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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
meta title: 
Refinance a mortgage at the right time and for right reasons.
adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi John,

If you've equity in your property, then you would be able to refinance your mortgage. Apart from the equity in your property, you should have excellent credit scores and stable income in order to qualify for a refinance. You can contact your present lender or you can even speak to the other lenders of your locality to refinance the home loan.

Like | Dislike | Share | Posted: Sun, 06/20/2010 - 23:57

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

I have a low interest 4.375 on my first with a balance of about 106K...15 yr. with about 8yrs. left....also have a second @ 6.875 with a 40K balance and about 10 yrs left....should I refinance? Don't want ANYTHING over 15 yrs. Current payment on first..monthly is about $1580..taxes and everything...the second is about $440.....

Like | Dislike | Share | Posted: Wed, 08/18/2010 - 09:17 | Post subject:

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

Hi brianmcguigan,

If you have equity in your property, you will be able to refinance your mortgage. However, if you don't have 20% equity in your property, then you won't be able to get a mortgage refinance.

Thanks

Like | Dislike | Share | Posted: Mon, 05/16/2011 - 00:51

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

Hi jwarner,

I can understand how difficult things have been for you. I will suggest you to contact other lenders and check out if they can refinance the mortgage for you. This community, too, has a large number of lenders. You can seek a no obligation free mortgage quote from them and check out whether or not you can qualify for a loan.

Thanks,

Jerry

Like | Dislike | Share | Posted: Thu, 06/30/2011 - 02:07

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

Hi jpeeples!

Welcome to forums!

I don't think you will be able to waive off the escrow fees.

Sussane

Like | Dislike | Share | Posted: Wed, 12/15/2010 - 21:25

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

All I want to do is refi my modular home. I just want the lower intrest rate and to be able to pay it off sooner. Why is it so hard to find someone who does refi on modular homes...

Like | Dislike | Share | Posted: Sat, 01/12/2013 - 07:29 | Post subject:

reidgoforth577's picture
reidgoforth577 | Joined: January 6, 2010 02:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Is the interest tax deductable on a refinced home mortgage?

Like | Dislike | Share | Posted: Wed, 01/06/2010 - 15:33 | Post subject:

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

Hi,

Our mortgage is under my wife's name...and joint title...fast forward 5 years after we bought the place, my income is our main income, and my credit is much higher than my wife's.....can we refi from her being on the mortgage to just me being on the mortgage??? I know we can refi from her on the mortgage to both of us....but, when doing so, the banks will take the lowest med scores, i.e, my wifes....

In summary, when both spouses are on the title, but only spouse A is on the loan, can you go from A only on the loan to B only? or must be joint?

thanks so much

Like | Dislike | Share | Posted: Mon, 03/08/2010 - 13:59 | Post subject:

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

What percentage of the appraised value can I borrow in South Dakota. It would be a conventional, fixed, 30 year loan

Like | Dislike | Share | Posted: Tue, 09/21/2010 - 17:38 | Post subject:

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

Mortgage rates are at the lowest point. When picking a Mortgage company to complete your refinance transaction you must ask your Loan Officer to give you the best options based on your qualifications.

Kal Patel
Voyage Home Loans

Like | Dislike | Share | Posted: Tue, 09/22/2009 - 14:28 | Post subject:

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

sorry, people...anonymous has given us all bad information. this website is not sponsored by, nor administered by, nor have any relationship with (at all) the Obama administration.

it is simply a company that is taking advantage of the original plan and making money by consulting with folk. now, i'm not saying it is a scam, nor am i saying that it won't be worthwhile to check it out. i am saying that our poster here is incorrect, and that you ought to be wary if you decide to check it further.

Like | Dislike | Share | Posted: Thu, 10/29/2009 - 07:49

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

Good morning! You have provided great information here. Amazing stuff.

My situation is this: I have an FHA loan for a house purchased in 2003 by myself and my ex-wife. We divorced in 2005 and I was given the house. The title is only in my name now as the divorce decree and quit claim were signed by both of us and she has given up all rights to the home to me. The mortgage is the only thing in both of our names. I want to refinance to remove her name. My credit is not good due to the divorce however, I have not failed to make payments soley on my own to the house. My current lender, Well’s, will not refi due to bank rules.

