Determining if Cash-out Refinancing is Right for You

With so many expenses these days it’s nice to know homeowners have choices when it comes to borrowing against the equity in their homes. While some will refinance and get cash out with cash-out refinancing, others will take out a home equity loan or line of credit (HELOC). But if you still haven’t refinanced because you don’t know which option is best for you, the following information can help when it comes to distinguishing the differences between these three financing options.
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Can I Refinance My Home if I Owe More than its Worth?

You heard it all over the news through the course of the mortgage meltdown, “Home Values Down 10%…20%”. “Homeowners owe more that their homes are now worth.”

While cities in the Midwest like St. Louis, Kansas City and Indianapolis didn’t get hit as hard as other larger cities, everyone knew someone who lost a home or is struggling to manage bills, in any city.

Enter then, a market that has once in a generation interest rates that should be helping everyone with a mortgage recover financially, but for those who are upside down on their mortgage, they have been left on the outside, looking in leaving them unable to refinance on the basis that they owe more than their home is worth; in other words, they are, “upside down” on their mortgage.Continue reading

5 Tips for a Faster Mortgage Refi

With rates that come around once in a generation, everyone is in a rush to try to refinance their mortgage. However, with government regulations burying home owners and mortgage originators with mountains of disclosures, the process can seem daunting. However, here are some tips for you to be ready to make your next refinance as painless as possible.

1.       Have All of Your Documentation Ready….Yes All That Documentation.

File your taxes, get your w2’s, checkstubs and have bank statements ready.  Also in some cases, bankruptcy papers, divorce decrees.Continue reading

The Costs of Refinancing

This is part three of our series on refinancing.

Part One: The Best Reasons to Refinance
Part Two: Is Refinancing Right for You?

With mortgage rates at historic lows, many homeowners are considering refinancing their mortgages, wondering what it will cost. While refinancing fees vary from lender to lender and state to state, it’s not unusual to pay 3% to 6% of your outstanding principal in refinancing fees plus any prepayment penalties or other costs for paying off any mortgages you have. Understanding these fees before you sign refinancing paperwork will make the process easier and go more smoothly and it’s not a bad idea to ask for your settlement cost papers a day in advance of your loan closing to review the documents and verify the terms. The following is a list of fees that will be disclosed on your loan paperwork.

Application Fee

This fee covers the cost of checking your credit report and processing your loan. Even if your loan is denied, you may still have to pay this fee.
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Is Refinancing Right for You?

This is part two of a three part series on refinancing.

Part One: The Best Reasons to Refinance

With interest rates at all-time lows, many homeowners are considering refinancing their homes. But before you begin the process, it’s important that you determine if refinancing your home is right for your particular financial situation. Here are some things to keep in mind.

Let’s start with examples of when refinancing is not the right thing to do. If you’ve had your mortgage for a long time, refinancing doesn’t always make sense because you’ve already built equity in your home and are close to paying off the loan principal. Continue reading

The Best Reasons to Refinance

This is part one of a three part series on refinancing. Parts two and three will be linked at the end of this article when they are published.

Interest rates have fallen again and many people are considering refinancing their homes. Before refinancing it’s important that you understand all that refinancing involves, especially since the process is similar to what you went through when you purchased your home. That’s because when you refinance you pay off your existing mortgage and start a new one. Here are some of the most common and best reasons for refinancing.

One of the best reasons to refinance your mortgage is an improved credit score. A better credit score means you may be able to get a lower rate. Your mortgage interest rate directly impacts your monthly payment. With a lower interest rate you can build equity in your home more quickly. For example, let’s say you’re interested in refinancing your existing mortgage which is a 30-year fixed-rate loan of $200,000 at 6.0% with a monthly payment of $1,199. Refinancing with a 30-year fixed rate loan of $200,000 at 5.5% would make your monthly payment $1,136, a savings of $756 over a year’s time and $7,560 over 10 years.
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