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Refinance a mortgage at the right time and for right reasons

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
lisa.scherzer's picture
lisa.scherzer | Joined: January 4, 2008 08:48 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Lori,

How much do you owe on the first and second mortgage? Also, what is your home worth? These two factors will help me narrow down your options.

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larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Lori,

Welcome to the forum.

You need to answer first the questions posted be Lisa so that we can give you an answer.

As you are already "on a forbearance agreement with the first lender ' and you have said "my credit is the worse" so do you really want to refinance the mortgage or can you really afford the house any longer? Think about that. As your credit is not the bests, you will not be approved for the bests of rates and terms.

Best of luck,
Larry

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

I am refinancing my mortgage so that I can renovate my home. But I don't have enough equity to cash out as much as is needed for the repairs. So I was just thinking of taking out a loan from 401k. should I refinance after taking out 401k loan or simultaneously? I have good income and understand that there are risks associated with borrowing from 401k. I would borrow maximum $25000. pls advise

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larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jess,

Welcome to the forum.

If you can take out a loan of 401k, then it is all right. In that case you need not to refinance. You can refinance if you have just take the loan within 2 to 4 years and also you are getting a better rates and terms.

So how long have you taken the loan? How much equity do you have?

Best of luck,
Larry

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

jess, the biggest risk you run in borrowing from a 401(K) is that doing so is a little too easy for some. in other words, once you've borrowed, you might be tempted to go back to the well again.

as long as you repay that loan in short order, your risk will be negated. i think your plan makes sense, frankly.

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

My wife and I will be signing on the divorce papers. We don't have children but there's a house we own together and I have agreed to let her keep it.she has been staying there ever since we separated in sept 2006. the divorce papers state she should be able to refinance by the end of august, that too in her name only. But she is unable to refinance due to bad credit. if she is not able to do so, what will happen to me? Say if the house goes into foreclosure, will it be reported by the CRA for 7 years or will the court automatically free me from the responsibility of paying off the loan in case she doesn’t get a loan? I’m getting mixed views from my lawyer and the mortgage company? So any help will be highly appreciated.

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

Welcome Dave.

If your wife cannot refinance on her name and defaults then it may also affects your credit. Why doesn’t your wife request the lender for navation? If you, your wife and the lender agree then the mortgage can be transferred to your wife's name through [url=http://www.mortgagefit.com/know-how/novation-mtg.html]novation[/url].

Let me know if you have any further questions.

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

Is there a place in Texas that would help me refi my loan so that I wont go into foreclosure or start being late with the payments? I am not late at all but the payments are high because I got the house from an investor and I am at 10.5% and my credit is in the 570's. This is my first home and I dont want to lose it. Help me help myself. Thanks

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larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi rjones.

Welcome to the forum.

The interest rate is really very high but you credit score is not too good. And you have also made late payments recently. So you will not qualify for FHA loans. And because of the credit crunch the lending criteria got tightened.

But anyhow you should shop for the lenders to see where you can get approved for mortgage or not. You can even go for No-obligation free consultation with the community professionals to know whether you can refinance the mortgage or not.

Hope this helps. Feel free to ask if you have further questions.

Best of luck,
Larry

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

We had a first and currently have a HELOC. We had our family trust payoff our first mortgage then right after we had the trust take out a mortgage on our property to cover the payoff. Does that now mean the HELOC moves into first postion and the replacement mortgage is now in 2nd position?

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Lizziebc,

Welcome to the forums.

The Heloc should be considered to be in the first position unless you subordinate it with respect to the replacement loan.

take care

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

5 years ago, I bought some houses and condos, as I was working for a US company.
Since 3 years I have no US job, working in Europe and need to refinance my existing houses.
Bank knows that I gain enough money but need to see my US tax returns.
In USA I am writing tax returns only for the rental income what I have in USA and it is not great
Bank do not approve my refinancing (50% value of my primary house).
What can I do ?

thanks

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

I think you sell off the houses if you're not able to manage the loans or refinance them. An experienced realtor will be able to help you in this regard.

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

My wife and I are in an extremely bad financial situation. We are a month behind on our mortgage, along with a few other bills we filed chapter 7 last year in october. We fell behind in june and havent been able to catch up. We make enough money monthly to pay all of our bills on time if we stick to a budget. the problem is we cant stay on the budget when we are trying to catch up. I was wondering if you know how possible it would be for us to refinance and get cash back. the value of our home is definatly worth more than whats left on the mortgage

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lisa.scherzer's picture
lisa.scherzer | Joined: January 4, 2008 08:48 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

It doesn't seem realistic to go for a refinance since most lenders require at least 2 years out of bankruptcy. Your best solution is to contact your current lender and ask for a loan modification or payment plan. Most lenders are bending over backwards to work something out with you since they don't want to have to take the house back. I'm sure they will come back with something that will work for you to get back on track.

