Mortgage Refinancing Tips

Well George and I have finally started to refinance our mortgage on our home in Decator since current mortgage rates are low right now. I locked in a 15 year mortgage rate of 3.25% which I found on Monitor Bank Rates, if you’re looking for mortgage rates to refinance you should see what rates they have in your state.  Since I’m at home with our youngest while George is working it’s my responsibility to look into refinancing.

I’ve dragged my feet on this but started to get real interested in the refinancing process and get the best refinance rates on a mortgage loan while refinance rates are low.. We we’re afraid mortgage rates would start going up again so I really been busy on this the past couple of weeks and I’m glad we locked in such a low rate.

While I was looking into refinancing I was at Dekalb Market speaking to another mother who was also refinancing her home with her husband and securing low mortgage interest rates on a refinance home loan. That is when I decided to help other Dekalb County mothers looking into refinancing by listed the useful information here.

Before plunging into the abyss of refinancing you need to understand all that refinancing involves, which is more than you think. Home prices in Decator andDekalbCountyhave gone done the past several years so if you want to refinance you might not be able to because the amount you own on your home but be greater than your home is worth.

There are many home owners in this situation. So the first step is to figure out if you can refinance which you usually won’t know until you start the refinance process and get an appraisal of your home.

There is a government program called Making Home Affordable which might help you refinance if you’re behind on your mortgage payments and the government holds your mortgage. The Obama Administration just announced an expansion of this program to home owners that are current on their mortgage. You can find out more at Making Home Affordable. 

If your home is worth a lot more than you owe you might be able to refinance for more and receive the difference in a cash payment, this is known as a cash-out refinancing and if you are considering a cash-out refinancing, think about other alternatives as well to raise cash. The reason being is you will pay more in mortgage interest payments and might pay a higher mortgage rate when doing cash out refinance

The lower the mortgage rate the you to build equity in your home more. There are also fees that you have to pay when doing a refinance, mortgage lenders are required by federal law to provide a “good faith estimate (GSE)” within three days of receiving your mortgage loan application which will list all these fees you have to pay.

The interest rate on your mortgage loan is tied directly to how much you pay on your mortgage each month, the lower the mortgage rates the lower your mortgage payments each month will be. Besides the mortgage rate the second biggest factor that comes into play with regards to the mortgage rate you receive will be your credit score. A higher credit score will score a lower mortgage rate.

The mortgage fees you pay everyone has to pay, you can shop around but your credit score won’t determine the amount you pay in mortgage fees. You may be able to save on fees for the title search, surveys, and inspection and so on, in fact I know a very good appraiser site for homes in Decaturthat will help you understand the appraisal process, visit http://web.co.dekalb.ga.us/PropertyAppraisal/index.html.  

You should ask for a copy of the HUD-1 settlement cost form one day before you are due to sign the final documents, the HUD-1 statement will list all the expenses and closing costs you are going to pay, in fact here are some typical fees and average cost ranges you are most likely to pay when refinancing point is equal to 1 percent of the amount of your mortgage loan.

Also consider talking with a trusted financial adviser before you refinance your home or do a cash-out refinancing as a debt-consolidation plan, there might be better options for you to repay your debt just remember, shopping, comparing, and negotiating can save a lot of money.  

Another option besides refinancing is getting a home equity loan or home equity line of credit just compare a home equity loan or home equity line of credit with a cash-out refinancing to see which is a better deal for you. Interest rates on all thre types of loans are low know but the best bet would be to do a refinance since those rates are the lowest. Just make sure you are planning to stay in your home at least 5 years to make refinancing worth your while.

Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms if housing prices fall, your home may not be worth as much as you owe on the mortgage and it will take time to build your equity back up or you have to wait until home prices go back up.

Which is more likely to happen if your current mortgage is only a few years old, so that paperwork relating to that loan is still current or do you expect today’s mortgage rates to go up because George and I do. It could be difficult for you to refinance 3 percent to 6 percent of your outstanding principal in refinancing fees which will increase the term of your mortgage so you may want a mortgage with a longer term to reduce the amount that you pay.

With bi-weekly mortgage payments you pay off your mortgage loan sooner, further reducing your total interest costs by paying a little extra on principal each month, you will pay off the loan sooner and reduce the term of your loan to less then the 15 or 30 years.

Mortgage calculators will show the amount you will save compared with the costs you will pay, so that you can determine whether the refinancing so the offer is right for you in this case, you may want to consider switching to a fixed-rate mortgage to give yourself some peace of mind.

You also might prefer a fixed-rate mortgage if you think mortgage  rates will be increasing in the future with again I do. So basically, there are two ways to avoid paying up-front fees and the most important thing to do is shop around and compare all the terms that different lenders offer that offer the lowest refinance mortgage and refinance costs.

If your credit score is lower now than when you got your current you might still get a higher mortgage rate and you might have to pay a higher monthly mortgage payment on a new loan so determining your eligibility for refinancing is similar to the approval process. Again that you went through with your first mortgage your lender know that you are shopping around for the best mortgage loan deal because lenders will look at the amount of the loan you request and the value of your home.

You may find yourself uncomfortable with the prospect that your mortgage payments could go up if you would like to switch into a different type of mortgage, like an adjustable mortgage so the first is an arrangement in which the lender covers the closing costs, but charges you a higher interest rate.

When you get your GSE (mentioned above) the estimate should give you a detailed approximation of all costs involved in settlement and if you plan to refinance, you may want to start with your current lender which might give you the best refinance rate and lowest closing costs in fact you can ask your lender for an estimate of the closing costs for the loan before you proceed.

You also may be able to get a lower refinancing rate because of changes in the market conditions or because your credit score has improved since you got your first mortgage, just the opposite if your score has gone down. Anyhow with an adjustable your payments could increase or decrease as rates go up and down.

Remember that your lender may not charge an application fee or origination fee along with the potential benefits to refinancing; there are also costs that you will be charged by your lender. When you refinance a mortgage you are paying off your current mortgage loan with a new mortgage loan at a lower interest rate.

Good luck with searching and comparing mortgage rates and remember to shop, compare and negotiate with all lenders!