Carrie Reeder
With bad credit, refinancing your home online will help you find better quotes, service, and application process. With hundreds of sub prime lenders to choose from, you can be sure to find the lowest rates. You can also enjoy service that can be customized around your schedule, getting an answer almost any time of day. And of course, online loan applications will speed processing.
Online Offers Better Mortgage Refinancing Quotes
With thousands of lenders online, financing companies secure your business by offering competitive rates. Even with adverse credit, you can find refinancing rates only a couple of percent higher than the average loan. All it takes is a few minutes asking for loan estimates.
To save even more time, you can start with a mortgage broker site. By partnering with dozens of lenders, one site can offer you several side-by-side quotes. Most sites will also list closing costs and points required. Of course, you also have the choice of going to individual sites to collect quotes.
When you ask for a refinancing rate estimate, be as accurate with your information as possible. Enter a realistic credit score to get rate quotes that won't jump after your information is verified.
Find Better Mortgage Refinancing Services Online
Online lenders also strive to give you better service. Most companies offer a variety of means to connect with a service representative. You can usually call or email outside of business hours and still get a response. A lender's website is also filled with a wealth of information, answering the most common questions.
After your loan is completed, you will most likely be able to set up an online account to monitor your loan's repayment. You can check the status of your balance, interest rate, and even your payment status.
Better Refinancing Application Process
Once you have selected an online lender, you can submit your application online by entering your basic information over a secure connection. Or if you prefer, your application can be sent by mail for your completion.
With many lenders, final paperwork can be notarized at your home or workplace. A notary will arrive as scheduled so you don't have to make any special trips.
http://www.abcloanguide.com/lessthanperfectcredit.shtml for
2007-11-10
A Guide To Adjustable Rate Mortgage Terms
Terry Parker
An adjustable rate mortgage, ARM, is a mortgage that has a varying interest rate on the note. The interest rate on the mortgage periodically adjusts based on an index. Because of the varying interest rate, borrowers may notice their payments changing over time.
Adjustable rate mortgages are sometimes confused with graduated payment mortgages. With a graduated payment mortgage the interest rate remains fixed while the payment amounts change.
With adjustable rate mortgages much of the interest rate risk is transferred from the lender to the borrower. Borrowers benefit when interest rates on the mortgage fall. On the other hand, borrowers lose out when interest rates rise. Usually the loans are available when fixed rate mortgages are more difficult to obtain.
Index is the guide used by lenders to measure changes in the interest. Each adjustable rate mortgage is linked to an index.
Margin is the part of the interest rate from which the lenders profits. The margin plus the index rate is the total interest rate. While the index will change throughout the duration of the adjustable rate mortgage, the margin will not.
Adjustment period is the period between interest rate adjustments, usually denoted in the format of 1 to 1. The first number is the initial period of the loan for which the interest rate will remain the same. The second number is the adjustment period. It shows denotes the frequency at which the interest rate can be adjusted.
The index is one of the most important considerations in choosing an adjustable rate mortgage. Even though you don't have control over the specific index that is used by a particular lender, you can choose a loan and lender according to the index that will apply to the particular loan in which you are interested.
A lender you are considering can give you an indication of the performance of the loan in the past. The ideal loan is one that has an index that has historically remained stable. As you consider loans and lenders make sure you also consider the margin rate that the lender offers.
Many borrowers wonder about the benefits of an adjustable rate mortgage since the payments can increase over time. In most cases, the benefit of an adjustable rate mortgage comes into play when the interest rate of the ARM is lower than the fixed rate mortgage. The possibility of a payment increase is sometimes inconsequential. This is true if you do not plan to occupy the house for an extended period or if you expect your income to increase over the life of the loan.
Negative amortization is a key. Watch out when you are choosing an adjustable rate mortgage. This can occur when a particular loan as a cap on payments that keeps them from covering the amount of interest on the mortgage. As a result, unpaid interest is added to the loan, causing the amount of the loan to increase, even though you are making payments.
