There are many reasons that are put forward as being a viable cause for obtaining home mortgage refinancing, but these may or may not be valid reasons if you look at the total cost of the loan. In most instances, the home mortgage is the single largest financial transaction made by an individual during their lifetime. It is appropriate to do some soul searching about your reasons for obtaining a refinance on your mortgage. If your financial situation provides compelling reasons for changing your mortgage structure and/or amount, then get the best possible deal to fit your situation. Here are some typical factors that might caused you to need a mortgage refinance.
Pay Bills
Home mortgage refinancing is sometimes obtained in order that the homeowner can pay some significant or pressing bills without going the route of personal loans, credit card cash advances or other financial avenues. If you are in a situation where there are large medical bills, for example that must be met, a cash out refinancing will often provide ready cash to cover the bills at a relatively low interest rate. Because the loan is your home, interest rates will have positive tax implications. This is not true of most other types of loans.
Finance education
Another common reason for obtaining cash out at home mortgage refinancing time is to provide funds to pay for the college education of a family member or yourself. A loan tied to the equity of your home tends to have a somewhat lower cost than other loans, although federal education loans have very reasonable loan rates nowadays. The difficulty may be qualifying for the education loan. If you, like many people recognize the importance of higher education, the cost of the loan may be well worth a refinance on your home mortgage.
Repair or remodeling
Obtaining home mortgage refinancing for the purpose of repair, renovation or remodeling of your home is an excellent way to make use of the extra funds you can receive at closing. Often completing large renovation or remodeling projects will significantly increase the market value of the home which can add to the future equity. Sensible, somewhat conservative remodeling projects can be completed with an eye to making the home more marketable in the future. If you plan to remodel based solely on your own needs and likes, you may not necessarily gain equity value for the home.
Reduce cost of the loan
Another great reason for obtaining home mortgage refinancing is to reduce the cost of the original loan. If the original mortgage was taken out at a time when interest rates were high, a refinance may allow for lower interest rates. This is partially offset at times when there are points or closing costs that enter into the calculations. The overall cost of the loan can be reduced also if the size of the monthly payments is increased and the increase is applied to reduction of the principal. Yet another way to reduce the cost of the loan is to shorten the term of the loan. Instead of paying another 20 years on the original mortgage, consider refinancing with a ten year term.
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Help answer the question about home mortgage
How hard is it to get a home mortgage while on contract?I'm hoping to buy a home in the near future. I have a very good job, but I am currently on contract. I have been here for close to a year and have another year still remaining on my contract, at which time I will hopefully be made perminant. I have $25,000 to put down towards a home and have a good credit score. What are my odds of getting a mortgage? How reluctant are companies to give loans to people who work on a contract?
I'm not working for a temp agency, I'm working on a contract at a University. I'm full time and salary, but after 1 year they do not have to keep me on full time if they choose.
If you take your 45K out of your savings account and pay off the second mortgage will you have enough equity to refinance the 170K mortgage?
If I had money in the bank enough to cover things and avoid the foreclosure, I would use that money to avoid foreclosure.
That is a very good question i must say…
I am a mortgage broker myself, and i find this a common problem.. I work with a nationwide lender so i sit at my office in Chicago, and close loans for people in Florida, California, etc.
Now, this is a big issue in the time we are in because all financial institutions are moving towards a direct approach, so that they to can cover all of the US…
As the last response said, you can only trust family and friends… Honestly there is truth in that.. You can only REALLY TRUST them because you know them, their family, their friends, etc..
But…..What if you dont have any friends and family in the mortgage industry? What do you do then?
Do you ask a friend if they know someone?????
Here's probably the biggest issues now a days… THe thing to remember is that all lenders have different guidelines in which they lend money.. WHat a friend of yours qualified for, and they type of Mortgage loan they received may NOT BE THE RIGHT LOAN FOR YOU!!!
if they have different employment and income, credit, cash flow, home value, etc. then there are a lot of variables…
One of the most common things i hear is …."well my friend told me i should get …" Or " Ive heard that you should NEVER get a …." These are very common and usually pertain to different types of mortgages like Adjustable rates or interest only loans…
For someone that will be in theire house for 15 years, they dont want an ARM or interest only…
But someone that plans to move in less then 7 NEEDS an ARM…or an interest only may be a smart option…
The thing is that you cant always TRUST your friends advidce either because you may be in completely different financial situations…
HERES WHAT YOU CAN DO IN REGARDS TO TRUST….
LOOK UP THE POTENTIAL BROKET ON THE BETTER BUSINESS BUREAU…SEE IF THEY HAVE ANY UN RESOLVES COMPLAINTS OR ISSUES..