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

My wife and I bought our house back in 2005 and in 2007, I lost my job and couldn't land one. We couldn't afford the payment any longer. The value of the house dropped almost 50%. Is there anyway way to lower our mtg payment? We very much love to keep the house as we have invested so much in it. If we refinance it under the current value, what will happen to the difference of the original loan?

Thanks,
Roland
p.s. I wish I had a piece of that bailout money.

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Roland!

It is the discretion of the lender whether he will lower the mortgage payments or not. As you do not wish to sell the property, you can easily go for a loan modification offered by the lender. You can speak to your lender regarding that.

Thanks,

Jerry

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

Thanks for the info, Jerry.

We are not behind in our mtg payment as of now but it won't be long before it happens. It's just my wife working. Do you think the lender will entertain our plea for loan mod? We really value our creditworthyness and trying to avoid late payments before working on any options.

Thanks again for any help.
Roland

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

Hi Roland!

If you have genuine reasons then the lender will definitely agree to go for a loan modification with you. You can speak to the lender about the options he can offer you.

Thanks.

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

What is [b:56cd21a297]QROPS[/b:56cd21a297] ? I want to know more about it's benefits and whole process of a personal pension scheme. Please help me.

Thanks

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

Hi QROPS,

QROPS stands for Qualifying Recognized Overseas Pensions Scheme. It is a specific pension which is available to expatriates and anyone contemplating living or retiring abroad. If you are a US citizen or a US resident, then the QROPS benefit will be mostly unavailable to you, but citizens of other nations can apply.

For British applicants, it is a scheme set up outside the UK but is regulated in the country in which it is established. This must also be recognized for tax purposes in the country in which it is established. Once the pension plan has been transferred into QROPS and you are a non-resident for at least 5 years, then your QROPS provider has no obligation to report any action to the UK tax authorities. If the QROPS provider is situated in a country where payments in such schemes are paid tax free – then you can enjoy the pension related income without the deduction of tax.

Thanks.

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

In order to take advantage of my husband's 100% Veteran Disability property tax break, i.e., we do not have to pay property tax since he is at 100% permanent and total however his name must be on the deed/title. I purchased my house 17 years ago, we only married 7 years ago. 2 yrs ago we did a SRR and he signed papers with the mortgage company, however I was told a [url=http://www.mortgagefit.com/quitclaim-deed.html]Quit Claim Deed[/url] would be sufficient to add him so we can file for the property tax break. Does anyone know if this is the case. I would think so, but just want to make sure.

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

In order to take advantage of my husband's 100% Veteran Disability property tax break, i.e., we do not have to pay property tax since he is at 100% permanent and total however his name must be on the deed/title. I purchased my house 17 years ago, we only married 7 years ago. 2 yrs ago we did a SRR and he signed papers with the mortgage company, however I was told a Quit Claim Deed would be sufficient to add him so we can file for the property tax break. Does anyone know if this is the case. I would think so, but just want to make sure.

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

Hi smcgovern!

I think your lender is correct in saying that you should use a quitclaim deed to add your husband to the property. You can get quitclaim deed forms online but you can also take the help of an attorney to draft one. To know more about quitclaim deed, check out the link:
http://www.mortgagefit.com/quitclaim-deed.html

Thanks

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

I am 52 and know that I will never pay off a 30 yr loan and do not have the optimism to think that I will live past 70. Anyway, I need about $30,000.00 cash out to pay off high interest debt. This inturn will not give me 20% equity anymore. I need debt consolidation; FHA Refinance? I will put a lot of money out(closing, FHA premiums, etc.) but will save money over the next 10 or 15 years. However, I will be paying a higher monthly house note for 30 years. I will be more open toward the rest of my 50's and early 60's BUT will continue this higher note unitl my death. I am worried that my wife will not be able to pay this house note if I die. I do not or Cannot get enough insurance to cover the monthly mortage?? Do I refiance at the same rate(I have 6.00% now) and cash out the money and pay all of the closing fees and 1 point to the lender(permanant mortage insurance also) I will be saving about 600.00 per month initially BUT will pay this higher house note(by refinancing at 6.00%) for the rest of my life. You must know that I do not feel as if I am going to live to 82 NOR do I care. My retirement from the government in a year or two will be about $5,000.00 a month clear and my house note will be about $1500.oo per month with everything included in it.???????

oi

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Joseph LaNasa!

