Loans for Any Purpose!
-Get a Fixed Rate
-Get Cash from Your Home
a Good Idea?
Home Equity Loans
Gone are the days when borrowers that end up paying more than
adjustable rate mortgages can bail themselves out via a quick
sale of their property. They have to either pay up, or refinance
their loan into better terms and rates.
As a result of an increase in foreclosures and
delinquencies, as well as intensified analysis from Congress and
federal regulators, the mortgage loan providers have tightened
the criteria they use when determining whether or not to grant
loans. In addition, the price of homes have been increasing
modestly. As a result, appraisers have been tightening their
estimations on value.
Mortgage lender standards tightening
No matter what your intentions are, when
preparing to refinance you will have to document your income as
well as the appraisal value of your home. Approval may be harder to
achieve if the monthly payments consumer more than 27 percent of the
gross monthly income of the borrower, or if, totaled with payments
on other loans, the amount of debt being repaid consumes 35 percent
of more of the income.
If you are looking to
cash out of your home by refinancing, it is possible that the
lender may insist that your new loan account for less than 100% of
the current value of your home. This is the case even if you
purchased your home a few years with a zero-down payment loan.
Does your mortgage have prepayment penalties?
Before refinancing, it is important that you determine if your
current mortgage has prepayment penalties. Unfortunately, when you
commit to an adjustable rate mortgage, you are likely going to be
hit with a penalty equaling 6 - 12 months in interest payments if
you look to refinance within the first two or three years of the
It is probably not going to be easy to find whether or not your loan
has a prepayment penalty. The information you are looking for can be
hidden anywhere in your pile of loan documents. In addition to
phrases containing the term 'penalty', be on the look-out for
expressions like 'commitment period'.
Getting prepayment penalties waived
If you anticipate being hit with prepayment penalties when you
refinance, talk to your lender and request that they waive these
fees. Be prepared to be informed that you loan has been sold to
investors and that the only way a waiver can be granted is if the
investor OKs it.
Select your lender diligently
Before you refinance, you need to determine that the results
will offer a long-term respite, and not a temporary one. Just
because you had bad credit in the past, this does not mean you can
not qualify for a loan with favorable rates and terms. Instead of
applying for bad credit loan,
beforehand so that we can determine what type of loan you can
Evaluating all costs involved
Anyone seeking to refinance their home loan needs to evaluate all of
closing costs and fees involved with obtaining a new mortgage. It is
common for loans to be marketed as 'no cost' when in reality all of
transaction expenses have been rolled into the interest rate or
balance of the new loan. Typical refinancing costs include document
processing expenses, appraisal fees, as well as fees for a new title
search and title insurance. It is possible for you to get a less
expensive 're-issue' rate on your title insurance if you use the
same company that did the title for the original loan.
Before committing to a new loan,
compute refinance savings!