Refinancing your mortgage is not an easy task. The reason is that someone who needs to refinance has to achieve at least one of several results: reducing the monthly payments, reducing the amount of money spent on interests or reducing the length of the repayment program in order to be debt free sooner. However, to be successful one should obtain a combination of these results that matches the needs and desire of the borrower. Working on your refinance online can help you obtain this outcome.
Compare and Contrast
Someone refinancing is mainly seeking the lowest interest rate possible and though it used to be rather difficult to compare rates in the past, nowadays a quick search on the internet will provide you with thousands of results and many sites where you can get mortgage loan quotes to compare rates. The process is simple: you can either use the services of those sites that provide online comparisons or you can do some research on your own by contacting lenders and requesting mortgage loan quotes. In any case, you need to take some precautions before providing information to lenders or brokers.
It is important that you do a background check on the sites where you will be providing your personal information to avoid identity theft or frauds. Also, you need to make sure that they have a wide range of lenders for comparison because otherwise they may not be providing real comparisons but partial ones to lead you to apply with a particular lender. And most importantly, you must check whether they would pull your credit report or not when you provide them with your personal information. Remember that too many credit checks on a short time period will lower your credit thus affecting the results of your research as the next lender will notice a lower credit score each time your credit report is pulled.
What To Seek On Mortgage Refinance?
Traditionally one would seek only a lower interest rate on a mortgage refinance loan but things are not as simple as they used to be. There are many other variables involved like PMI, closing costs, prepayment penalty fees, etc. that need also to be taken into consideration if you want to achieve the best results on your mortgage refinance loan. Moreover, the results you want to obtain may conspire against seeking a lower interest rate. For instance, if you have a variable rate mortgage loan, it may not be such a bad idea to renounce to obtain a lower rate and even accept a higher one on condition of closing on a fixed rate loan which will guarantee that your mortgage monthly payments will remain the same over the whole life of the loan.
Remember that the results you need to achieve are your goals and mark the way towards the refinancing transaction. Seek a loan and lender that can adjust to those needs and rest only when you have obtained a mortgage refinance deal that has been customized to meet those results. If you need lower payments, seek a lower rate and / or a longer repayment program. If you need extra cash, seek a cash-out refinance home loan but make sure that the lender will not charge you PMI fees. Summing up, do a thorough and conscious examination of the loan terms prior to signing anything and do not be afraid of requesting more information or modifications on the loan contract if you believe it can be done.
ABOUT THE AUTHOR
Lara Sawyer is the author of this article. She works successfully as a financial advisor with years of expertise on Bad Credit Loans Guaranteed Approval. She publishes informative articles about Loans for People with No Credit, home loans, credit cards, auto loans, business loans and others at http://www.fastguaranteedloans.com
Saturday, October 13, 2018
Saturday, September 29, 2018
Home Affordable Refinance Program
HARP 2.0 is the latest version of the home affordable refinance program. This program was created primarily to assist homeowners to refinance and take advantage of lower interest rates. It is most often for those who lost equity in their homes, but continued to make all their mortgage payments on time.
To qualify for a HARP loan you must have no more than 1 30 day late payment in the last 12 months and the late payment cannot have been within the last 6 months. Also, you can only do one HARP refinance, so if you have already refinanced through the program before, you cannot do it again.The home affordable refinance program continues to change and hopefully when the next revision comes out (HARP 3) there will be opportunities to refinance for even more homeowners.
As of today's date, which is 6/7/2014, there are lenders who will lend up to 175% of your market value on a first mortgage. Any 2nd mortgage financing must be resubordinated, and with HARP 2 there is no upper limit on the combined loan to value. (CLTV-your combined loans to value) The second mortgage holder must agree to the refinancing and usually this is not a problem since by lowering your rate and monthly payment on your first mortgage, you are making their loan more secure. For a secondary home, it is possible to do a HARP loan however the loan to value is restricted to 125% LTV, and it is restricted to 105% on an investment property.
There are two programs for HARP, and both of them require that your loan is backed by either Fannie Mae or Freddie Mac prior to 6/1/2009. While your loan payments are usually sent to a loan servicer, it is still possible that your loan is backed by one of the two agencies. The way to find out is to search both agency databases. The majority of loans originated prior to 6-1-09 wound up at Fannie Mae, so it's usually best to check this database first. Both agencies have lookup tools where you can input your property address information and find out if a match is found. These two lookup tools may be found on the Pacific West Capital website on the HARP loans page.