As you are planning for a cash out refinance, I don't think there is any need to go for a debt consolidation separately. A cash out refinance will help you to solve the issues that you may be facing. You can definitely get FHA refinance provided you meet the terms and conditions of the getting an FHA refinance loan.

To get a FHA cash out refinance loan:

  • You should not be delinquent under the terms and conditions of their current mortgage.
  • The property should be owned by you as your primary residence.
  • The loan amounts cannot exceed the maximum loan limits for the area.
  • The lender will check your credit and your credit should match the requirements of the lender.

You can try for refinancing at the same rate but as you are looking for a cash out refinance, there are chances that the interest rate and the payments may increase and it can be a bit higher than the usual refinance rates.

This community also has a number of lenders who can help you as well. You can seek a no-obligation free mortgage quote from them. This will help you to know about the rates that you may get. Thus, you will be able to compare the rates and choose the one which you can afford.

Thanks,

Jerry

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

I have tried to refinance but I am self employed. This makes it very difficult. There seem to be different rules. I have not missed a payment but live on the edge of possible miss. Who takes on these types of loans and could I get a good rate? My rate is now 6.75.

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

Hi aloneymous

As far as I know, it is not impossible to get refinancing but it is difficult to get. More documentation is required if you are self employed and seeking refinance. You can consult other lenders as well and check what they are saying. It is not mandatory to refinance the mortgage with the same lender.

This community also has a number of lenders. You can speak to them and seek a no-obligation free mortgage consultation from them. This will help you in comparing the market rates and you can select the one you can afford.

Thanks

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

I wish to refinance from a variable rate to a fixed rate. I also wish to shorten the term of the loan. I've been in my home with excellent credit for 16 years and often have doubled my payments to whittle down the principle. Unfortunately, the balance of my current loan is "too low" to refinance. Most companies will not even consider a refinance with me unless I borrow more. Why do I have to be further in debt to qualify for a refinance?

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jane,

Lenders generally don't prefer to offer refinance for a loan which has too low balance. They generally prefer refinancing when the loan balance is higher. They do this because of their benefit. It is not that you have to further in debt in order to qualify for a refinance, but the lenders feel it is very time consuming for them to approve the loan and go through the closing for a very small amount of loan.

Thanks,

Jerry

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

my home is paid for. . I'm paying a car note ,but i need funds to renovate my home,can i refinance car note and get extra moneys,I need about 10,000 dollars :cry:

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

Hi Pauletten!

You have mentioned that you need funds to renovate your home. In that case, you can take a home improvement loan. As far as car note is concerned, you will be able to refinance it. But you will have to inform the lender that you will use the money for home improvements.

Thanks.

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

I'm a first time home owner. I've been in my house for a little over 3 months. My interest rate now is 6.75%. I've recentyl seen where rates are somewhere around 5.3-5.5. I have perfect credit with little to no other debt. Can someone give me a few options on refinancing? Am I able to now? My mortgage company has not returned any messages.. frankly, they have not been a bit of help since they got my money!! I feel lost and alone. Thank you for any help.

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eric1's picture
eric1 | Joined: January 4, 2009 03:52 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

You may have to wait another three months because most banks will not allow you to refinance for six months. In addition, if you have good credit and you got a rate of 6.75% three months ago from your current lender, then I would suggest that you try a few other lenders as well. That rate seems a bit high three months ago.

Eric
"http://www.dreamhomefinancing.com"

[color=Red:2d09c3e813][size=9:2d09c3e813][Link deactivated as per forum rules. Thanks.][/size:2d09c3e813][/color:2d09c3e813]

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

I have a first mortage loan and a fixed [url=http://www.mortgagefit.com/home-equity.html]home equity loan[/url]. Can I refinance just the home equity loan? The first mortage already has a good rate.

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

Am I imagining it or do some of the fees associated with refinancing seem like a borderline scam? It seems like the borrower should have more control of this. I.e., why couldn't we compare rates from the various providers to get the best value instead of having the banking "professionals" co-opt this and just bundle thenm together as-is?

Also I wonder, do the fees change at all based on how long it's been since the last time that a mortgage was financed?