Can I refi? Is there someone out there that will Streamline Refi this without the credit check? I read the rules stating that this is one of the things streamline refi does not require (though some lenders will).

Thank you in advance for your response! You are a wealth of knowledge and “lending” it to others is a great gift you give to everyone. Continued success to you!

Steve

Like | Dislike | Share | Posted: Fri, 01/08/2010 - 08:39 | Post subject:

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

do you do home equitly loans?

Like | Dislike | Share | Posted: Wed, 05/26/2010 - 18:28

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

I should mention that the original loan is an fha and I want to refi using the streamlined fha.

Like | Dislike | Share | Posted: Fri, 01/08/2010 - 08:43 | Post subject:

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

Hello: I am in the process of looking around for a refinance option. I currently have a 30 yr FHA loan originated in 06/2007. I do not have any late payments. I want to know if there are opportuinities to refinance my loan to a lower rate/lower term without an appraisal?
cheers

Like | Dislike | Share | Posted: Mon, 08/16/2010 - 08:49 | Post subject:

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

I am 5 years into my current mortgage, so more of my monthly payment is going towards principal not interest and paying off loan amount, if I refinance will more of my payments be applied to intrest rather than principal?

Like | Dislike | Share | Posted: Thu, 07/08/2010 - 09:26 | Post subject:

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

Hi Wayne!

Welcome to forums!

You should appraise the property in order to find out whether or not there is equity in your property. If there is equity in your property, then you can refinance both the 1st and the 2nd loans and get cash out loan in order to pay off your credit card debts and personal loans. If there is further equity in your property, then later you can again go in for an equity line.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Fri, 02/24/2012 - 00:14 | Post subject:

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

Nick, your "good credit" is going to have to be north of 740 in order for you to obtain the best rate these days. Even then, you'll pay a premium for cash-out, which you're doing because you have the home equity loan. Rates have gone up in the very recent past, so shopping today will be different than it was a week ago, and tomorrow may bring something altogether different as well.

You seem to be a good borrower, but having good credit isn't the same as great credit, though I'd have to consider that your good record since 1993 will contribute to an above-700 score. As long as your financials are in order (income), you ought to do well.

Like | Dislike | Share | Posted: Mon, 02/14/2011 - 09:42

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

Hi!

Welcome to forums!

As 3 years have passed since your Chapter 7 discharge, you may not qualify for a conventional loan. You should contact the local FHA lenders and check out your options.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Wed, 12/19/2012 - 21:58

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

I live in Texas and have been told that Texas law regarding home equity loans will not allow me to consolidate thru refinancing my first mortgage and [url=http://www.mortgagefit.com/home-equity.html]home equity loan[/url] into a singe mortgage note. Is this true?

Like | Dislike | Share | Posted: Wed, 11/11/2009 - 11:28 | 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 (cashout) 3 yrs after chapter 7 due to business closure. Have a primary which is top end mobile home but also have second home. What lender would consider providing a mortgage for one of these?

Like | Dislike | Share | Posted: Tue, 12/18/2012 - 17:32 | Post subject:

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

I no longer have to pay PMI; if I refinance, will it come back on my loan?

Like | Dislike | Share | Posted: Tue, 02/23/2010 - 08:00 | Post subject:

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

In April, my husband and I purchase our first home. Five months later, my husband is not working (Im a stay-home-mom of four) our savings are low, we are having trouble making our montly payments. We have been on time but are scare of the future. We are thinking of selling but with this economy, we don't know how soon we can sell. Don't know what to do? Please advice. Thank U.

Like | Dislike | Share | Posted: Fri, 09/03/2010 - 23:57

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

I bought the house before marriage and now want to refinance. Does it require adding my wife to the title and mortgage? I want to keep this property before marriage as separate since the house was purchased with the help other people not associated with my wife.

Like | Dislike | Share | Posted: Tue, 07/13/2010 - 12:32 | Post subject:

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

John, the tax credit has no relevance whatsoever to your option of refinancing. Go ahead and do it if it makes sense. You won't encounter any difficulties other than the usual folderol.

