The numbers of home owners refinancing are on ever increasing note. Most of the homeowners opt for refinance home loans to lower the interest rates by which they can gain a considerable amount of money. It is a myth that only homeowners who are on a default or in foreclosure choose to refinance their home loans. Any individual who wants to have better conditions and features for their home loans can do this. Most people approach the local banks and lenders. However, national banks and other larger group of financial institutions offer loans at cheaper interest rates.Some of the disadvantages of the big banks are their location. People living in far away locations cannot approach the banks for every single process. It might be time consuming and add unwanted time to the process. By gathering the documents in advance, borrowers could make the whole process as fast as possible.Documents needed:o The most recent pay slip of an employee is needed to verify income and employment information.o Home owner’s insurance information will help in better negotiation with the lenders. This gives much information regarding who gets paid on occasions of any damage done to the property.o Last two years W-2 is essential which will help the lenders to know about the various income levels and income to debt ratio levels.o Financial account statements such as 401k, retirement accounts are necessary will help the lenders to determine the eligibility for the loan amount.o The purchase transactions alone require the landlord contact info to know about the regular rent payments.The above said documents are needed for the pre-approval of loans. However, there can additional documents needed by the lenders to analyze fiscal position to refinance home loan. The borrowers need to have prior knowledge on the proceedings to avoid any delay in getting the loan.
Refinancing means taking a loan to repay one of your existing loans and finance the same with the new loan. Refinancing home loan is for repaying the home loan you have already taken and finance the rest with this new loan. There are several reasons why people go for refinance. These are as follows:o You need to use your Home equity which has been used as collateral.o You may need to consolidate debts.o To get a flexible loan.o To get added features in the loan.o To get a loan on better interest rates.o To move from fixed to variable rate in home loan.Home loans are offered by different banks and financial institutions. There are so many players in the market that these players are offering loans at very competitive rates to attract customer attention. A layman would get confused with everybody offering so many features all the loans look beneficial and the best one to fulfill their need.But choosing a refinance scheme is not so easy. So better be careful and compare the entire borrower’s offer that is there in the market. Read their offers carefully and look for hidden clauses as most of them have it. A refinance is costly as it involves the following expenses:o A new loan entails the establishment and application fee.o The fee that is charged by the borrowers for early settlement in case of existing loan.o Then there is also a discharge fee on the current loan.o Some of the lenders also require Valuation fee.o The legal fees that are charged by some of the lenders.Refinance Home loanGo for refinance only if you need it. It requires a lot of detailing. Before taking the decision consider these things.o Has your income changed? Or have your liabilities changed. Only if these two have changed consider refinancing.o Are the features in your existing loan in tandem with the ones offered in the market and are they satisfactory.o Are the services of your existing lender up to the mark?Some of the companies also show you the comparison rates. These are very helpful when it comes to comparing features of all the loans that are being offered in the market. The rates will obviously not be very different but will differ closely. Choose the one offering loans at the least rate even if is only 0.8%.One should always put in a lot of thought and do a lot of research when it comes to money matters. That is why in case of refinancing first see if you really need it. Refinancing home loans involve a lot of expenditure. Consider them and take your decision.
As a first-time home buyer, your home is one of your most valuable assets. And, no doubt buying your home was the most important financial decision you ever made.At the time that you took out your mortgage loan, you were able to qualify for a certain interest rate. The rate for which you qualified was determined in large part by your FICO, or credit, score at that time.Now, if more than a year or so has passed since you took out your loan, one of two things may have happened:a. Average mortgage interest rates have taken a diveb. Your credit score has improvedAnd, if BOTH of these things have happened since then, the situation is particularly in your favor. Why? Because this type of situation can easily translate into your being able to qualify for an interest rate that is one or more interest points lower than what you are paying right now. This can mean huge savings in your monthly payments and total interest paid over the life of the loan. The best way to do this? Through refinancing your mortgage loan.If you are looking for first-time home buyer refinance home loans, here are 5 ideas that can help:1. First-time home buyers can enjoy a number of benefits and perks:As a first-time home buyer, you may have been able to qualify for everything from federal tax exemptions to state or local-level perks such as grants for a down payment, the covering of certain closing costs, or even a discounted loan rate.2. Refinancing a home means you are taking out your second home loan:However, now that you own your home and have successfully qualified for your first mortgage, the story may have changed a bit. Refinancing actually means you would be taking out your second mortgage ever (as opposed to your first). Therefore, the same perks will no longer be available to you. However, that does not mean you will not be able to qualify for a very good rate if you play your cards right.3. The rate you qualify for depends in part upon your credit score:As you know, the rate you qualify for when refinancing your home mortgage loan depends greatly on your credit score. This is just a fact of home loans today.4. There are other factors that home refinance lenders take into account:However, other factors can also be taken into account by a prospective refinance lender. Each lender has a different set of criteria that they look at when deciding the rate of a new borrower.5. The key to getting the best rate is to compare similar offers from multiple home refinance lenders:The only way to know for sure if you can qualify for a better rate than you have now is to apply to multiple lenders. First, run your credit report and check for errors. Then, go ahead and apply for a mortgage refinance loan to at least 5 lenders in addition to your current mortgage lender.Try these 5 ideas for successfully refinancing your mortgage as a first-time home buyer.
