Archive for home refinancing
Home Refinancing Advice
Posted by: | CommentsHomeowners across the United States continue to search for home refinancing advice as lenders continue to tighten loan guidelines. It is important for borrowers to understand the criteria and requirements that lenders are requesting for mortgage refinance transactions. Home mortgage rates rise and fall, but locking into a low interest loans with a fixed rate for 30-years offers true peace of mind.
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There has been a consolidation of many loan programs, but there still remains a variety of refinance loans that offer a unique niche in an effort to meet the needs of homeowners in today’s market. There has been a consolidation of many loan programs, but there still remains a variety of refinance loans that offer a unique niche in an effort to meet the needs of homeowners in today’s market.Get Home Refinance Help from the Experts at Nationwide! |
1. FHA Refinance – There are several types of FHA loans.
a. FHA Streamline Refinance- You must currently have a FHA mortgage that has been current for the last 12 months. Home refinancing to 96.5% but there is no appraisal required.
b. FHA Cash Out – Qualified borrowers can get cash out, consolidate debt or finance home improvements.
2. VA Home Loans – Veterans are eligible for VA mortgages.
a. VA Refinance - borrowers can refinance to 100% with a rate and term loans or get cash out up to 90%.
b. VA Streamline Refinance – VA borrowers who already have a VA mortgage may qualify for a streamline refinance with no appraisal and no income documentation required.
3. Second Mortgage – Sometime borrowers need some cash, but they want to leave their first mortgage the same. In this case a second mortgage is recommended, because it subordinates to the existing first mortgage. Borrowers can choose between a fixed rate 2nd mortgage or an equity line of credit in which borrowers only pay interest on the portion they access.
4. Conforming Refinance – Mortgage lenders have tightened their guidelines recently. Conforming programs allow cash refinancing to 80% in most cases.
Recommended Nationwide Articles to Help Homeowners with Refinancing
Best Time to Refinance | When to Refinance a Home | How to Refinance with No Closing Costs
Best Home Refinancing Loans
Posted by: | CommentsI get a lot of emails from homeowners wanting to know what the best home loan programs are at the moment. It is common for most consumers in the U.S. to want the inside scope, but homeowners in particular want the road map to the best mortgage rates for refinancing and home buying. I uncovered some interesting statistics from the Lead Planet, a mortgage marketing company that generates mortgage leads online. The company said that in 2005, nearly 7 out of every 10 loan applications online qualified for a purchase or refinance loan. In 2010, less than 2 out of 10 home loan applications led to loan approvals from bank or lender underwriters. Home loan refinance transactions were in high demand, but lenders expected more from borrowers who wanted to qualify for record low rates.
Simply put, times have changed — Credit scores are way down, loan delinquencies have exploded and home equity has evaporated. Not to mention unemployment continues to surge and incomes as a whole are way down. These days, borrowers should throw a party if they are approved for a mortgage refinance, new home purchase or home equity loan. Second mortgage products have almost completely vanished and refinance guidelines are requiring significantly more equity. Unfortunately most homeowners are rejected from their lender when applying for a refinance online.
In most cases conventional programs allow borrowers to refinance mortgages to 80% loan to value but if borrowers need cash out the LTV are restricted to 70 or 75% depending on the credit score and debt to income ratios. FHA refinance programs are a bit more flexible as they allow borrowers to refinance to 96.5% and if they need cash out the loan to value limit is set at 85%. VA refinancing continues to have the loosest guidelines as they allow 100% refinancing for rate and term loans and 90% for cash out mortgages. Streamline refinance transactions provide the most loop holes for homeowners as they require no appraisal, so borrowers who have underwater mortgages can still refinance. The streamline program also waives income documentation, so if a borrower’s job can be verified no pay-stubs, W2′s or tax returns will be requested.
Best Refinance Mortgages in 2010
VA Streamline - refinancing beyond the value of your home. (stated income and no appraisal)
FHA Streamline Refinance – FHA customers can lower their interest rate with very little documentation needed.
VA Mortgage Refinance – 100% refinance loan for veterans that have their VA loan eligibility.
FHA Rates and Term Refi - The average borrower can get approved for a low rate refinance with only 3.5% of home equity.
No Cost Mortgage Refinance – If you have a good credit score, take advantage of the lender incentives. The loan companies pay all the closing costs and the borrower refinances into a record low rate.
