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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($)

We have a 15-year mortgage at 5.25%. For the last several years we have been paying extra on the principal, and at our current rate of payment (with paying the extra on principal), our loan is scheduled to pay off in December, 2016. We always hear that you shouldn't refinance this close to payoff, but with interest rates at 4%, we have wondered if it's worth our while. If so, what do we look for? Do we take out another 15-year loan? We want to keep our payoff no later than December, 2016. Thanks for your help!

Like | Dislike | Share | Posted: Tue, 11/29/2011 - 05:11 | Post subject:

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

Hi RAM,

In certain cases, the lenders can offer a FHA streamline loan without appraisal of the property. However, it would be completely the lender's discretion whether or not he would offer you a loan without appraisal.

Hi MOE,

If you don't have equity in your property, you won't be able to [url=http://www.mortgagefit.com/Mortgage-Basics/do-i-qualify-for-a-mortgage.h... for a mortgage[/url] refinance. I don't think a VA loan will cover the closing costs and other fees.

Hi Joe,

Your query has been replied to in the given page:
http://www.mortgagefit.com/refinance/depreciation-homevalue.html

Take a look at it. Hope it helps you.

Thanks

Like | Dislike | Share | Posted: Wed, 08/18/2010 - 00:51

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

I have a fixed rate mortgage in the amount of 480,000 @ 5.375 on a home valued @ 750,000. I am considering refinancing into a 1st of 417,000 @ 4.625 and a 2nd @ 5.125 my credit is excellent and I will have not trouble qualifying for a refinance. Is this a good idea?

Like | Dislike | Share | Posted: Wed, 07/14/2010 - 22:14 | Post subject:

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

I want to refinance for the amount of the balance left on the mortgage. Depending on when the loan closes my mortgage balance might go down since I am making payments. Will the loan amount be adjusted down or is the amount specified in the Uniform Residential Loan Application what I will get and any difference will be paid to me?

Like | Dislike | Share | Posted: Thu, 09/09/2010 - 06:06 | Post subject:

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

it's really a matter of doing the math. if your reduction in payments will end up paying for the upfront fees within a 2 or so year period, then it's not a bad idea at this time to refinance. if, as niicss notes, your savings isn't going to be that productive, then don't bother.

Like | Dislike | Share | Posted: Sat, 10/17/2009 - 09:17

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

House worth approx. 75,000. Zero due on mortgage. Between the payments I am put in a hardship. Not to mention the interest rate on the credit card debt. What kind of loan should I get to consolidate these payment to at least give me peace of mind?

Like | Dislike | Share | Posted: Fri, 01/22/2010 - 07:12 | Post subject:

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

I got a new job 3 months ago in Louisiana with the same position I used to work before. Now I would like to refinance my house in Las Vegas, NV after almost 2 years of unemployment there . My credit score is above 720 and I have money reserved in my bank account and also direct deposit from my company and my monthly salary is about $9,000.00. Would you please give me some advices. Thanks, Brian

Like | Dislike | Share | Posted: Fri, 05/06/2011 - 09:09 | Post subject:

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

Under -- Bad Time to Refinance -- it says if your house value has gone down, then it's a bad time to refinance. My question is ... hasn't EVEYRBODY'S house value gone down recently? Does this bullet point still hold true?

Like | Dislike | Share | Posted: Wed, 11/24/2010 - 13:07 | Post subject:

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

Welcome Guest,

You only have 5 years to pay off your existing loan. In such a situation, refinancing the loan for another 15 years is not a very good option in my opinion, though you are getting a lower interest rate.

Like | Dislike | Share | Posted: Tue, 11/29/2011 - 20:38

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

To Cecil,

With a credit score of 620, it will be difficult for you to qualify for a loan. Moreover, if the lender is not convinced about your financial situation, then he won't be ready to give you a refinance. It's better to apply for a loan modification with your lender. This will help you in saving the property and you will also get an affordable payment plan to pay off the loan.

If you want to get rid of the property, then you can apply for a short sale. Your credit score would get reduced by 80-100 points and you would be liable for the deficient amount resulting from the sale of the property.

To Kathleen,

After the extension of the Obama's loan modification plan, even unemployed borrowers will be able to get temporary help from the lenders. You will have to contact your lender and check out whether or not he is participating in the program. If he does so, then you can apply for the help.

Like | Dislike | Share | Posted: Mon, 04/12/2010 - 02:49

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

Hi gregory,

You can refinance your VA loan and change it to a FHA loan. In order to do so, you should have equity in your property. Apart from that, you should have a good credit score and income as well.