It seems that the decision makers running the Fannie Mae and Freddie Mac government refinance programs did not learn anything from the current, and continuing, housing bust. If bad loans got us into the current mess, why do Fannie and Freddie think that more bad loans will get us out? In a recent press release it was announced that the two government-owned agencies will now refinance loans up to 125% of the current home’s value! Does this spell trouble for the FHA home loans? All facts from the mortgage industry and government point to the fact that mortgage default rates take a huge spike upwards with high loan to value loans.I would venture to say that many of the mortgage debtors (in trust deed states) may not realize that by refinancing through this program, they will be going from a non-recourse loan to recourse refinancing, in many cases.My bet is that actions like this will give a false sense of recovery for awhile, only to have us fall further in the future, much like the stimulus money is currently doing.In his statement FHFA Director Lockhart said, “The higher LTV refinancing will allow more homeowners to strengthen their finances.” Do you really believe this? If the government really wanted people to stay in their houses, they would allow them to go into foreclosure and help them find alternative housing. Moving them into a 125% LTV recourse loan is setting them up for disaster and setting taxpayers up to take on the resulting new losses.Perhaps the government is not being 100% honest in their touting this 125% refinancing program as a way to help people stay in their houses. In reality, it may actually be a way to help banks keep from writing down assets while they earn enough money to increase their capital base.Some folks like to say that where California goes, so goes the rest of the country. The “tax and spend” government in California did not yet come up with a comparable plan and have been beat to the punch by the Feds. California’s 26 billion (or more) deficit, the absence of a viable budget, and the need for issuing IOU’s rather than cash payments, is no excuse. Only a few months ago California tossed out $100 million towards a credit to new home buyers for 5% of the purchase price (up to $10,000). Now that the first pot of money is depleted, there are two new bills pending in Sacramento proposing to double or triple the original $100 million.
Home loan refinance simply involves taking out a new mortgage loan while paying down the existing loan. The refinanced mortgage should always be structured in such a way that the terms of the loan are advantageous relative to the terms of the existing mortgage.In the case of many homeowners today, there are a whole lot of good reasons to refinance a mortgage. If done correctly and under the right conditions, refinancing offers a host of potential benefits, including:* lowing your monthly mortgage payments* saving you money on the total cost of your loan* allowing you to out on some of your home equity for use in paying down other debt – or for paying billsIt is not always a good time to refinance your home loan, however. In most cases, you will want to be able to qualify for a better interest rate than you have on your current mortgage in order consider a refinance. In fact, your ability to get a more favorable mortgage rate should be the central factor in your decision to move forward with refinancing your home loan.Here are 3 steps to the best home refinance; a mortgage rate shopping guide:1. Understand where today’s mortgage rates are in their historical context:The rate for which you qualify today will depend upon two main factors: a. where average rates are today (relative to average rates of the recent past) for the type of loan you want, and, b. your current credit score.Start by having a look online at today’s rates. Get an understanding of where rates are relative to the rates of, say, 3-12 months ago. Also, have a look at where rates they are today relative to that of your existing mortgage loan.2. Do whatever you can to improve your credit score:Unless your FICO score is already at 760 or above (which is considered a premium credit score), you will likely benefit from working to improve your score. Start by running your credit report. Find out if there are any errors on your report. If you find any, get them corrected immediately.3. Submit refinance applications to your current lender and to 3 others:Finally, when you are ready to apply for a mortgage refinance loan, be sure to get a quote from your current mortgage lender. But, do not stop there: apply to at least 3 other lenders, as well. Only by applying to multiple lenders can you hope to find the one that will offer you the lowest rate.Consider these 3 tips as you find for yourself the best home refinance mortgage rates.
Home owners across the country refinance everyday to either get a lower rate or pull cash out for various reasons. Many use local banks, credit unions and mortgage brokers. However many people often choose to use large national banks for their loans because of great low rates they offer on their home refinance loan products.Negatives Of The Big BanksBut because large corporate banks are generally located in another city you will have to fax or mail your documents to them. This can add unwanted time to the process and can sometimes get frustrating. But by gathering the required documents ahead of time you can have the same fast and pleasant home loan experience you would get from a local bank.When you are applying for your home refinance loan your mortgage officer will in most cases give you a checklist of required documents to send them. If for some reason you are not provided with this list the following list should help you.Documents Needed For a Fast Home loanMost Recent Pay Stub- This will allow the bank to verify income and employment. Supply this information for both borrowers that intend to be on the mortgage.Home Owners Insurance Information- This will make it easier for the bank to change the mortgagee clause on your loan. The clause basically states who gets paid by the insurance company in the event of property loss.Last two years W-2- Again supply this for both borrowers as it will help determine income levels and debt to income ratios.Financial Account Statements-Supply copies of any recent bank statements, 401K or retirement accounts. This will show the lender your amount of reserves and help determine your eligibility for the loan you want.Landlord Contact Info- If you rent supply the name and number of your landlord. The lender may want to contact them to check n your rent payment history. This only required for purchase transactions.The above list covers the basic information needed to pre-approve most refinance home loans. Keep in mind that your loan officer may however ask you to send additional documents that have been requested by the loan underwriters.