Thanks (and sorry to seem so negative, but even to do a re-fi, it seems like I engage this huge juggernaut, when the Title search, etc was all done just last spring)

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

Hi,

To Tom H,

As far as I know, yes, you will be able to refinance the home equity loan. You do not need to refinance the first mortgage.

To anonymous guy,

You definitely have the option of comparing the mortgage rates before refinancing the property. I don't think the fees are based on the fact as to how long it's been since the last time that a mortgage was financed.

Thanks

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

I live in 92882 zip. I owe $105,000 on my property. It is now worth approx $300,000. My current rate is 6.5. I'm looking for the best rate with the a low cost to me. Thank you "memster2you2@aol.com"

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

Hi Theresa

You can check out the option of refinancing with your current lender as well as other lenders. This will help you in knowing the rates and terms available in the market. I would suggest you to do some mortgage shopping before finalizing the deal with a lender. You can also speak to the lenders of this community and seek a no obligation free mortgage consultation from them. They will tell you what type of rates and terms you might get.

Thanks.

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

Has anyone heard of any lenders that offer a "one-time privilege rate adjustment", without closing costs, when refinancing a home loan, when the homeowner has just owned the home for a few (three) months?
I am trying to refinance without paying any closing costs. Do ALL refis require closing costs? Thanks.

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

Welcome JustCarl,

As far as I know, all refinances require closing costs. Well, I haven't heard of the "one-time privilege rate adjustment". Did any lender offer this to you?

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

I am in year 2 of a 10 year mortgage on a 2005 Mobile Home. My current interest rate is 9.3% and I am looking to lower that with a better interest rate. I have improved on the home and plan to build a garage this spring. Is it possible for me to refinance?

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

I am refinancing my house, but the house value appraised to less than what I bought the house for (a little more than what I currently owe on the house, but not by much). Does it make sense to still refinance at a lower interest rate (and very low closing costs) or will it hurt me in the long run - particularly when I sell the house in the future? Does it affect the price I want to put on the house when I put it up for sale in a couple of years?

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

Hi MKA

As the appraised value of the property is less than what you bought the house for, I doubt whether the lenders will refinance the property. I do not think a refinance will affect the price of the property when you try to sell it off in the market.

Thanks.

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

Hi, I want to refi- I got in touch with a mortgage Co. and was told that all I needed was the award letters from both my son and I and my grandson, we all live in the same home. I produced them, and then the Co. said that I needed a letter from social security saying that they were permanant disabilitys, I got in touch with them to let them know and their response was this, They said that the award letters should be enough, that they have never given anything like the Co. is asking for. I explained this to the Co. and they would not except this. They now want me to go to a Dr. so that he can write a letter stating that the disabilitys are permanent, I explained to them that that is not possible, since the disability came into existance, 9yrs. ago. and the social security office is the only one that makes that kind of dicission, I have never heard of such a thing, have you?

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yoovle | Joined: January 23, 2009 04:08 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Cay, the interest rates now are a lot lower that your 9.3%. But I think that the best thing is to ask in your bank.

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

I recently got a great paying job and I still live with my parents I pay the light bill and the cable bill.They recently told me they want to refinance their home again.WILL it ruin my credit if I sign any paperwork stating how much I make so they can lower their monthly payment, my credit is not great but I have my own bills I need to pay off like loans for school expenses. how will my credit score be affected?

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Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

[i:d7b08b04f0]To lillypad[/i:d7b08b04f0],

I think you should not deal with this company. There's something fishy about it. The social security authorities are quite justified. Better look out for some other company. If interested, you may have a talk with the lenders in this community. They have been helping people with low income and disability with loans that serve their purpose. Just go for a [i:d7b08b04f0]no obligation free mortgage consultation[/i:d7b08b04f0] with the lenders here and see what they have to say about your options.

[i:d7b08b04f0]To Not trusting[/i:d7b08b04f0],

What I understand is, your parents probably want you to act as a cosigner of the mortgage. That is, you have your name on the loan but you don't make monthly payments. Only when you parents default, you'll be asked to take over the payments. Just being a cosigner won't affect your credit in any way as long as payment are made on time.

Good luck

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m.snover92571 | Joined: February 10, 2009 09:53 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

wonderful post!! good information

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

I did a "no-cost" refinancing and the principal balance of my new loan is higher than the closing principal balance of my old loan. Shouldn't they be the same? I get a month with no mortgage payments before my new loan starts but even if I figure that in my new balance is higher than my old one.

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