The Fannie Mae program has more lenient guidelines as far as the LTV is concerned. The Freddie Mac Open Access program is usually capped at a maximum of 125% LTV with no upper limit for seconday financing. The interest rates on both programs are comparable to a regular refinance program with a conventional lender. In case you do have secondary financing on your home, under current HARP guidelines, it is not possible to combine your 2 loans together. This may change one day but for now this is how it works. Your existing 2nd mortgage must be resubordinated to the new first mortgage.
Another advantage is the flexibility with mortgage insurance. If you qualify for a HARP loan and your current loan does not have mortgage insurance on it, (MI) you will not be required to have any MI on the new loan regardless of your LTV. Typically any loan over 80% of market value will require MI. If you put down 20% or more when you bought your home, and your home value decreased putting your LTV above 80%, you will not be required to have MI on the new loan since your current loan does not have MI on it.
ABOUT THE AUTHOR
Scot King is a licensed mortgage broker in California. His company, Pacific West Capital has been helping homeowners to refinance and homebuyers to purchase housing since 2002. He has been in the mortgage industry since 1998 and his company is an Accredited BBB business with an A+ rating. For more information visit the HARP loans page at Home Affordable Refinance page: http://www.mortgage-pros.com/home_affordable_refinance.aspx . There are links to both agency lookup tools available on the PWC website.
To qualify for a HARP loan you must have no more than 1 30 day late payment in the last 12 months and the late payment cannot have been within the last 6 months. Also, you can only do one HARP refinance, so if you have already refinanced through the program before, you cannot do it again.The home affordable refinance program continues to change and hopefully when the next revision comes out (HARP 3) there will be opportunities to refinance for even more homeowners.
As of today's date, which is 6/7/2014, there are lenders who will lend up to 175% of your market value on a first mortgage. Any 2nd mortgage financing must be resubordinated, and with HARP 2 there is no upper limit on the combined loan to value. (CLTV-your combined loans to value) The second mortgage holder must agree to the refinancing and usually this is not a problem since by lowering your rate and monthly payment on your first mortgage, you are making their loan more secure. For a secondary home, it is possible to do a HARP loan however the loan to value is restricted to 125% LTV, and it is restricted to 105% on an investment property.
There are two programs for HARP, and both of them require that your loan is backed by either Fannie Mae or Freddie Mac prior to 6/1/2009. While your loan payments are usually sent to a loan servicer, it is still possible that your loan is backed by one of the two agencies. The way to find out is to search both agency databases. The majority of loans originated prior to 6-1-09 wound up at Fannie Mae, so it's usually best to check this database first. Both agencies have lookup tools where you can input your property address information and find out if a match is found. These two lookup tools may be found on the Pacific West Capital website on the HARP loans page.
The Fannie Mae program has more lenient guidelines as far as the LTV is concerned. The Freddie Mac Open Access program is usually capped at a maximum of 125% LTV with no upper limit for seconday financing. The interest rates on both programs are comparable to a regular refinance program with a conventional lender. In case you do have secondary financing on your home, under current HARP guidelines, it is not possible to combine your 2 loans together. This may change one day but for now this is how it works. Your existing 2nd mortgage must be resubordinated to the new first mortgage.
Another advantage is the flexibility with mortgage insurance. If you qualify for a HARP loan and your current loan does not have mortgage insurance on it, (MI) you will not be required to have any MI on the new loan regardless of your LTV. Typically any loan over 80% of market value will require MI. If you put down 20% or more when you bought your home, and your home value decreased putting your LTV above 80%, you will not be required to have MI on the new loan since your current loan does not have MI on it.
ABOUT THE AUTHOR
Scot King is a licensed mortgage broker in California. His company, Pacific West Capital has been helping homeowners to refinance and homebuyers to purchase housing since 2002. He has been in the mortgage industry since 1998 and his company is an Accredited BBB business with an A+ rating. For more information visit the HARP loans page at Home Affordable Refinance page: http://www.mortgage-pros.com/home_affordable_refinance.aspx . There are links to both agency lookup tools available on the PWC website.
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