Thanks

Like | Dislike | Share | Posted: Mon, 05/23/2011 - 22:42

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

Our current balance owed on our mortgage is $23,000. Is it possible to refinance our current home and take cash out to buy another home for cash? Our plan would be to rent our current home to our son and family.

Like | Dislike | Share | Posted: Sat, 02/05/2011 - 09:47

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

I bought my condo here in Venice,FL in April 2005. Loan type: 5-year-ARM,
@5.625% Int. Rate. The current loan ballance is $ 131,500 and the value of my condo is about $ 103,000. My lender (Bank of Amerika) is offering a new loan @ 125% of my home value, which equals $128,000 @ 5.875% int. rate for 30 years. I do not know how long this offer will be available. It depends on the goverment's decision. My question:Does refinancing in these conditions make any sence to you? Should I go for it?
Thank you very much for taking my question and for your professional advice.
Regards,
Robert.

Like | Dislike | Share | Posted: Thu, 02/18/2010 - 18:05 | Post subject:

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

if property value goes down will that affect my mortgage payment. Should it go down to

Like | Dislike | Share | Posted: Thu, 02/10/2011 - 04:14

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

Franko, you can choose from a variety of terms: 15-year, 20-year, 25-year and, of course, 30-year.

If you've got the ability to pay a larger payment, it is always advisable to go for the shorter term. Just be certain you can live with it for that entire period.

Like | Dislike | Share | Posted: Tue, 10/19/2010 - 12:18

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

Russ, the lender here is trying to make itself comfortable at the same time as providing some possible relief to your aunt. She gets the benefit of a reduced interest rate which won't hurt the lender because they'll undoubtedly sell the resulting mortgage; and they'll be more secure knowing that a reduction in interest rate will enable her (presumably) to make payments more easily.

Undoubtedly, too, there is a likely incentive coming from the government when the lender grants a new loan under the HARP progam (don't quote me - I'm assuming this for the most part).

It might not be such a bad deal for your aunt after all; the longer she's able to pay with the new setup, the greater the possibility that the lender will reap the benefit of payment of both loans.

Like | Dislike | Share | Posted: Wed, 02/16/2011 - 09:07

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

i am wanting to know if there is a statue of limitations on filing a suit against a broker . thank you ,carol........

Like | Dislike | Share | Posted: Wed, 01/27/2010 - 22:05 | Post subject:

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

Hi MIMIMIMI,

You can use your other assets and gift monies in order pay down your current mortgage so that you can refinance the mortgage solely in your name. As far as I know, your taxes and homeowners insurance won't be taken into consideration when the DTI ratio is calculated.

Like | Dislike | Share | Posted: Wed, 03/02/2011 - 22:54

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

Hi, I would like to refinance my mortgage from a 30 to 15 year. Straight Refi, with no additional cash out. Where is the best place to start? My current lienholder? A mortgage broker? or somewhere else. Thanks, Lisa

Like | Dislike | Share | Posted: Mon, 07/26/2010 - 13:26 | Post subject:

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 jake,

If you're planning to stay in the property for a long period of time, then you can refinance the mortgage loan. Staying for a long period of time will help you in offsetting the closing costs resulting from the mortgage refinance.

To Guest,

Your mortgage payments won't go down if your property value goes down. You will have to pay off the mortgage payments as per the agreed payment plan.

To Pattycakes,

If you have equity in your property, then you can contact the local lenders and apply for a 15 years fixed rate mortgage. If you meet the required criteria by the lender, you'll be able to get a loan.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Thu, 02/10/2011 - 22:53

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

I have an FHA mortgage but I now need to rent the property because I am marrying someone who has an FHA mortgage and I plan on moving in with my spouse and renting my property. I've learned that with an FHA loan the property must be your primary residence. What are my options and what type of loan can I refiance with that would be beneficial to me?

Like | Dislike | Share | Posted: Fri, 02/18/2011 - 11:51 | Post subject:

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

I currently have a 30 yr. mortgage for $154,000. I have over 28,000 credit card debt plus school loans and hospital bills. I have enough equity to refi FHA and get 25K cash back. BUT then my loan would be $182,500 and I would pay the additional $73/mo for 5 yrs. We are totally cash-strapped!! Paying bills each month is awful. (this debt load is accumulated from the past 25 yrs) we are 55/59 yrs. We have no savings or other $. We do currently both have jobs paying about $35K/yr. ea. Is this smart to do? We have been in our home (smaller) just 4 months. If we did this we would only then have auto, hospital and school loans left to pay. Our scores are high 600's. We have been approved for the FHA. Help!!! Should we do it? I also don't want to risk loosing our home--and think it will slowly continue to appreciate in value.

