the mortgage. While you refinance your mortgage, your lender would be giving you the required documents. You should check the documents properly and be sure about the terms and conditions of the loan. Make sure to ask questions to the lender if you've any doubt. All these will make sure that there won't be any problems with your refinance.

Like | Dislike | Share | Posted: Wed, 04/14/2010 - 03:48

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I just bought a house a few months ago with the final purchase price after down payment of $77K I got a 5.35 30 year rate. Right now I could get a rate of 4.875 with a refi package costs of $375 plus title costs. Would I save money doing a refi right now after just closing?

Like | Dislike | Share | Posted: Wed, 11/25/2009 - 11:51 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I would like my dad to co-sign for my home loan. My question is how do I get him off the loan once I have bought my home. Should I transfer the mortgage, refinance...I'm not sure????? Thanks for any input.

Like | Dislike | Share | Posted: Sat, 05/22/2010 - 17:06 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi ram!

Welcome to forums!

As far as I know, the lender will want to appraise the property in order to know whether or not there is equity in it. You won't be able to refinance the loan without a property appraisal.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Tue, 08/17/2010 - 00:50

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Mandi!

Welcome to forums!

You won't be able to refinance your mortgage if you are delinquent on your mortgage payments. However, you can definitely try for a loan modification in this situation. This will help you in saving your property and it will help you reduce your mortgage payments to some extent.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Sun, 09/06/2009 - 20:35

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I found a new Obama Program that has been launched at foreclosurepreventionplan.com

Bad Credit ok

Hope this is helpful to somebody.

Free Grants And Loans… Bad Credit Ok!

Like | Dislike | Share | Posted: Wed, 10/28/2009 - 17:21 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rabin,

Do you have equity in your property? Unless you've equity in your property, it won't be possible for you to refinance the loan though you've excellent credit. If you meet the required criteria of the lender, you can go ahead and refinance the loan. As far as I know, the mortgage interest rates for second homes are similar to that of primary homes.

Like | Dislike | Share | Posted: Mon, 08/16/2010 - 00:18

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

dp, you will always find it more difficult to refinance mobile homes. There are limited numbers of lenders willing to assist; there is a limited secondary market, which drives all the interest rates; there is a reluctance due to the old mobile home markets, which too often consisted of trailers that were driven away before payment in full.

Lenders are nervous about them, in general.

I have to think that 5% is not a bad rate, inasmuch as they're willing to lend at all.

Like | Dislike | Share | Posted: Sun, 10/17/2010 - 19:50

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i bought a condo almost 2 years ago for 94000 at 5.5% rate. fha loan. is it worth refinancing for a 4.5% rate? im new at this stuff.. just kinda went for it. im not worried about making my payments... but just wondering if its worth doing so in the long run.

Like | Dislike | Share | Posted: Wed, 02/09/2011 - 22:36 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Sell to your husband? There's more than meets the eye here, methinks. Is this a separation or a divorce that you need to settle? Have either of you engaged the services of a lawyer for this purpose? Honestly, for you to get a fruitful answer here, you'll need to be a bit more specific about the situation, I believe.

Like | Dislike | Share | Posted: Tue, 04/19/2011 - 09:45

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi elva,

You should refinance your mortgage only when you get an interest rate which is 2% lower than your present rate. Also, you should plan to stay in the property for quite a longer period of time around 7-10 years. This will help you in offsetting the closing costs. If you plan to stay in the property for a longer period of time, then you can go ahead for a refinance.

Thanks

Like | Dislike | Share | Posted: Tue, 05/25/2010 - 22:52

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

sue, it's not easy to find lenders willing to help you with manufactured homes. the keys are as follows: do you own the land on which the home is located, and is the home on a foundation?

Like | Dislike | Share | Posted: Sat, 09/19/2009 - 08:07

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am in situation where property value has depreciated and I owe wore than 90% of the mortagage. What can be possibly done.

Like | Dislike | Share | Posted: Thu, 12/23/2010 - 14:27 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm thinking about refinancing and taking out 50,000.00 more, my mortgage would be higher but the payment would be the same, because of the lower interest rates, what are your thoughts on this

thank you

Like | Dislike | Share | Posted: Fri, 10/08/2010 - 06:57 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

TM, if that broker that surrendered the lending license two years ago is still trying to do business, then you'll apparently be able to use him/her; but of course, that would make the transaction illegal, as one must be licensed in order to do a mortgage. Why in the world would you want to try to go back to someone who's not even licensed to do the mortgage? That would also mean the broker is not cognizant of recent regulatory and secondary market changes.

Like | Dislike | Share | Posted: Tue, 02/08/2011 - 11:19

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm thinking about refinancing and taking out 50,000.00 more, my mortgage would be higher but the payment would be the same, because of the lower interest rates, what are your thoughts on this

thank you

Like | Dislike | Share | Posted: Fri, 10/08/2010 - 06:57 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Tommi, there'd be no reason why you couldn't apply for a cash out loan that would allow you to purchase a new property. What you need to keep in mind, however, is that lenders will want to be certain that the property you're refinancing is intended for your primary residence and will remain that way.

Can you say you're purchasing a second home? Yes, you can.
Can you say that when you're not actually purchasing a second home, but a new primary? Yes, you still can, but it won't be proper; and if you get found out, you'll be penalized.

Like | Dislike | Share | Posted: Tue, 02/08/2011 - 11:22

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have a second home in Las Vegas in which my son and daughter live and pay the mortgage but the house is in my name. I have never collected any rent on this home. I would like to refinance the loan on this house so as to reduce the monthly payments. I currently have a 30 year fixed loan at 6.5%. I have excellent credit. Should I refinance now? Are interest rates on a second home higher?

Like | Dislike | Share | Posted: Sun, 08/15/2010 - 12:28 | Post subject:

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