You can start out with a positive amortization on your adjustable rate mortgage but end up with a negative one due to interest rate increases. The best way to avoid negative amortization is to avoid adjustable rate mortgages that have a payment cap.
http://www.goldcrownmortgage.com/
An adjustable rate mortgage, ARM, is a mortgage that has a varying interest rate on the note. The interest rate on the mortgage periodically adjusts based on an index. Because of the varying interest rate, borrowers may notice their payments changing over time.
Adjustable rate mortgages are sometimes confused with graduated payment mortgages. With a graduated payment mortgage the interest rate remains fixed while the payment amounts change.
With adjustable rate mortgages much of the interest rate risk is transferred from the lender to the borrower. Borrowers benefit when interest rates on the mortgage fall. On the other hand, borrowers lose out when interest rates rise. Usually the loans are available when fixed rate mortgages are more difficult to obtain.
Index is the guide used by lenders to measure changes in the interest. Each adjustable rate mortgage is linked to an index.
Margin is the part of the interest rate from which the lenders profits. The margin plus the index rate is the total interest rate. While the index will change throughout the duration of the adjustable rate mortgage, the margin will not.
Adjustment period is the period between interest rate adjustments, usually denoted in the format of 1 to 1. The first number is the initial period of the loan for which the interest rate will remain the same. The second number is the adjustment period. It shows denotes the frequency at which the interest rate can be adjusted.
The index is one of the most important considerations in choosing an adjustable rate mortgage. Even though you don't have control over the specific index that is used by a particular lender, you can choose a loan and lender according to the index that will apply to the particular loan in which you are interested.
A lender you are considering can give you an indication of the performance of the loan in the past. The ideal loan is one that has an index that has historically remained stable. As you consider loans and lenders make sure you also consider the margin rate that the lender offers.
Many borrowers wonder about the benefits of an adjustable rate mortgage since the payments can increase over time. In most cases, the benefit of an adjustable rate mortgage comes into play when the interest rate of the ARM is lower than the fixed rate mortgage. The possibility of a payment increase is sometimes inconsequential. This is true if you do not plan to occupy the house for an extended period or if you expect your income to increase over the life of the loan.
Negative amortization is a key. Watch out when you are choosing an adjustable rate mortgage. This can occur when a particular loan as a cap on payments that keeps them from covering the amount of interest on the mortgage. As a result, unpaid interest is added to the loan, causing the amount of the loan to increase, even though you are making payments.
You can start out with a positive amortization on your adjustable rate mortgage but end up with a negative one due to interest rate increases. The best way to avoid negative amortization is to avoid adjustable rate mortgages that have a payment cap.
http://www.goldcrownmortgage.com/
Second Mortgage for Home Improvement
Jay Conners
Now that you have been in your home for a few years and you have established some equity, you may be considering doing some home improvement with a second mortgage.
Home improvement comes in many forms. Such as a new kitchen, bathroom, roof, siding, etc.
You can acquire a home improvement loan or second mortgage through one of three ways. Refinancing with cash out, a home equity loan, or a home equity line of credit.
My suggestion to you would be, a home equity line of credit. (HECL)
The HECL is a very convenient loan for a home owner because it is not mandatory that you use the funds right away. And when you do decide to use the money, you only use the amount you need.
Lets suppose you have a home equity line of credit for $25,000.00. The lender will give this money to you as a line for you to use, only when you choose to do so. The line also comes with a check book so you can write checks at your convenience.
A refinance with cash out, or a standard home equity loan is given to you in the form of a lump sum, and you begin paying the interest and principal immediately.
On the HECL you only pay interest and principal when you use the money, and only on the amount you use.
So lets suppose you hire a contractor to put a new bathroom in your house for fifteen thousand dollars. Upon completion of the project, you would than write a check from your HECL check book, it’s that simple.
At this time, your monthly payments would begin to kick in.
Most HECL’s are amortized over twenty years, and the payment is interest only for the first ten. So make sure you are aware of the payment schedule before you close.
Home improvement is a great step to take with your home. It not only adds value to your house, but it also improves the quality of your life. And the interest is tax deductible.
As always, continue to educate yourself, and make sure you shop around for the best deal.
http://www.explainingmortgages.com
Now that you have been in your home for a few years and you have established some equity, you may be considering doing some home improvement with a second mortgage.