Like | Dislike | Share | Posted: Mon, 06/14/2010 - 08:25 | Post subject:

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

I am trying to refinance my home.I have 8.5% interest rate.My home has gone down in value I owe 104,000. My value now is at 85,000.Is there any lenders out there to help or am I better just to leave it go and foreclose on it. I am having problems keeping up with mortgage payments,but have always been on time

Like | Dislike | Share | Posted: Thu, 03/17/2011 - 15:02 | Post subject:

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

If I were you, I would try to refinance the whole thing into one loan. To answer your original question...it all depends on whether that first bank will allow the second loan with B of A to exist. Each bank will give you a different answer on that.

Like | Dislike | Share | Posted: Sun, 09/26/2010 - 15:29

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

Hi Sljmoon,

As you've equity in the property, you will be able to qualify for a refinance with the help of a co-signer. You can request any of your friends or relatives to cosign for you. However, that person needs to have a good credit score.

Thanks

Like | Dislike | Share | Posted: Tue, 06/22/2010 - 23:23

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

judy if your plan is to remain in your home, then refinancing now, if possible, is worth your time and trouble. rates have come up since their lows of recent months, but it's still worth it. if you have a conventional loan (and your lender can tell you for sure if you don't know), you can refinance up to 125% of the current value. hopefully, that would suffice for you.

Like | Dislike | Share | Posted: Tue, 01/12/2010 - 07:05

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

I have a six year interest only mortgage at present on variable rate on £55.000. what is my best option? fix interest? :(

Like | Dislike | Share | Posted: Mon, 04/04/2011 - 08:55 | Post subject:

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

I was wondering if it is possible to refinance a rental property when your income is already being used up by your home mortgage. My husbands income is just enough to pay the mortgage on our house do to the economy this year and I am a student without an income. My townhouse that we are currently renting out has a 7-year interest only loan that is about to expire and we were wanting to refinance the townhouse before that time. Is this possible?

Like | Dislike | Share | Posted: Wed, 05/05/2010 - 10:25 | Post subject:

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

I was wondering if it is possible to refinance a rental property when your income is already being used up by your home mortgage. My husbands income is just enough to pay the mortgage on our house do to the economy this year and I am a student without an income. My townhouse that we are currently renting out has a 7-year interest only loan that is about to expire and we were wanting to refinance the townhouse before that time. Is this possible?

Like | Dislike | Share | Posted: Wed, 05/05/2010 - 10:25 | Post subject:

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

I was wondering if it is possible to refinance a rental property when your income is already being used up by your home mortgage. My husbands income is just enough to pay the mortgage on our house do to the economy this year and I am a student without an income. My townhouse that we are currently renting out has a 7-year interest only loan that is about to expire and we were wanting to refinance the townhouse before that time. Is this possible?

Like | Dislike | Share | Posted: Wed, 05/05/2010 - 10:28 | Post subject:

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

i signed a qweek clame to my ex wife, how i can forse her to remove my name from the loan

Like | Dislike | Share | Posted: Mon, 07/05/2010 - 11:40

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

If I already have a 6% mortgage loan rate, would I benifit if I refinanced at a rate of 4.75% ?

Like | Dislike | Share | Posted: Mon, 07/26/2010 - 15:29 | Post subject:

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

My daughter has been trying for months to get a loan on manufactured home remodified. She is a mother of two children, ages 8 and 12. She works full time job & has no other help. The loan company kept telling her it looked good that the remodification would go through, then today they call her & tell her that by the end of June, they will push foreclosure. This is after they had prolonged this process for months. She had her hopes for being able to keep her home & reducing her payment monthly so she could survive. Do you have any suggestions, she works hard & wants to pay her own way but with recent life changing happenings beyond her control she needs help.

Like | Dislike | Share | Posted: Wed, 05/26/2010 - 13:11 | Post subject:

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

i have 7 years left on my mortgage. i'm currently two months behind. my credit is poor and so is my income. what do you suggest?

Like | Dislike | Share | Posted: Mon, 08/23/2010 - 11:58 | Post subject:

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

I'm not at all familiar with whatever regulations you may be faced with in the UK (I presume), but I'd suggest that you make it a point to pay principal off every month, regardless of your Interest-only status. I believe that a fixed interest rate would probably be in your best interests, as well. There's enough risk involved with interest-only that you needn't take on the additional risk of a variable rate loan.

Like | Dislike | Share | Posted: Mon, 04/04/2011 - 09:56

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

Hi marilyn!

Welcome to forums!

