Homebuyers have several loan options. Hence, purchasing a new home has
never been easier. Individuals who cannot afford a down payment or
closing costs may take advantage of loan programs that offer assistance.
Furthermore, those hoping to obtain a low rate mortgage may consider a
loan with an adjustable rate. Because of the initial low cost of
adjustable rate mortgages, monthly mortgage payments are also lower. However,
low rate mortgages are short term. To avoid an interest rate hike,
homeowners should refinance before rates begin to increase.Advantages of Adjustable Rate MortgagesThere are several advantages to accepting an adjustable mortgage. For
starters, a low rate mortgage allows buyers to purchase pricier homes,
while maintaining an affordable monthly payment. Moreover, because of
record low rates, homebuyers who obtain an adjustable rate mortgage can
enjoy falling rates without refinancing their mortgage. Thus, they avoid
closing costs and other fees.Adjustable rate mortgages are also ideal for individuals who plan on
moving in a few years. Some people enjoy the stability of living in one
place for many years. In this case, refinancing for a fixed rate is a
wise choice. However, if you prefer the flexibility of moving every three
to five years, you will save money with an adjustable rate.Pitfalls of Adjustable Rate MortgagesWhile adjustable rates offer many attractive features, one major
drawback is that low rates are temporary. If interest rates continue to fall,
you will not be subjected to the dangers of these loans. However, if
rates begin to climb, so will your mortgage payment. Homebuyers who
cannot afford an increased mortgage are at risk of losing their home. Thus,
if your goal is to remain in your current home for many years,
refinancing for a fixed rate will offer predictable mortgage payments.How Soon Can You Refinance a Mortgage?Fortunately, home mortgage loans can be refinanced whenever you like.
Some lenders suggest allowing the loan to mature at least 12 months.
However, if you detect a change in market trends, refinancing shortly
after purchasing your home is a smart maneuver. Those contemplating
refinancing must be prepared to pay additional closing fees. Moreover, contact
your current lender and inquire of prepayment penalties.
There are a lot of people across the country who are in adjustable home mortgage loans that will be resetting very soon. If you are among this group of nervous home owners and are not yet sure what you need to do then keep reading because this article will help you understand your options when you have a variable rate loan that is going to reset.When Should I Start Thinking About Refinancing My ARM LoanFirst the best time to start looking at your options is around six months before your rate is set to change. The time period of six months will give you enough time to shop with different lenders and not feel under pressure to just get the loan done! Also if you have any problems with credit or other financial issues this will give you enough time to address them. If you are unsure of this look in your loan paper work for your ARM rider. This document will tell you when the loan will change.Where Should I Go To Refi My Adjustable Mortgage?the next step is to call a few local mortgage companies,banks and credit unions. Inquire about the rates for a fixed rate home loan and also ask them what the closing costs are when you do a loan with them and if the rate includes any points. This is very important because rates and closing costs are quite different from one bank to the next and you will want to get the best deal possible!How Long Will It Take To Close The LoanOnce you have found the lender with the best deal to refinance your adjustable rate home loan let them pull your credit and see how everything looks. If it looks god you can continue on with the process and get your home appraised and close the loan. generally the loan closing process takes about 30 days.