Home improvement comes in many forms. Such as a new kitchen, bathroom, roof, siding, etc.
You can acquire a home improvement loan or second mortgage through one of three ways. Refinancing with cash out, a home equity loan, or a home equity line of credit.
My suggestion to you would be, a home equity line of credit. (HECL)
The HECL is a very convenient loan for a home owner because it is not mandatory that you use the funds right away. And when you do decide to use the money, you only use the amount you need.
Lets suppose you have a home equity line of credit for $25,000.00. The lender will give this money to you as a line for you to use, only when you choose to do so. The line also comes with a check book so you can write checks at your convenience.
A refinance with cash out, or a standard home equity loan is given to you in the form of a lump sum, and you begin paying the interest and principal immediately.
On the HECL you only pay interest and principal when you use the money, and only on the amount you use.
So lets suppose you hire a contractor to put a new bathroom in your house for fifteen thousand dollars. Upon completion of the project, you would than write a check from your HECL check book, it’s that simple.
At this time, your monthly payments would begin to kick in.
Most HECL’s are amortized over twenty years, and the payment is interest only for the first ten. So make sure you are aware of the payment schedule before you close.
Home improvement is a great step to take with your home. It not only adds value to your house, but it also improves the quality of your life. And the interest is tax deductible.
As always, continue to educate yourself, and make sure you shop around for the best deal.
http://www.explainingmortgages.com
2007-11-09
Got A Haunted Home With Your Refinance Home Mortgage?
Rony Walker
You just settled into your new home bought from refinance home mortgage. On the first night, you heard things up in the attic. You shrug it off, thinking it's only your imagination. The bumps in the night grew louder and things start flying off the wall. You're living in a haunted house! What to do?
Friendly and unfriendly ghosts
Unlike some home buyers, you see the house first before buying it to check if indeed the house is in good shape. But there are things agents will not tell you because you might back off the deal. Of course, it will depend on your taste - if you don't care a bit or if you are squeamish about ghostly sightings.
A haunted house does have to be Victorian mansion. It can be a townhouse in a posh village or a condo in upscale Manhattan. But the difference lies in what kind of ghosts are around. If the ghosts have been there before the American Civil War, they're "house-broken", but if you got a house where murders or mass suicides were committed, then that is a different story.
With your refinance home mortgage already signed, sealed and delivered, you can do little if you are denied a cancellation of the purchase. So you either learn to live with the ghosts and turn into a profitable bed and breakfast for rabid ghost hunters, or wait out the first year of the mortgage before you can sell. That is, if there are buyers.
Why they don't tell
Homeowners selling houses with a complete package of ghost sightings and flying objects are not telling. Haunted houses don't sell or are sold at low prices so sellers keep mum hoping to get a fair deal and get rid of their property in no time.
If you found a beautiful old house selling for a pittance, be suspicious - there could be ghosts around. Spooks aside, there are other things to watch out for before you plunk in your earnest money into a refinance home mortgage.
Check if the house is on an earthquake belt or on contaminated soil. You'll be smart too to check the foundation of the house and smoke out the presence of asbestos and radon. Do not always rely on the agent's pronouncements, even if she or he is your brother. Get an independent appraiser rather than be a scrooge. This investment will save you the sleepless nights ruing your mistake.
But if you know what it takes for a home appraisal, then get the home appraisal guide, and go over the house inch by inch from top to bottom.
Before you sign the deeds and agreements
In your enthusiasm, do not forget to ask how you can cancel should things go wrong. Ask a lawyer to review the contract or the agreement and get his advice on cancellation matters.
You have all the right to be careful. Isn't it your money that'll pay for the refinance home mortgage? So ask about cancellation upfront. Talk to the agent's broker if he refuses to a cancellation. If he also refuses, ask for another agent. If things are still sticky, then get a real estate lawyer to get you out of the pickle.
If you're happy living with ghosts
If you're clairvoyant, you might as well enjoy your house. A bed and breakfast and a crystal ball will auger well for your chances with a haunted house bought with your refinance home mortgage.
http://www.articlesbase.com/real-estate-articles/got-a-haunted-home-with-your-refinance-home-mortgage-247809.html
You just settled into your new home bought from refinance home mortgage. On the first night, you heard things up in the attic. You shrug it off, thinking it's only your imagination. The bumps in the night grew louder and things start flying off the wall. You're living in a haunted house! What to do?