As there is no equity in your property, none of the lenders will be ready to give you a refinance. It is better if you could apply for a deed in lieu of foreclosure in order to get rid of the property.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Thu, 03/17/2011 - 23:22

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

Welcome sheila,

Most modular homes lose their value very sson.. As a result most of the lenders are not interested in giving you a mortgage refinance. This community has a large number of lenders. You can seek a no obligation free mortgage quote from them and check out if they can help you in this regard.

Like | Dislike | Share | Posted: Sun, 01/13/2013 - 23:13

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

My parents are in the process of refinancing and they already “approved” to have lower monthly pmts. However, their tax adviser is suggesting that if they don’t report more income they can fail to prove that they can manage to make their monthly payments.

But isn't one of the reasons to be able to have lower monthly payment being that they can't afford to make their current monthly payment?

What is the advantage to report more income when trying to lower their current monthly payments?

Like | Dislike | Share | Posted: Mon, 01/31/2011 - 13:38 | Post subject:

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

If I have ever taken cash out of my house and I have 2 loans, can I do a rate and term refinance to do a loan......i'm not in TX by the way!!!

Like | Dislike | Share | Posted: Wed, 06/23/2010 - 01:13 | Post subject:

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

If I purchase a home cash, is there a waiting period before I can apply for a mortgage in New York state?

Like | Dislike | Share | Posted: Wed, 11/03/2010 - 09:38

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

I own a lage manufactured home in a 55+ community in MA. I want to retire and looked into a reverse mortgage but was told since I do not own the land I wasn't qualified for a reverese mortgage. I owe a very small amount on my present mortgage, less than 40,000. Is there any other way for me to go and obtain the equity in now have in my home? The house is worth 275,000. Thanks for your help.

Like | Dislike | Share | Posted: Wed, 02/03/2010 - 08:12

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

Can you refinance a house that has been paid off

Like | Dislike | Share | Posted: Sat, 04/09/2011 - 16:24 | Post subject:

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

Welcome renee,

Your query has been replied to in the given page: http://www.mortgagefit.com/Mortgage-Basics/Reverse-mortgage.html . Please take a look at it. I hope it will help you.

Like | Dislike | Share | Posted: Fri, 02/10/2012 - 00:06

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

you didn't indicate current market value on your home, b-b/c, but that's critical. if it's concurrent with the original price, you might be able to squeeze out an fha refinance (rate/term only), and if it's higher then that's good. if you have a fannie mae loan, you might still be in luck, as lenders can readily go as high as 105% ltv, and legally to 125% (not sure anyone does, though).

Like | Dislike | Share | Posted: Mon, 01/25/2010 - 10:54

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

I just locked in a refi rate of 5.25 down from 6.25. they are rolling the UFMIP of 2700 into the loan amount bringing up my balance to 150,000 from 147,00 rounding off numbers—a 2.3 yr recovery time. Closing paid by lender. Is the streamline refi worth it?

Like | Dislike | Share | Posted: Mon, 08/23/2010 - 16:08 | Post subject:

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

can 80,000mtg.refy 20 years left rate5.25 now

Like | Dislike | Share | Posted: Sun, 10/14/2012 - 15:09 | Post subject:

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

Hi MOBEE,

If there is a change in the property deed, then the lender will want anyone of you to refinance the mortgage. Thus, that person would become solely responsible for the mortgage. You and your wife can sell off the property and pay off the mortgage. This will free both of you from the liability of paying off the mortgage.

Take care.

Like | Dislike | Share | Posted: Wed, 03/03/2010 - 00:38

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

Hi Rowdy,

Though you've taken cash out loan, if you've equity in your property, then you'll be able to get a refinance. Apart from this, you need to satisfy the credit score and income requirements of the lender.

Like | Dislike | Share | Posted: Thu, 06/24/2010 - 00:22

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

Hi Wildcat!

Welcome to forums!

You can refinance both the loans into one and go for fixed rate 15 year mortgage. If you're planning to live in the property for a long period of time (around 8-10 years), then it would be a good option to get the loan refinanced.

Sussane

Like | Dislike | Share | Posted: Thu, 08/19/2010 - 00:23

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 lunchlady,

Lenders will want you to have at least 20% equity in the property in order to refinance your mortgage. I would suggest you to contact your lender and apply for a refinance. The lender will go through the details and let you know whether or not you would be able to go ahead with refinancing.

To zoey,

I appreciate the fact that you have a good credit score. However, you should keep in mind that if you don't have equity in your property, you won't be able to refinance the mortgage.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Tue, 05/18/2010 - 00:31

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