What you Need to Refinance your Home ADI News
To get the best interest rates, you normally has to have about 20 percent in equity. If you have less than that, you will have to pay anywhere from one-eighth to one-quarter of a percentage point higher for interest. With 10 percent, you will probably still be considered for a refinance, one you go down to 5 percent though, you may be turned down, especially if your local housing market is weak.
However, don’t panic if you’re underwater. You may still be able to refinance. Programs like the federal Home Affordable Refinance Program, as well as others, have been designed just for this issue. You may be able to refinance through them with little of no equity, or even negative equity. These loans, however, are not easy to obtain. You’re more likely to be approved if you have low equity rather than negative equity.
EquityFiguring how much equity you have is tricky, given the fact that home prices have decreased over the last five years. In order to know for certain, have your house appraised. You will need to do it anyways since your lender will require it and you have to pay for it either way.
Guidelines to Refinance a Home Loan
With the current economic meltdown and the prolonged slump in the housing market, millions of consumers across the country are refinancing their mortgage each year. If you are also looking forward to refinance a home loan at a substantially lower interest rate, you must consider a few crucial factors first. Remember, if you have stellar [...]
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A Good Time to Refinance Your Home Loan
www.mortgagesourceonline.com - With today's low mortgage interest rates going skywards in the near future, this may be the perfect time to ...
How soon can you refinance your home?
How soon after your first mortgage payment can you refinance your home? 1 year? 3 years? 5 years?
I'm unsure of the variables so here is a sample scenario.
$350,000 home. 10% initially put down ($35,000)
30 Year fixed mortgage + PMI
Thanks! Best answer will get 10 points.
Several factors play a role....
1.) Do you have a prepayment penalty? These penalties are monstrous and you'll want to wait until the prepay has expired.
2.) What are your goals? Are you looking to pull cash out or just get rid of that nasty MI? If you're looking to pull cash out, wait 1 year. If you're looking for better loan terms, you can refinance within 3 months, BUT...
3.) ...value has to be there. In other words, the house needs to appraise to the necessary value in order to get the loan terms you want.
Example - You owe $315,000 on a $350,000 home. Your loan amount to home value ratio is at 90%. In order to get rid of your MI, the home would need to appraise at $400,000 ($394,750 + $5250 fees) in order to refinance.
Some mortgages have a pre-payment penalty that you'd need to factor into the calculations to see if refinancing is a good idea. The pre-payment penalty won't bar you from refinancing but will increase your cost of refinancing.
additionally, it'll cost you more to buy the loan then the interest drop for a new fixed rate if you plan to recover same in 10 yrs.
if you need $$ get a heloc for a short term if your present term is great...then you have control
You could get rid of the PMI by adding a HELOC and paying down your first with it. Bring the LTV (Loan to Value) down to 78% and the investor will remove the PMI. The only hitch there is you are still paying the same PITI (payment Principal Interest Taxes and Insurance). Depending on your rate and these costs you might want to refi into this type of scenario, or do it on your own.
You would need to take into consideration how much, additional, the re fi would be with and without a prepayment penalty. Usually, this is any payment that exceeds 20% of the original loan amount. 63k is safe. 252k IS the base for a prepayment penalty. Rather than choose a company for its rate and payment, decide how long you want to be in debt and how much you want to pay back to the company.
There is a company I work with where there is no escrow- we set you upas your own escrow com., no PMI/MIP, no balloon payments, fixed rate only, equity building right fromthe begining, no cash at closing, andis "the last loan you will ever need." By paying monthly, your loan would be paid off in 27 years and five months.
How hard is it to refinance your home as a rental property?
Our current mortgage needs to be refinanced no matter what we decide to do, but we are considering using the home we live in as a rental and buying another house to live in. Our mortgage now requires that we live in the home. How difficult is it to refinance as a rental property? Our credit is good. Has anyone out there done this?
Most lenders will just require an assignment of rents and leases if you have checked zoning and gotten the permits and the things needed to set up a rental property in your state
This is not a problem. In CA you don't need any permits, I don't know where the other poster lives, but I have never heard of that.
Some HOA disallow renters, so you need to check that if you are in one of those communities.
The mortgage gets redone as an investment, which changes your taxes a bit. Use a tax professional to keep it straight and get all of your benefits.
Is it possible to refinance your home and include your car loans and credit card debt in the refinance?
With no money down? This is our first home and we've owned it for 4 years and looking to refinance.
Very bad idea. You take unsecured credit card debt and a car loan and put that all into your mortgage and you'll be paying on it for the next 30 years. Stringing it out means you'll pay a lot more interest.
Many people do this but turn around and run the credit cards right back up. And of course, you will need to buy a new car long before that mortgage is paid off. Now you have that bigger mortgage and all theother debt. If you can't keep up, you could lose your home.
If you refinance, do it to lower your interest rate. That will lower your payment and free up cash to throw at that credit card debt.
Why don't you sell your car to pay for your credit cards?
Can you refinance while your home is on the market for sale?
Our home has been on the market for a while now. We need to refinance to lower monthly payment. Can we refinance a home thats for sale?
The answer is yes you can BUT the reality is that it is hard to find a lender that will refinance your loan knowing that at any minute your home could be sold and they will waiste their time and money. Most lenders will ask you to take the home off the market before you can refinance.
Good luck!
I refinanced a year ago, and I'm selling now. Normally, even that is considered too close, but there's no real restriction on it...it just doesn't seem like it would be to your benefit if you can survive without the refi.
the reason is , the underwriter will look at it, in a
negative light. if the home will be Sold, why put
a new loan on it today. Thus, check with your loan officer for further instruction.