Friendly and unfriendly ghosts
Unlike some home buyers, you see the house first before buying it to check if indeed the house is in good shape. But there are things agents will not tell you because you might back off the deal. Of course, it will depend on your taste - if you don't care a bit or if you are squeamish about ghostly sightings.
A haunted house does have to be Victorian mansion. It can be a townhouse in a posh village or a condo in upscale Manhattan. But the difference lies in what kind of ghosts are around. If the ghosts have been there before the American Civil War, they're "house-broken", but if you got a house where murders or mass suicides were committed, then that is a different story.
With your refinance home mortgage already signed, sealed and delivered, you can do little if you are denied a cancellation of the purchase. So you either learn to live with the ghosts and turn into a profitable bed and breakfast for rabid ghost hunters, or wait out the first year of the mortgage before you can sell. That is, if there are buyers.
Why they don't tell
Homeowners selling houses with a complete package of ghost sightings and flying objects are not telling. Haunted houses don't sell or are sold at low prices so sellers keep mum hoping to get a fair deal and get rid of their property in no time.
If you found a beautiful old house selling for a pittance, be suspicious - there could be ghosts around. Spooks aside, there are other things to watch out for before you plunk in your earnest money into a refinance home mortgage.
Check if the house is on an earthquake belt or on contaminated soil. You'll be smart too to check the foundation of the house and smoke out the presence of asbestos and radon. Do not always rely on the agent's pronouncements, even if she or he is your brother. Get an independent appraiser rather than be a scrooge. This investment will save you the sleepless nights ruing your mistake.
But if you know what it takes for a home appraisal, then get the home appraisal guide, and go over the house inch by inch from top to bottom.
Before you sign the deeds and agreements
In your enthusiasm, do not forget to ask how you can cancel should things go wrong. Ask a lawyer to review the contract or the agreement and get his advice on cancellation matters.
You have all the right to be careful. Isn't it your money that'll pay for the refinance home mortgage? So ask about cancellation upfront. Talk to the agent's broker if he refuses to a cancellation. If he also refuses, ask for another agent. If things are still sticky, then get a real estate lawyer to get you out of the pickle.
If you're happy living with ghosts
If you're clairvoyant, you might as well enjoy your house. A bed and breakfast and a crystal ball will auger well for your chances with a haunted house bought with your refinance home mortgage.
http://www.articlesbase.com/real-estate-articles/got-a-haunted-home-with-your-refinance-home-mortgage-247809.html
Be Sure You Have The Right Reason To Get A Home Refinance
Rony Walker
"Come into my parlor", said the spider to the fly. "We've got the lowest interest only loan. Just put up your house as equity." The fly immediately put up his house and went into the parlor, only to be devoured as a savory dinner. Are you that unfortunate fly?
Why are you getting a home refinance?
There are many reasons to get a home refinance, and 99.9% of these reasons are to pay off debts. Experts would advise to consider carefully your reason to refinance and stake your home.
Another reason to refinance is to get investment money for a business. This sounds good, but the risk is great. Would you dare navigate un-chartered depths at the risk of losing your home?
Perhaps you've got this zany idea to earn tax deductions so you took out a home refinance loan. In principle, you are paying a dollar to earn 30 cents, and for this you put your home.
Not all these reasons for home refinance are recommended. Your house is the biggest investment of your lifetime and putting it up for these flimsy reasons is nothing to crow about.
Better reasons to home refinance
Just because everybody has lined up for a home loan does not mean it will work according to your expectations. Loans have to be paid back. To be able to do so on the same amount of cash inflow for a number of years means changing your lifestyles and spending habits. Or like the fly, you will be dinner for the spider.
It is not easy to lose a home. Apart from destroying your credit score, you'll have to uproot your family from all that is dear. So play smart when you are getting a loan.
A bankable reason to home refinance is to get additional cash flow for your business expansion or fund a wife's last year in college. Both ways you see an end goal towards increased revenues and income.
