Apr
9
If you are having a difficult time paying your mortgage payment, a no closing cost refinance mortgage may help. Obtaining a lower interest-rate mortgage-payment can be a breath of fresh air to many borrowers. Interest rates go down regularly and the way to capture thosee savings? Refinance.
Look at your current interest rate and compare it with the loans available and the terms of those loans (terms essentially means how many years). Consider refinancing if your existing mortgage rate is higher, you need to get out of an ARM (Adjustable Rate Mortgage – a loan where the rate may change based on the terms) and you will sell your home soon. If you plan to sell in the near future, you many not have time to break even on the home. This is because the cost for refinancing may not be recouped unless the difference in your monthly payments is low enough.
So who pays for the no cost-refinance? In a no cost situation, the lender will pay the settlements expenses including the underwriter fees, appraisal fees, title fees and escrow. The interest rate may be slightly higher on this loan, although if the interest rate is still lower than what you currently have you still will lower your payments. In some cases, this will save your credit, because you are now able to keep timely payments up to date on your mortgage. Phew… But again keep in mind that if the interest rate is higher than a standard mortgage rate, it will take you longer to get your money back.
Some lenders will add the closing cost to the loan and have it be a no cash refinance. This still enables you to refinance without added expense of having to put money up front. This means you still pay the costs, but instead of writing a check for it, the costs are added to the balance of your mortgage. If the mortgage is at a lower interest rate, it is still advantageous to do.
In the current economy, any way to improve your budget and reduce your mortgage payment is a winner. Keeping your credit in good standing is certainly very important. By refinancing without having to have a considerable amount of money to obtain a better interest rate is a great idea. Do the paperwork and read over what no-cost refinance mortgage options are available to lower payments. It is always a smart move to save money and with no up front expenses it is a smart option.
Apr
6
There are several things to consider when investigating the possibility of refinancing your mortgage with no closing costs. It could simply mean there will be no added expenses. Alternatively, you could pay zero closing costs because you will be paying a higher rate of interest. There are two common types of programs available when investigating no cost refinancing.
One type is called a yield spread. With that type of refinancing, the lender pays the costs for the refinance. Carefully, though, check the interest rate that you will be paying. If you can lower your interest rate by at least two percentage points, and pay no closing costs, you have a great deal for lowering your monthly mortgage payments.
Another program for refinancing is simply where you roll the costs of the refinance into the amount you are borrowing. If there is equity in your home, and you are able to borrow more than what is currently owned, all of the expenses of the refinance get added into the new amount that you would own. If you will be living for five years or more in your current home, this is a good option. Typically, refinance costs only add a small amount to your monthly mortgage payments and this can be a cost effective way for you to get a much better mortgage rate.
No matter what direction you take, be sure to check out several lenders in your area. Make sure that when they advertise a no closing cost refinance mortgage they really mean it. You should be able to refinance, at a lower interest rate, with absolutely no out of pocket cost to you. In addition, keep in mind that some things done at the original closing do not need to be redone, such as the title search since the title is not changing in a refinance.
Apr
5
If you have filed for a Chapter 13 or a Chapter 7 bankruptcy, you may be wondering whether you qualify to refinance your mortgage. Refinance after bankruptcy is possible if you maintain decent credit after your bankruptcy is discharged. Follow the steps below and make a challenging situation much easier to deal with.
Step #1: If you have already filed bankruptcy, it is important you understand the difference between a Chapter 7 and 13. Chapter 7 bankruptcies are designed for individuals who want to liquidate their assets. Chapter 13 bankruptcies are for wage earners. The main difference between each is when the bankruptcy is discharged. For Chapter 7 filers, discharging takes just a matter of months. For Chapter 13 filers, discharging can take between 3 to 5 years. During this time, you may be eligible for a refinance after bankruptcy if you show 6 to 12 months of payments as agreed upon.
Step #2: Prepare yourself financially for refinance. Obviously, if you want to refinance your home you already own a primary residence. You will need to keep up with your mortgage payments to prove you are a responsible borrower. This is the first step to re-establishing your credit after bankruptcy. Make sure to pay your auto loans on time and consider getting a secured credit card to improve your credit score. When you prepare your credit score for refinance, you will have better chances of getting approved.
Step #3: Contact an expert to get the fair market value of your home. With the fair market value of your home, you can see how much equity is in your home to see if you qualify for a refinance after bankruptcy. If you have a Loan To Value of over 75 percent, you may have difficulty qualifying for any loan regardless of your bankruptcy.
Step #4: Come up with a plan to generate cash. After you file bankruptcy, lenders want to see that you have enough money in savings to pay for your mortgage when times are tough. If you have cash reserves, it is easier to qualify for a mortgage refinance after bankruptcy.
Step #5: Expect denials if your discharge was less than 2 years ago. Refinancing shortly after bankruptcy is not impossible, however, since the housing bubble burst of 2007, qualifying for home loans is much more difficult. You may have to fill out several different applications to find a lender willing to take on the risk.
With low mortgage rates, now is the time to refinance. If you are in a stable financial situation and you have re-established your credit, consider the benefits of refinance after bankruptcy.
Apr
4
Times are tough. We know. But here are some quick tips to help pull you through the rough spot.