The reason lenders are reluctant to refinance you if you are planning to sell is that they will not be able to recapture any of their costs associated with doing the refinance. In a nutshell it costs them money if you turn around and sell it.
http://www.lendermark.com
what does it mean to refinance your home?
i would like to know how to refinance my home and car, but dont know what that will do to my credit. how do i do it and will it hurt my credit?
refinancing doesnt hurt your credit! not paying your creditors will!
contact a lender if you have enough equity you may be alble to get cash out to pay off car!
If you own a home, but your credit has become really bad,is it easy to refinance the home???
How long does it usually take to get a home refinanced and money to your bank???How does that process work???
No, it is not easy. Bad credit always hurts.
The bank/loan officer will ask questions about your assets and liabilities (what you owe). He will ask for the authorization to pull your credit report. From there he will take your credit score and how much of a loan you are asking for (comapring the amount to be loan versus the value of the house or LTV). He will compare it to rate sheets from different mortgage companies an dsee if a prodect works. Right now if your credit isnt good. It is difficult to get a loan and your interest rates may be high.
You say really bad, if you have charge-offs and a number of collection accounts, then most likely you will not be approved for a refi.
A refi can be completed in 2-4 weeks. The other question, is if you have bad credit, and you refi, your interest rate will be higher than your current rate, so your payments will go up, and what's the point of refi.
If you are looking to cash out equity, is that the best thing to do if you are having financial problems?
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What do they look at when they appraise your home for a refinance?
We are refinancing our home and as such, the bank is sending an appraiser over. What do they look at? Do they go through all the rooms and look at everything? How long does it usually take?
I'm mainly concerned that some rooms are messy and I have limited time tonight to straighten up. They scheduled this without much warning.
Don't bother straightening up or anything. Appraisers are trained to look through clutter and just see what features a house has. Even if a house needs paint or other minor cosmetic issues, this will not significantly affect the value of a house. They're looking mostly for structural features (how many bedrooms and bathrooms, square footage, views, and general condition).
But, you might want to make a list of any improvements you may have made since the last time the house was appraised. This information will be used to determine the extent of how customized your house is. That is, they have a subjective scale of how "improved" or "remodeled" a house is. The more you've done, the higher you are on the scale and they may give you more value for it.
But, don't worry about messiness or clutter. They don't care how good of a housekeeper you are.
Oh and, they probably will look through all the rooms to make measurements to verify square footage, see if there's closets, or whatever. It generally takes about a half hour to 45 minutes.
Do you have to pay any closing costs when you refinance your home?
I've been in my home for about a year, and with the fed cutting interest rates I've been thinking about trying to consolidate my two loans into one low interest mortgage. I've got 25% through Chase at 8.75% and the remaining 75% through Wells Fargo at 6.25%. I'm thinking about refinancing, but am wondering if I'd have to pay closing costs again. Does anybody know about the process involved? Thanks.
Yes, you have to pay closing costs REGARDLESS of what they tell you.
You'll either pay it in a rate hit, out-of-pocket, or they will roll it into the mortgage...but it will be there.
You will get a Good Faith Estimate and a TIL, just like you did with your original loan that will spell out the terms.
Here is the rule of thumb:
1. Make sure that you are beating your interest rate by a minimum of 1%.
3. Check for a prepayment penalty first.
3. Make sure that your monthly savings outpace the closing costs to 'recoop' in no more than 36 months, or it's not worth it.
For example, if your combined monthly payment is $1,000 per month, and your NEW mortgage payment will be $850 per month, and let's say your total closing costs are $3,000...you take the $3,000 and divide by the $150 per month savings...the figure that pops up on your calculator should be 36 or less.
Make sure you are also, planning on being in the home for longer than the number of months that pops up on the calculator...or else you have refinanced for nothing, and it's just money flushed down the toilet.
When is the best time to refinance your home?
I live in a condo, and we have a 100% mortgage. We have to pay mortgage insurance because it is not under 80%. So now our home is worth 170,000 and we paid 140000 for it, and we bought it in february. Is it bad to refinance this early? Please let me know the pros and cons of doing this. Will it poorly affect my credit? Does it cost alot? etc. etc.
If you are refinancing to remove the mortgage insurance, you may not need to. If you have been in the house over 2 years, have 20% equity, and have conventional mortgage insurance (not FHA loan) you can remove the mortgage insurance simply by having the house reappraised and then showing the lender you now have 20% equity. If the appraisal does not show 20% equity you will need to pay down the loan a bit to get that 20%. Note that the appraisers are usually conservative and the banks may be jerks about removing the insurance but keep at it and you can get it removed (assuming you meet the other standards).
As to when, otherwise, its worth it to refinance - I'd advise thinking long and hard about your situation and what you want to accomplish. If you plan on moving pretty soon (even within a few years) you probably won't get back the costs to refinance to its not worth it. If you have a good interest rate compared to whats available its probably not worth it. Still it you are staying there awhile and have a high interest rate (or varibale rate and want a fixed one or something) it may be worth it.
To find out for sure, figure out what your current rate is, what the new one is, what costs are = and crunch the numbers. Eloan used to be great to figure all this out (and then you can apply for a loan there if you like them - but be sure to compare other places too).
Good luck.
Is it alot of trouble to refinance your home?
alot of people talk about how they refinance their homes. do you have to come up with a down payment like the first time or what how does that work?