How to get a better deal
Depending on your financial motivation like cash flow flexibility, you are looking at more savings in a year's time from a lowered monthly payments compared to your current mortgage.
Remember that the longer the loan term, the lower the monthly payment. If you add up all your expenses in 30 years time, you'll have paid more than double the loan amount. So get a lower interest rate and be sure there are no additional or hidden costs.
If you have a $200,000 30-year mortgage loaned on an interest rate of 8%, you'll have paid $440,400 at $1,468 a month. If you refinance at 6% you will be paying $1,199 a month or a total of $359,700. But wait, there's more. Depending on the closing costs, it will take months before you can break even.
If you are staying in the house for more than 10 years get the fixed rate but if you are going to sell the house in five year's time better get the adjustable rate mortgage.
Never rush into a home refinance. Take your time until you have understood all the workings of your target refinance program. Read the contract carefully.
Be ready to pay and change your lifestyle. No matter the advantages of your home refinance, if you fail keeping up with the payments you'll get the short end of the stick.
http://www.whataboutloans.com/mortgage/mortgage-refinance-loans.html/
"Come into my parlor", said the spider to the fly. "We've got the lowest interest only loan. Just put up your house as equity." The fly immediately put up his house and went into the parlor, only to be devoured as a savory dinner. Are you that unfortunate fly?
Why are you getting a home refinance?
There are many reasons to get a home refinance, and 99.9% of these reasons are to pay off debts. Experts would advise to consider carefully your reason to refinance and stake your home.
Another reason to refinance is to get investment money for a business. This sounds good, but the risk is great. Would you dare navigate un-chartered depths at the risk of losing your home?
Perhaps you've got this zany idea to earn tax deductions so you took out a home refinance loan. In principle, you are paying a dollar to earn 30 cents, and for this you put your home.
Not all these reasons for home refinance are recommended. Your house is the biggest investment of your lifetime and putting it up for these flimsy reasons is nothing to crow about.
Better reasons to home refinance
Just because everybody has lined up for a home loan does not mean it will work according to your expectations. Loans have to be paid back. To be able to do so on the same amount of cash inflow for a number of years means changing your lifestyles and spending habits. Or like the fly, you will be dinner for the spider.
It is not easy to lose a home. Apart from destroying your credit score, you'll have to uproot your family from all that is dear. So play smart when you are getting a loan.
A bankable reason to home refinance is to get additional cash flow for your business expansion or fund a wife's last year in college. Both ways you see an end goal towards increased revenues and income.
How to get a better deal
Depending on your financial motivation like cash flow flexibility, you are looking at more savings in a year's time from a lowered monthly payments compared to your current mortgage.
Remember that the longer the loan term, the lower the monthly payment. If you add up all your expenses in 30 years time, you'll have paid more than double the loan amount. So get a lower interest rate and be sure there are no additional or hidden costs.
If you have a $200,000 30-year mortgage loaned on an interest rate of 8%, you'll have paid $440,400 at $1,468 a month. If you refinance at 6% you will be paying $1,199 a month or a total of $359,700. But wait, there's more. Depending on the closing costs, it will take months before you can break even.
If you are staying in the house for more than 10 years get the fixed rate but if you are going to sell the house in five year's time better get the adjustable rate mortgage.
Never rush into a home refinance. Take your time until you have understood all the workings of your target refinance program. Read the contract carefully.
Be ready to pay and change your lifestyle. No matter the advantages of your home refinance, if you fail keeping up with the payments you'll get the short end of the stick.
http://www.whataboutloans.com/mortgage/mortgage-refinance-loans.html/
Why Debt Consolidation Refinance Is Good For You
If you are like some individuals who are currently living from one paycheck to another and – though with a regular salary – can't seem to remember how they spent their last salary, then you may need a financial makeover. Better yet, maybe it is time for you to consider a debt consolidation refinance.
It gets rid of annoying phone calls
A debt consolidation refinance helps in eliminating harassments creditors make just for you to fork up that credit card payment. Also, a debt consolidation refinance basically consolidates every bill that you have and are paying for into one payment, usually per month, in an amount that is quite lower than what you used to pay. This is in order to alleviate any stress brought about by financial pressures.
