Tag Archive | “Refinancing Home”

Five Main Reasons To Refinance Your Home

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There is no harm if you go for a change or think of getting any change if you want. Change can be made anytime, depending on your mood and the amount of money you have. The same way getting a new home or refinancing your home is not a problem as you might want to change and may need a new place. You might feel like changing and enjoying a new view for yourself or your family.  For this purpose i have written few important or main reasons which are must for your refinancing of home.

These main reasons will definitely help you in refinancing your home.

Lowering The Rate:

This is the first and the most important reason that why you should refinance your home. This is because the rates or the interests you were paying int he past or have paid in the past can be low at the present moment in the market. This can be true. You can search around and can even find such markets or companies which offer you a low rate then the companies or banks which offer a high rate of interest. Make use of the mortgage calculator and see if you have any total cost remaining in your present mortgage. Moreover if you have a good credit background then going for another mortgage and refinancing your home is always a good option.


Building Equity More Quickly:

In few of the situations sometimes the monthly mortgage payment for refinancing your home might have some financial benefits included in it. Read the full story

Top Refinancing Killers: Steps to Avoid Them!

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Some great tips to avoid your refinance loan rejection.  Your refinance can be rejected due to anyone of the following reasons. Be cautious by following these great tips.  refinance tips

Credit Report Snafus:

Credit Score is a very important instrument which is analyzed by lenders before lending money to a borrower. So you must be very careful about your credit score and make sure you qualify the prevailing acceptable score.

Steps to follow:

  • Have an eye on your credit score several months before applying for loan.
  • Do not rely on only one credit rating agency; instead get your credit score from two or more agencies, to ensure accurate score.
  • Get the discrepancy resolved by your credit agency, incase you found any.
  • If your credit score is less than 700 points, fix it before applying for a loan.

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10 most common mistakes that people make when refinancing their home

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  1. Refinancing with your current lender without searching for available options.

    Trusting your lender blindly can cost you dear. One of the most crucial mistakes that many people make is that they trust their lender too much at times. Your lender may not always have the best rates and programs. Many believe that it would be easier to work with current lender, which may be totally incorrect. This is because they’ll require the same documents as other lenders and mortgage brokers.  No matter what you do, your lender would still have to process the document verifications all over again.

    refinance home

  2. Not doing a break-even analysis.

    Pre-determine the total costs involved and how much you’ll save every month by lowering your monthly mortgage payment.  Divide the total transaction costs by monthly savings to get the number of months you’ll have to stay in the property to recover your refinancing expenditure.
    For example, if the costs of refinancing total $3000, and you save $50 per month, you break-even in 3000/50 = 60 months.  In this case, you should only refinance if you plan to stay in the home for at least 60 months.

  3. Getting a written good-faith estimate of closing costs.

    Your mortgage company should provide you with a written good-faith estimate of closing costs, usually within 3 working days, after receipt of your completed loan application.

  4. Paying for a home appraisal when you think the appraised value may be too low.

    The evaluation company should carry out a Desktop/drive-by assessment and provide you with a choice of possible values. Your mortgage company can ask an evaluator to do this for you.
    Do not waste your time and money on a complete evaluation if you believe the home is unreasonably priced.

  5. Using the county tax assessor’s value as the market value of your home.

    Mortgage companies, like estate agents, usually use the sales comparison (market data comparison) approach instead of using the county tax assessor’s value to help determine if they’ll originate your loan.

  6. Signing documents without reading them.

    Always take your time in properly reading and assessing the outcome before signing any document. Carefully review all the documents, including copy of all loan documents.  This way, you can review them and get your questions answered in an appropriate manner.  Concentrate on reading only the important/related documents because you won’t have a lot of time to do so.

  7. Not providing your mortgage company with documents in a timely manner.

    You should always keep the additional paperwork prepared for submission (to the mortgage company). If the mortgage company asks you for additional paperwork, you should not waste a day. They’re trying to get you approved!  So, If you don’t quickly respond to your broker’s request, you could end up paying higher rates especially if your rate lock expire.

  8. Not getting a rate lock in writing.

    Always ask for a written statement detailing the interest rate, the length of the rate lock, and other particulars from your mortgage company.

  9. Drawing against your home equity credit line before you refinance your first mortgage.

    If you draw against your credit line for anything other than residence development, lenders will consider your first mortgage refinance transaction a “cash-out” refinance.  This can creates stricter lending requirements and can also affect your deal.

  10. Getting a second mortgage before you refinance your first mortgage.

    It is always advisable to check with your mortgage company if having a second loan will cause your refinance to be turned down. This is because many mortgage companies look at the combined loan amounts (i.e., the sum of the first and second loans), when you are refinancing only your first loan.

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