ALSO, MAKE SURE THE INDIVIDUAL LOAN OFFICER IS LICENSED!!!!!!!!!
THIS IS A MAJOR ISSUE BECAUSE COMPANIES SIGN OFF LOANS FOR UN LICENSED LOAN OFFICERS…
let me just tell you from experience though…there are alot of ethical, moral, and trustworthy bankers and brokes out there that take pride in doing their job.. Myself, i feel grateful tpo help someone buy their first,2nd, or 3rd home… It feels good to help someone get out of a financial bind, and refinance their house to pay bills, pay childrens student loans, cash out to fix household problems that are in need of repair, etc…
Just make sure that when you talk to the person on the phone, you feel comfortable talking to them… You can usually sense how trustworthy someone is just by how they talk to you…
If you want more advice, or even mortgage assistance form someone who does take pride in this profession, feel free to call me…
My name is Jason Fry, i work for Providential Bnacorp, a nationwide mortgage lender.. You can call me direct at 312-264-6448, or email me at jasonf@providential.com
Ive included links so you can research myself, and my company if you choose…
Thanks again,
Jason Fry
Licensed Mortgage Specialist
Providential Bancorp
312-264-6448
Wow Lending Tree is a great big ripoff. Take the money you would have paid the closing costs with and apply it to the second mortgage. If you refinance, it will take over two years before you get back to where you are now.
You have to wait until you're on title, which usually takes a month, but, yeah, you can refinance any time you want to as long as you don't have the prepayment penalty.
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What is the Key disfavors by Having Your Mortgage
realmortgagepaid.blogspot. com
PMI is required if you borrow more than 80 % of homes value- no matter what the term or payment amount is.
2nd appraisal or appraisal review is required if the underwriter feels there is something wrong with the first appraisal- about one out of 100 appraisals require this. Usually this is if the appraised value has gone up significantly since the last loan- or if comparables in the area are way lower than the value he put on yours. The 2nd appraiser is basically just doing what's called a drive by appraisal & does not need permission from you. However, your lender should have called you to tell you this before ordering it. It's up to you whether you pay or not but if you don't your loan won't be approved. Good luck!
Hey Bank of America! You didn’t do squat for me and my husband. You promised the world but delivered nothing. So why don’t you get off this website and go do somethingproductive??? Like….get an education!
Ampedee, I’m a mortgage broker and banker. I used to work for one of the largest banks in the country and to be honest our fees and costs were so much higher than brokers. Large banks spend money on advertising and pay salaries.
Let the court figure it out NOT the soon to be EX
They will do the math for you and of course you will have to get a new mortgage in your name alone IF your unable to do that then the house will have to be sold to split the assets!
Divorce sucks!
hoyl hell this guy is a good sales man, but being in the mortgage industry my sell i see right through alot of his bulshit. GETTING YOUR LOAN THROUGH A BROKER MEANS UR GOING TO PAY MORE IN FEES, BECAUSE THAT LOANS GOING TO JUST END UP AT ONE OF THE BIGGER BANKS IN THE LONG RUN ANWAYS…..
mortgageartist. com
The best thing you can do is arm yourself with knowledge, even better if it’s free. a little time and a few clicks now could save you years and thousands of dollars later.
the choices you make today define your tommorow.
for the first 10 years of your morgage 30 year. You are paying mostly interest. If you want to sell houses so fast i wouls suggest you get a 15 year loan or 10 yera loan on a house. Most of those morgage payment s went to interest. I am sorry.
very professional response b of a.
The Real Estate Call Center 210-286-9289
You can try to fight what the tax assessor lists your property at, but, this is a long and usually losing process. There has to be a lot of other homeowners who are in the same boat who want their property reassessed. As for the insurance, call your agent and ask why it went up and by how much. You are always free to find a new homeowners policy.
Refinancing would only help if you have equity in your property and the interest rate you would get would be at least 1% lower than what you are paying now.
The problem you are going to have is the tax assessment on your property.
Hello,
I'm trying to understand one particular comment…
"Refinancing into one fixed mortgage at that amount would save us a significant amount of money each month. "
Are you implying that you have 2 mortgages? Maybe you did an 80/10 type of loan where 80% is your first, 10% is on a higher rate second? and the balance of 10% was your down payment?? Many loans are structured this way to avoid PMI. It works, but you're stuck with a higher interest rate on the 2nd (usually in the 8-9% range).
it is likely that at 6.6%, they are figuring PMI into the interest rate if they end up refinancing at less than 80% loan to value.