Saves you from bankruptcy
Believe it or not, debt consolidation refinance helps keep your finances from going bankrupt thereby helping you save your image as a consumer that is worth a credit.
When do you need a debt consolidation refinance?
It is time for a debt consolidation refinance the moment you feel the economic crunch weighing on you, in the sense that the bills that come every month seem to becoming more difficult to pay.
A debt consolidation refinance saves you from having to pay high, if not outrageously ridiculous rates of interest and fees for late payment. These additional and truly unnecessary factors only add to your current difficult financial state.
Another sign that it may be a good idea to consider debt consolidation refinance is if the amount due you get to pay every month seem to always be the minimum that your monthly bills never seem to change much less decrease.
Why home-owners can get out of the debt consolidation refinance
There are benefits that debt consolidation refinance provide homeowners. One is that they have the fortunate opportunity to apply using their homes equity. Through this way, discipline is established in paying monthly consolidated bills, thereby avoiding new unnecessary bills from incurring.
Be aware though that using your house as a collateral isn't advisable, unless there is an intention that payments will be made using the new debt loan consolidation.
All in all, debt consolidation refinance is a good option when you seem to think you are running out of one. It saves you time, money and the stress of thinking up of ways to pay up without losing your shirt.
http://www.freearticles.com/article/Why-Debt-Consolidation-Refinance-Is-Good-For-You/1715
It gets rid of annoying phone calls
A debt consolidation refinance helps in eliminating harassments creditors make just for you to fork up that credit card payment. Also, a debt consolidation refinance basically consolidates every bill that you have and are paying for into one payment, usually per month, in an amount that is quite lower than what you used to pay. This is in order to alleviate any stress brought about by financial pressures.
Saves you from bankruptcy
Believe it or not, debt consolidation refinance helps keep your finances from going bankrupt thereby helping you save your image as a consumer that is worth a credit.
When do you need a debt consolidation refinance?
It is time for a debt consolidation refinance the moment you feel the economic crunch weighing on you, in the sense that the bills that come every month seem to becoming more difficult to pay.
A debt consolidation refinance saves you from having to pay high, if not outrageously ridiculous rates of interest and fees for late payment. These additional and truly unnecessary factors only add to your current difficult financial state.
Another sign that it may be a good idea to consider debt consolidation refinance is if the amount due you get to pay every month seem to always be the minimum that your monthly bills never seem to change much less decrease.
Why home-owners can get out of the debt consolidation refinance
There are benefits that debt consolidation refinance provide homeowners. One is that they have the fortunate opportunity to apply using their homes equity. Through this way, discipline is established in paying monthly consolidated bills, thereby avoiding new unnecessary bills from incurring.
Be aware though that using your house as a collateral isn't advisable, unless there is an intention that payments will be made using the new debt loan consolidation.
All in all, debt consolidation refinance is a good option when you seem to think you are running out of one. It saves you time, money and the stress of thinking up of ways to pay up without losing your shirt.