5 Home Equity Loan Refinancing Tips
Posted by: | CommentsMany homeowners have accumulated a high rate home equity loan over the years and they need help finding a refinance loan solution. Home equity loan refinancing was much easier a few years ago, because there was so many second mortgage lenders ready to facilitate the refinance option. Since the subprime debacle and the housing crisis, homeowners have really had to do some researching to find a home equity refinancing solution. Nationwide has been originating home equity loan solutions for over a decade, so we understand the process of refinancing home equity loans very well.
Take advantage of the Home Equity Loan Refinance Tips listed below:
1. Keep Your Credit Score Above 680 – Do your best to keep your credit score above 700, but at least 680 because this will give you more home equity options.
2. Make Your Home Equity Loan Payments On Time – Home equity lenders want to see that you have a history of paying your equity loan without being late.
3. Get a Licensed Appraiser Who Knows Your Neighborhood – You want a licensed local appraiser to document your home improvement and maximize the value of your home.
4. Check with Your Home Equity Lender to See if They Will Convert Your Variable Credit Line to a Fixed Rate. – Most lenders have the ability to do a note modification that can specifically convert your adjustable rate home equity line of credit into a fixed rate home equity loan.
5. Consider Refinancing Your Home Equity Loan into a FHA Mortgage. – FHA lenders can approve rate and term refinancing to 96.5% and many homeowners have success refinancing their first and second mortgages together into one low monthly payment with a fixed interest rate.
Cash Out Refinance vs Home Equity Loans
Posted by: | CommentsOne of the best benefits of being a homeowner is getting the opportunity to get cash out. Borrowers can choose from a home equity loan or a cash out refinance loan. The home equity loan is a second mortgage lien and the cash out refinance is redoing your first mortgage. If a homeowner already has a low fixed rate mortgage at 5% or lower than an equity loan can be appealing because it allows you to get a cash out second mortgage without touching the mortgage you already have. If a borrower has an interest rate above 5% and/or it’s not a fixed rate mortgage, then cash out refinancing is an ideal opportunity for borrowers to reduce their interest rate while getting access to cash.
The fees and closing costs on refinance loans are typically higher than home equity loans, but in today’s competitive market you may be able to qualify for a no cost mortgage refinance, so discuss your options with your lender prior to jumping to conclusions. Another appealing option is the home equity line of credit. Like the home equity loan, it is a second mortgage, but with an equity line you only pay interest on the portion you access. So if you are doing a remodeling project that may take a year or two then, the home equity line might be the best solution. If you are taking out cash to consolidate debt then, a fixed rate home equity loan would make sense over a credit line, because the interest rate is fixed and the terms are set.
When looking at cash out loan guidelines for home equity and refinance loans, the following applies: FHA refinancing allows first mortgage refinancing with cash out options up to 85% loan to value. Conventional refinance loans enable borrowers to finance up 80% loan to value and VA refinancing enable veterans to get cash out up to 90%. Home equity lenders offer cash out loans and lines from 75 – 90% loan to value, but the credit scores must be excellent to qualify. The other factor to remember is that since equity loans are second mortgages, you have to calculate your present loan plus the second loan amount, divided by the appraised value to calculate your combine loan to value.
Will Mortgage Refinance Rates Improve?
Posted by: | CommentsLetter to the Lender: We were recently shopping for a home refinance loan online and we received a handful of mortgage quotes. Obviously we want the lowest mortgage refinance rates possible. We also want a fixed interest rate on a 30-year term and if we can qualify for a no cost refinance mortgage that would be another benefit. One of the lenders offered us a FHA refinance at 5% fixed on a 30-year term with no points and no fees. Another lender offered us a FHA loan at 4.875% on a 30-year term with no points, but there is $3,000 in closing cost that we would either have to pay out of pocket or we could roll into the loan. Which option do you think we should go with? Is no cost mortgage refinancing always the best choice when shopping for a mortgage loan? Do you think we should wait for refinance rates to drop more?
First of all, if you have the opportunity to save money with a fixed rate while interest rates are at all-time lows, you should jump for the opportunity and move forward. Although mortgage interest rates are extremely low today, it is very difficult to qualify for mortgage refinancing, because lenders have tightened guidelines significantly in an effort to minimize loan defaults and foreclosures. Just because you qualify today does not always mean that you will qualify to refinance tomorrow. For example, What if you are approved for a FHA mortgage at 96% loan-to-value now and FHA changes the guidelines to 95%? What if there were several foreclosures on your street that brings your value down so that your loan to value balloons to over 100%? These are both real reason why borrowers don’t qualify for a refinance loan that they once were approved for.
To answer your second question, I must understand your big picture first.