After bankruptcy, an individual can still receive mortgage refinancing through a number of different options. One of the simplest methods is to find a qualified attorney that specializes in assisting borrowers that have to file this kind of paperwork. An attorney can also help to mediate between you and the creditors you are dealing with. They should be well versed in legal financial procedures and should be able to help you get a good deal on your loan.
When trying to get a mortgage after bankruptcy, your credit rating will greatly affect the type of loan you get. If someone has a low credit score, they may not be able to qualify for some loans because the creditors will see the low score as a sign that they cannot make their payments. Similarly, a person who has gone bankrupt may not be able to apply for some kinds of loans. There are bankruptcy mortgage refinance loans available, but they often have high interest rates due to the risk involved in loaning to someone who has gone bankrupt. But BE CAREFUL! It is important to check the fees of the refinancing loan first because some brokers may charge astronomical prices. One way to get a better rate is by proving for a few years that you can handle your finances by paying all your bills on time, this way you will be able to apply for much cheaper financing loans.
It is also important to pre-qualify before getting a bankruptcy mortgage refinance. Pre-qualifying is simple and will give the homeowner an idea of the amount of money that can be borrowed by the applicant. When looking for mortgage lenders, try to find the ones that have a “damaged credit” program that you can easily apply for if you are in bankruptcy. Friends and relatives can also help point you towards a good mortgage refinancing program of course.
Is getting a mortgage after a banruptcy easy? No… But it is possible. You may not be able to do so the month following a bankruptcy but hang in there. Again, seek good legal counsel when weighing any of your options. There are lenders out there willing to work with you and you will be able to get into a home again.
Stay strong and never stop learning!
Apr
3
The old adage, nothing in life is free, also applies to no-cost mortgage refinancing. Sometimes this type of financing or refinancing can be somewhat misleading. Normally, people who are looking to refinance their home may choose this financing package, as they may not have to pay any upfront costs. Homeowners will explore this particular scenario when the interest percentage rates are lower than what they are currently paying.
This could be attractive for those that do not want to have to pay out of pocket fees, closing costs or any other costs associated with the loan, however, these costs will actually have to be paid and the lender will increase the interest rate by .25 to .5 percent to cover the costs.
There are several different methods to securing this style of mortgage. One such way is to not pay any points, but you would pay any lender fees as well as any third party charges. There is also the zero lender fees, however, you may have to pay the third party charges. The last option is the no cash upfront method, which means that these costs will be repaid through the interest charged.
Before deciding whether this option is good for you, you need to consider that if you plan on keeping your home for longer than five years, it may end up costing you a significant amount of money. In this scenario, it would probably be best to pay these fees upfront and save the money over the duration of the mortgage. No cost mortgage refinance options are best for those that will only keep their home for less than five years.
You will need to weigh the amount of money that you will save upfront as opposed to what you be charged throughout the duration of your mortgage. If this is something you are considering, you will need to make sure that the mortgage rate is lower than which are currently paying and the additional closing costs will not cost you additional money. Many mortgage lenders and banks will offer this type of refinancing package. It is recommended that you compare rates and shop around for the best lending package available before you make your final decision.
Apr
2
It’s a fact… Many homeowners need to refinance their home for a number of reasons. The reasons are less important than the fact that consumers need to pick the right refinance deal for them. There are three main mortgage refinance tips to finding the best deal but each homeowner has to decide what is most important to them. Borrowers will shop for loans just as they shop for a car or for the cheapest gas. After they find a good deal, they compare the offers and analyze the difference between them.
For most people there are three parts to getting a loan. The first part is the amount of the monthly payment. The second part is the interest rate. The third part is the cost to get the money, which includes the appraisal fee, and credit report cost. Each person will have one of these three that is most important to them and that is what they need to concentrate on first. Most lenders will require the fee for the appraisal and credit report, which can be $400 to $500 before they start the loan process. There is a no closing cost refinance mortgage that is offered by some lenders. These mortgages may charge a higher interest rate but do not require the borrower to pay any fees up front. So here we can see one must decide is it reduced up front costs that are more important or a lower long term rate.
It is important that the borrower shop for the best deal they can get. A typical home loan will last for 30 years; a difference of $20 a month adds up to $7200 in 30 years. Different mortgage brokers and different lenders have different programs; therefore they charge different fees. By shopping and finding the best deal of homeowner can save thousands of dollars.
Side note: Some of these lenders can do a refinance after bankruptcy by using a subprime mortgage refinance. If you are considering bankruptcy, ask your bank what their options are for refinance or what they can do BEFORE you consider bankruptcy.
Once a homeowner receives offers from several lenders, they need to compare the different offers. Compare rates, terms, closing costs, bank fees, attorney fees, etc. This should be presented to you on the Good Faith Estimate or GFE. It is easy to know how much cash for closing each offer requires for instance by reviewing this one to two page document. That is of course, unless the homeowner gets a no closing cost refinance mortgage which will require no cash out of pocket to get the loan. One of the better mortgage refinance tips is to compare the difference over the life of the loan. By multiplying the monthly payments times the 12 months in the year times the number of years, a homeowner will have the total amount of money to be paid back. This will let the homeowner know the real difference between the different loans in real dollar terms.
These mortgage refinance tips are to help the borrower decide what is most important to them, to shop for the loans and compare the different loan options. This way each homeowner will choose them best refinance for them.
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