Like | Dislike | Share | Posted: Fri, 10/22/2010 - 12:52

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

Hi candy,

If you want to add your husband to the mortgage docs, the lender will ask you to add your husband to the property deed as well.

Like | Dislike | Share | Posted: Tue, 01/11/2011 - 23:00

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

Hi VK,

If you have excellent credit scores and stable income, you will be able to refinance the loan in your name. I don't think the refinance has to be in joint names.

Like | Dislike | Share | Posted: Mon, 03/08/2010 - 23:21

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

Welcome Guest,

A query similar to yours has been replied to in the given page:
http://www.mortgagefit.com/predeal/about38980.html#166061

Take a look at it. Hope it helps you.

Like | Dislike | Share | Posted: Mon, 05/24/2010 - 01:13

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

igot a 2012 moudle home i have my on land i owe 70,000 on it it is finace at 6.59 i looking to refince at a lower rate my credit is fair it is 635

Like | Dislike | Share | Posted: Tue, 06/11/2013 - 12:01 | Post subject:

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

I would like to refinance my manufactured home and combine my 1st and 2nd mortgage, pay off some debt, would like about 10,000. cash out for improvements. I have had no luck in finding a lender. I have been trying to find one for over a year. My manufactured home is on privately owned lake property, The MFH also has a permanent addition built on to it, about the same sq. footage on concrete foundation.Can you help me find a lender. I live in Minnesota. Thanks.

Like | Dislike | Share | Posted: Mon, 09/14/2009 - 11:50 | Post subject:

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

You should only refinance the loan if you feel you would be able to afford the mortgage payments. Moreover, how long are you planning to stay in the property? If you are planning to stay in the property for a shorter period of time, then you shouldn't refinance the loan as it won't help you in offsetting your closing costs.

Like | Dislike | Share | Posted: Fri, 02/19/2010 - 02:20

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

Hello,

I have a fha loan with a balance left of $54,000 interest rate 7.5%. I've had this loan for 11 years, when i didn't have any credit history. My credit score now is rated excellent, and I want to refinance. So what should I do? I live in an area where there where hit by foreclosers, and it drove my home value down to around $45,000. Should I go fha streamline? or are there any other measures I can take to lower my interest rate, without having to refinance and add to the balance? I'm trying to achieve lower monthly payments. please advise?

Like | Dislike | Share | Posted: Mon, 05/17/2010 - 15:01 | Post subject:

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

I am wanting to refinance my mortgage in Texas. But because we live in a rural area with 180' of lakefront and there have been no houses sold in our area during the past 4 years, we cannot get a fair appraisal. The mortgage companies will not permit the appraisers to go outside of our county to identify comparable house. Is there a way to refinance without an actual appraisal?

Like | Dislike | Share | Posted: Thu, 01/28/2010 - 08:15 | Post subject:

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

My thoughts, Ronnie, would be that if you have a need for the $50K, or if it will benefit you in any way (why wouldn't it?) and you can handle the payments because they're the same as what you pay now...why not go for it?

It seems to make sense...you apparently already feel that way.

Like | Dislike | Share | Posted: Fri, 10/08/2010 - 14:50

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

I'm pretty confused about your post. You mentioned that your parents are already "approved" - why the quotation marks? Was the approval done by a chimp or a real human being? Did they approve themselves? Approval ought never to be contained in quotation marks - it either is, or isn't.

Why would their tax advisor get into the mix? Of course, they might have asked for that advice...I understand that's possible. But if they've spoken to a lender and received favorable responses, then what the advisor has to say might not be at all relevant to the transaction they're undertaking.

The advantage of reporting more income is that one is more certain to be approved when income is higher. But if they are already "approved" then all they need to do is remove those quotes and close the new loan.

Like | Dislike | Share | Posted: Tue, 02/01/2011 - 08:20

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

Will NACA help me me by paying off my reversed mortgage and getting a low interest rate mortgage of $350,000. I took the reversed mortgage to pay off mortgage and other bills but do not want my home in hock for more than $650,000.

Like | Dislike | Share | Posted: Mon, 06/14/2010 - 22:25 | Post subject:

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

Hi tn,

You cannot force your ex-wife to remove your name from the mortgage. You need to negotiate with her and convince her to refinance the loan so that your name is removed from the mortgage.