1. Do you plan on selling your home or moving any time soon? No, we would like to retire in this home.
2. What is the balance on your first mortgage? $385,000
3. What is your home’s appraised value? $495,000
4. Do you have a second mortgage and if so did you want to refinance the second mortgage with the new loan? No second mortgage
5. Have the lenders ran your credit and sent you loan disclosures with a Good Faith Estimate? Yes, we have 739 middle fico score and believe it or not we received loan disclosures from both loan companies.
Lender Recommendation: First of all I would recommend rather than going straight for a FHA loan that you get a quote for a conventional mortgage backed by Fannie Mae or Freddie Mac. FHA loans are great but you are below 78% LTV and you qualify for a prime rate loan with no mortgage insurance. Unless you get a 15-year loan, FHA guidelines requires that you pay a mortgage insurance premium when you close the loan, in addition to a monthly insurance charge. In your case that would save you over $100 a month by choosing a loan backed by Fannie or Freddie. Regarding which refinance option to choose — While the no cost mortgage refinance is appealing but if you keep this loan for the life of the term you would save money by paying the $3,000 in closing cost and go with the lower rate option. These are great refinance options and you could not go wrong with either mortgage loan. Mortgage refinance rates are at record lows so the chances of interest rates improving are slim. It certainly is not worth the risk of refinance rates rising, because there will be a time when they go up and do not come down…
Is Mortgage Refinancing the Best Way to Consolidate Debt?
Posted by: | CommentsHomeowners seem to have the ability to accumulate more debt than non-homeowners. Maybe it’s because typically their housing expenses are greater than non-homeowners or maybe it’s because homeowners have been leveraging the debt with tax deductible mortgage refinancing for the last few decades. Credit card debt is the most common debt that homeowner look to refinance by they also like to refinance home equity credit lines, automobile loans and existing second mortgage loans. If the borrower has the ability to make their mortgage payments on time, then we recommend refinancing a large amount of debt if doing so doesn’t increase the interest rate of your first mortgage. If your job or income is unstable then we would likely not advise you to use your home as collateral for a loan you may not be able to pay back.
Second mortgage refinancing would be less of risk in this case, because 2nd mortgage lenders can rarely foreclose on a home if the borrower is current with their first mortgage. Home equity loans can also be used as a debt consolidation loan. All of these types of loans are considered cash out refinance loans and this form of financing is used as a vehicle for homeowners to consolidate debt and lower their monthly payments.
Before utilizing the cash out refinancing features, homeowner should consider the pros and cons of leveraging their debt with a secure mortgage loan that uses their homes equity to pay off debt. Debt consolidation refinancing can offer many benefits, but you should evaluate your financial goals before committing to another mortgage.
Mortgage Refinance Tips to Maximize Low Rates
Posted by: | CommentsMortgage refinance guidelines tightened this year, so many homeowners are being rejected by their lender for refinancing. Just when you think that you have seen the lowest mortgage rates ever, the interest rates get even lower. Most mortgage executives have indicated they believe the low rates won’t last and that mortgage rates will begin to rise again in 2011. With that being said, it is important to qualify for a mortgage refinance loan, now while the rates for home refinancing are so favorable. Nationwide loan officers provide mortgage refinancing tips at no cost.
Looking for an Affordable Home Refinancing Solution Online?
We outlined the top 3 mortgage refinancing benefits:
1. When refinancing, your new loan should have a mortgage refinance rate at least .5 percentage points less than your present interest rate.
Years ago most financial advisors had recommended mortgage refinancing if you could get a mortgage rate at least 1 percentage point less than your current mortgage. Well, the rules have changed, because refinance rates in recent years have been at historical lows, so a half point drop makes up a larger percentage of your existing rate.
2. Typically most people refinance into the same type of home loan they started, simply because they do not know any better. That can be a financial blunder that could cost the borrower thousands of dollars a year. If you are a few years into a thirty-year mortgage, don’t just refinance into a new mortgage because you save a little bit of money with a reduced mortgage interest rate. The new mortgage could be stretching out your payments over several more years, so you might not really be saving money. For example, let’s say you only have twenty years left on your existing home mortgage. If you can refinance into a thirty-year home loan you would be adding ten years to your existing mortgage loan. If you have the option to qualify for a no cost loans we recommend that you seize the opportunity.
3. Closing costs and lender fees should be recovered within the first 3-5 years or less. Closing costs factors should be considered before signing the paperwork need to close a loan. You’ve got to make sure the proposed mortgage rate makes sense on paper financially. Don’t assume that the closing costs are justified. Many home refinance loans will see closing costs in the $5,000 to $10,000 range and some have even higher lender fees.