Home equity lines are an extremely beneficial way of borrowing a loan, wherein one takes a loan against their Miami home. The home serves as security, against the loan amount. To have a home in a popular city like Miami is an added advantage. The lenders are assured that their credit is safe as Miami is a hot favorite with tourists from all over the world. The buyers too are assured of high returns on their investment, owing to the sound economy of Miami.Advantages Of Home EquityHome equity lines of credit have many advantages over a regular loan. It gives you the flexibility of borrowing a large sum of money according to your need. You can easily access the funds, as and when you need them. This way you and other Miami home owners can save money by paying interest only on the amount borrowed. Most of the times, the interest is also tax deductible, which means, you save more money.Home Equity Lines – Some DrawbacksHome equity lines also have some shortcomings. As this is not a fixed loan, the rate of interest can change anytime. Thus, the payments also change. Interest rates are high as compared to a fixed loan, but that is the price you pay for the flexible nature of this loan. This may make it difficult to refinance your first mortgage.You must also know that the amount that you can borrow on your Miami home is calculated in a certain way, which may differ marginally from lender to lender. A percentage (set at 75% to 80%) of the assessed value of the house is taken. From this amount your remaining dues in mortgage are deducted. The amount reached at, is the available line of credit for your Miami home. This available limit varies from one client to another in accordance with their capacity to pay back the loan.Before deciding to opt for home equity lines, you must ascertain whether the cost you are paying is well-worth it, in terms of the benefits that you are getting. The conditions laid down by the financial organization should fulfill all your requirements and at the same time, not pose excessive financial burden on you. If these things are not taken care of, you will fail to make your payments on time.Your Miami home is your most precious asset, don’t lose it.
All across the world there are home owners that cannot refinance their mortgages because for one reason or another they are stuck in adjustable rate loans. If this sounds like your situation then you may want to keep reading the article below as it will give you some effective advice to get back on track with your loan!Why Can’t You Refinance?Most of the problems are traced to the dropping property values that happened when the economy crashed. Many people who bought with zero down or refinanced almost all of their equity now owe more then their home will appraise out for.Many people also used loan programs that are no longer available to them. People that used stated income programs are the most commonly affected group of people. These are usually self employed people or people who have seasonal incomes or work for tips and cannot fully document what they earn.Another common reason is that now banks require very good credit to get approved for a home loan. If you had bad or marginal credit when you first got your ARM mortgage chances are that now the programs and lenders you used are gone.What Can I Do If I Am Stuck In My Adjustable MortgageThere still is the government programs available that can help you modify or refinance your loan, even if you owe more then its worth. However these programs only apply to borrowers with Fannie Mae or Freddie Mac Loans and not people who have Alt-A or Sub Prime mortgages.What If I Do Not Qualify For The Government Programs?Then you will need to get in contact with your existing note holder and discuss your situation with them. In alot of cases the last thing the lender wants is another foreclosed property on the books and will be willing to work with you to keep you out of foreclosure.They may give you a loan modification and alter the terms of your loan to make your rate a fixed instead of a variable or they may also extend the fixed rate term out a little longer giving you a chance to get back on track. Just make sure to contact them early on and be 100% honest with them.
Over the last five to ten years millions of homeowners across America have purchased or refinanced mortgages with adjustable rate ARM loans. Many of these loans are just getting ready for there first rate adjustment and this is getting man home owners to refinance their ARM to a fixed rate.Unfortunately many home owners are for one reason or another just plain unaware of the terms of their home loans and many will be surprised with the first interest rate adjustment notice. And many of these loans adjust every six months to a year, so it pays to know what kind of loan you have.How Do I Know If I Have An ARM LoanIf you think you have an ARM home loan the best way to find out is to grab your closing documents and look over your loan papers. You are looking for something called the adjustable rate rider. This document will explain the terms of your adjustable loan and If you find this in your loan packet you have an ARM. Study this document as it will tell you when your loan is set to adjust and by how muchSwitching To A fixed Rate MortgageIf you have equity in your home and have good credit you are in luck because interest rates are still relatively low. And by taking advantage of these low rates and refinancing into a fixed rate mortgage you will gain stability and in most cases a lower payment then your adjusted ARM required. You will just have to go through the standard refinance process over again which is fairly straight forward.What If I Cannot RefinanceIf however you have no equity in your home or a low credit score and are unable to refinance your ARM loan into a fixed rate mortgage you could be facing some serious hardships. To avoid this you should contact your mortgage lender and try and work out a loan modification with them. If you have always been a reliable customer lenders will often change ARMS that are hard for customers to pay into more stable fixed rate home loans.