http://www.freearticles.com/article/Why-Debt-Consolidation-Refinance-Is-Good-For-You/1715
2007-11-08
Refinance Your Home Mortgage: How to Avoid 5 Costly Mistakes
by BLAKE BALLEW
Warning: Do Not Refinance Your Home Until You Read This Report! Mistake
#1 – Refinancing only to obtain a lower interest rate So why are you refinancing your mortgage loan? Are you trying to save money through a lower monthly payment? Are you trying to reduce your interest rate? Are you hoping to combine your refinance with a cash-out equity loan? If you’re simply trying to find a lower interest rate, make sure you calculate the related fees and closing costs. These fees might make you rethink the process. Unless you can save enough money to easily cover these costs, refinancing may not be right for you. Mistake
#2 – Cash-Out Refi to Pay off Unsecured Credit Card Debt Many people opt for what’s called a cash-out refi. This not only can save you money on your monthly mortgage payment, but can provide you with cash to pay off high-interest credit cards. We recommend that you review all of your options before choosing this path. Are you really desperate enough to get rid of your unsecured debt that you would consider putting your home on the line? Review other options first, like calling your creditors and asking them to reduce your interest rates and save your home equity for a rainy day. Remember, you can always refinance without having to touch your home equity. Mistake
#3 – Not Asking About Points In their simplest form, Points are up-front mortgage interest fees paid on a loan to reduce the initial interest rate. Points are fees the borrower pays the lender at the time of loan closing. If you pay one point (1%) on a $100,000 loan, then you will pay the lender $1,000 at loan closing, but will reduce your long-term interest rate, which will save you money throughout the life of your loan. Some loan rates have points already built-in, so you need to make sure the lender is very clear on how many points are being charged. Mistake
#4 – Refinancing into an ARM or Interest-Only Loan In some cases, it makes sense to refinance into an Adjustable Rate or Interest-Only loan. But be aware of the ramifications. While you might refinance into an ARM and initially save money; over the years, your interest rate may creep up and end up eating-up the refinance savings. Interest-only loans are another popular option, but they’re not right for everyone. Interest-only loans are actually only “interest-only” for a short period of time, like 5-10 years. This means that eventually, your payment will start to include principal again, and if you can’t afford to pay the principal at that time, you might be forced to refinance again! Always plan long-term. Mistake
#5 – Not getting a Guaranteed Lowest Bottom-Line Cost All lenders are required by law to provide what is called a Good Faith Estimate of Closing Costs. Use this “Good Faith Estimate” as a tool to find the lowest price. You should ask any lender you speak with for a guarantee that clearly states, in writing, that they have the lowest bottom-line closing cost. If they can’t provide you such a guarantee, in writing, you should find another lender.
Warning: Do Not Refinance Your Home Until You Read This Report! Mistake
#1 – Refinancing only to obtain a lower interest rate So why are you refinancing your mortgage loan? Are you trying to save money through a lower monthly payment? Are you trying to reduce your interest rate? Are you hoping to combine your refinance with a cash-out equity loan? If you’re simply trying to find a lower interest rate, make sure you calculate the related fees and closing costs. These fees might make you rethink the process. Unless you can save enough money to easily cover these costs, refinancing may not be right for you. Mistake
#2 – Cash-Out Refi to Pay off Unsecured Credit Card Debt Many people opt for what’s called a cash-out refi. This not only can save you money on your monthly mortgage payment, but can provide you with cash to pay off high-interest credit cards. We recommend that you review all of your options before choosing this path. Are you really desperate enough to get rid of your unsecured debt that you would consider putting your home on the line? Review other options first, like calling your creditors and asking them to reduce your interest rates and save your home equity for a rainy day. Remember, you can always refinance without having to touch your home equity. Mistake
#3 – Not Asking About Points In their simplest form, Points are up-front mortgage interest fees paid on a loan to reduce the initial interest rate. Points are fees the borrower pays the lender at the time of loan closing. If you pay one point (1%) on a $100,000 loan, then you will pay the lender $1,000 at loan closing, but will reduce your long-term interest rate, which will save you money throughout the life of your loan. Some loan rates have points already built-in, so you need to make sure the lender is very clear on how many points are being charged. Mistake
#4 – Refinancing into an ARM or Interest-Only Loan In some cases, it makes sense to refinance into an Adjustable Rate or Interest-Only loan. But be aware of the ramifications. While you might refinance into an ARM and initially save money; over the years, your interest rate may creep up and end up eating-up the refinance savings. Interest-only loans are another popular option, but they’re not right for everyone. Interest-only loans are actually only “interest-only” for a short period of time, like 5-10 years. This means that eventually, your payment will start to include principal again, and if you can’t afford to pay the principal at that time, you might be forced to refinance again! Always plan long-term. Mistake
#5 – Not getting a Guaranteed Lowest Bottom-Line Cost All lenders are required by law to provide what is called a Good Faith Estimate of Closing Costs. Use this “Good Faith Estimate” as a tool to find the lowest price. You should ask any lender you speak with for a guarantee that clearly states, in writing, that they have the lowest bottom-line closing cost. If they can’t provide you such a guarantee, in writing, you should find another lender.
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