Thanks

Like | Dislike | Share | Posted: Tue, 07/06/2010 - 00:24

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

I took out a 30 year loan for $289,000 @4.5% interest. My PI is $1489 per month and I have been in the house for almost 2 years. My current principal is $269,000. I am starting to pay an extra $800 to principal each month to pay the loan early and save on interest.

With interest rates dropping to 3.5% for 30 years and 2.5% for 15 years.
1. Is it worth me refinancing?
2. How much would it cost to refinance? And, how long would it take me to recoup the cost?
3. What would my monthly PI be?
4.If I pay about $500 extra a month on the principal how long would it take me to pay the loan off and how much interest would I pay over the life of the loan?
If you think of other things I should consider, please let me know.

Thanks.

Like | Dislike | Share | Posted: Mon, 07/30/2012 - 19:46 | Post subject:

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

Welcome Guest,

Unless you pay off the lien, you won't be able to refinance the mortgage. As far as I know, the lenders will not be able to give you a [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url] based on the equity of your property if your mother does not pay off the lien.

Like | Dislike | Share | Posted: Sun, 04/18/2010 - 23:30

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

Hi dannyboy!

Welcome to forums!

You will be able to refinance your mortgage provided you have a good credit score and income. Apart from this, you should also have equity in your property in order to get a refinance.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Tue, 10/16/2012 - 00:55

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

If my HOA puts a lien on another unit owner, will that affect my ability to refinance my unit?

Like | Dislike | Share | Posted: Fri, 01/14/2011 - 22:23 | 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 remove your name from the mortgage, then your boyfriend will have to refinance the loan in his name. In order to do so, he should have a stable income and good credit score. Also, the property should have equity.

Thanks

Like | Dislike | Share | Posted: Sat, 05/01/2010 - 02:07

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

Hi Ink,

It's great to know that you liked the website! :)

Keeping in mind the present market situation, it's very important to have a good credit score and income in order to qualify for a refinance. Also, the property should have some equity in it. Without checking your credit, the lenders will not be ready to give you a refinance.

Thanks

Like | Dislike | Share | Posted: Fri, 01/08/2010 - 23:11

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

sherri, if the loan to value ratio on your new refinance loan exceeds 80%, mortgage insurance would be required (conventional loan)

if you are planning on getting an fha loan in your effort to refinance, you'll pay mortgage insurance premium (MIP) regardless of the loan to value ratio.

Like | Dislike | Share | Posted: Tue, 02/23/2010 - 08:55

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

Hi Nunu,

Rates are going low. So, if you've equity in your property, then you will be able to refinance the mortgage with a 15 year FRM. However, if you don't have equity in your property, then you won't be able to get a mortgage refinance.

Thanks

Like | Dislike | Share | Posted: Tue, 01/18/2011 - 21:56

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

yes, reid, you can deduct the interest you pay on your refinanced mortgage.

Like | Dislike | Share | Posted: Wed, 01/06/2010 - 20:29

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

Nancy if you don't know how much you need to borrow, I don't anticipate any one of us on the forum to have any knowledge about it.

Like | Dislike | Share | Posted: Thu, 10/28/2010 - 11:00

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

Hi ama,

You should refinance the mortgage only if you're planning to stay in the property for a longer period of time. Also, it will be a good option to refinance if you're getting an interest rate which is lower by 2% from your existing rate.

Thanks

Like | Dislike | Share | Posted: Mon, 06/27/2011 - 23:31

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

Call their Home Ownership preservation office, 800-505-3706

Like | Dislike | Share | Posted: Mon, 04/12/2010 - 17:06 | Post subject:

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

My current mortgage was late one time in the last 12 months - due to only honest mistake - out of the state and just completely forgot. It is currently current. had some bad things yrs ago - have great income - steady and income from the property as it is a three family individual townhouse - i now rent two of the properties. An appraisal was done 2 weeks ago; it valued at $215,000 - I owe about $85,000. One lender said no to refinance with cash out due to the one late payment. Can I do a refi with cash out with another lender? home is in CT

Like | Dislike | Share | Posted: Mon, 10/26/2009 - 06:21 | Post subject:

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