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I Didn’t get the Cash Out I Wanted on My Mortgage Refinance, What can I do?

I Didn’t get the Cash Out I Wanted on My Mortgage Refinance, What can I do?

I Didn’t get the Cash Out I Wanted on My Mortgage RefinanceSo those borrowers who would like to refinance and pull “Cash Out” of your home but were turned down or told the home didn’t appraise for enough, there are some options which you can do fairly quickly to change your outcome.

1. Increase your credit score.

Often, lenders have a limitation on how much cash they can lend, many times, it may be due to credit score. For example, you may be able to borrower up 70% of your home’s value at a 640 score on a conventional loan, but if you have above a 700+ score, you may be able to go up to 85%

2. Apply for a renovation loan.

Many borrowers just want the cash for home improvement, unaware that a renovation loan is what they need. In some cases a renovation loan appraisal can yield a much higher value because it can value the home, “subject to” the improvements being done which is rare. Due to the their technical nature, a renovation loan isn’t common. However, they can be well worth it, with the right circumstances.

3. Apply for a HELOC

A HELOC is a Home Equity Line Of Credit. This is technically a 2nd mortgage but has a lot more flexibility to pull cash out and repay. They also can go to a higher Loan-To-Value than most other products.

So, what do you do if this is you? Like anything when you are dealing with professional services…get a second opinion and ask them about any of the above options.

Typical Refinancing Mistakes You Should Avoid

Interest rates are still at historic lows and refinancing could save homeowners a bundle. Trouble is many homeowners aren’t refinancing because the process can be a bit tricky. Here are some refinancing mistakes to avoid.

Before starting the refinancing process it’s a good idea to know your credit score. Job loss and a tough economy have taken a beating on many homeowner’s credit scores. Seeking a way out of debt, many homeowners attempt to refinance only to receive refinancing offers that were actually worse than their existing mortgage and in extreme cases were rejected by lenders all together. To improve your credit score in the months before you refinance, don’t make big purchases like a car or a boat, pay down your credit cards and check your credit report for errors, like debts you’ve already paid off. Continue reading “Typical Refinancing Mistakes You Should Avoid”

Is Now a Good Time to Refinance my Home Loan?

Homeowners often ask if it is a good time to refinance their home loan. The answer is certainly yes.  In fact, interest rates are at their lowest levels since 1958 when Dwight D. Eisenhower was president.  Since interest rates are extremely low, this gives tremendous opportunity to credit worthy consumers to take advantage of a refinance home loan. Continue reading “Is Now a Good Time to Refinance my Home Loan?”

Preparing for Your Refinance

From radio ads to TV commercials, newscasters and co-workers, lots of people are talking about refinancing. Trouble is not everyone meets the basic requirements for a refinance, nor do they know how to prepare for one. But the good news is preparing for refinance isn’t difficult. More people could meet those basic requirements with a little research and preparation. It’s no different than earning a better score on the SAT or ACT exams for entrance into a better college. The only way to succeed on the test is to know some of the questions that will be asked. The same can be said when it comes to working with mortgage lenders. Knowing what to expect from lenders and familiarizing yourself with their requirements will better prepare you for a refinance and could result in a faster closing. Here are some things to keep in mind. Continue reading “Preparing for Your Refinance”

What President Obama’s Reelection Means for Homeowners

Though both presidential candidates were short on specifics about their housing policy, refinancing, new mortgage regulations and mortgage interest deduction all won on Election Day. Here’s what President Obama’s reelection means for homeowners.

While Mitt Romney talked about economic stimulus throughout much of the campaign, the Obama Administration made it easier for homeowners to refinance with historic low mortgage rates and plans to make refinancing available to even more borrowers in the next four years. Refinancing gives homeowners more spending money and is a form of economic stimulus. Housing policies that help for folks on the verge of losing their homes are still in the works.
New mortgage regulations are coming like the Consumer Financial Protection Bureau established by the Dodd-Frank Act. Set to take effect by January 2013, these new mortgage standards will trigger legal and financial implications for lenders should a mortgage be judged to be beyond a borrower’s ability to repay. Critics of the Dodd-Frank Act, like Mitt Romney, have argued that such a plan holds back mortgage lending. Legislators will need to strike a delicate balance between giving lenders the incentive to expand mortgage credit while also protecting consumers from high risk loans. Continue reading “What President Obama’s Reelection Means for Homeowners”

What Does it Mean When a Mortgage Company Advertises “No Appraisal Required”

In trying to makes sense of advertising of mortgage company ads, one will hear many things. Today we will discuss what it actually means when someone says they can refinance your home without an appraisal.

Is a No Appraisal Refinance Possible?

Yes, it absolutely is. Currently, approximately 10% of our mortgage refinance transactions are done without an appraisal. In addition to saving the $350-$500 cost of the appraisal, the transaction can move faster due to many appraisers being backlogged, Currently, the refinance transactions that are done without an appraisal comes down to either conventional HARP loan or an FHA streamlines. Continue reading “What Does it Mean When a Mortgage Company Advertises “No Appraisal Required””

The Cost of Not Refinancing Your Mortgage and Missing Out

Over the past 5 years, mortgage interest rates have gone in one direction, down, down, and down. Each time we appear to have hit a floor, the bottom drops out of it to another floor.

Over this time frame, some borrowers have taken an “I’ll get around to it” attitude. However, I thought it wise to break down what the actual savings on refinancing in today’s market will actually mean.

Example 1 – Paying off your Mortgage Faster

Borrower John in Chesterfield, MO has a $175,000 mortgage at 5.5%with 25 years left at a payment of $993.63 and has been putting off refinancing due to the trouble of rounding up all of the income documentation.
What is available is $175,000 mortgage at 15 years at 2.75% which carries a payment of $1,187.59.
Total payback on John’s loan (993.63x25x12) is $298,089 but by applying for a lower rate on a 15 year leaves him with a total payback of $213,766, saving John a whopping $84,322.

Ex. 2 Improving Cash Flow for Investments

Borrower Lisa from Overland Park, Kansas has a $200,000 Mortgage at 5.5% with 25 years left which carries payment of $1,135.58

What Lisa wants to do with her situation is refinance to a 30 at 3.500% and invest the excess cash flow. The payment on her $200,000 mortgage is $898.08, saving her $237.49. If Lisa invests the $237 savings every month over 30 years, assuming a 5% return in a tax deferred account, she will have $197,000 left over when she pays off her mortgage in 30 years.

So to conclude, if it’s to pay off your mortgage quicker, or to take advantage of investment opportunities, there are great financial opportunities in today’s refinance market.

Rebuilding Your Home’s Equity with Refinancing

The main reason homeowners today refinance is to get a lower interest rate. But what many homeowners don’t realize is that refinancing helps them to rebuild the equity in their homes more quickly. For those of us who bought homes prior to 2006, most of us have less home equity than we used to because our homes are worth considerably less than they were a few years ago. Therefore, we have less home equity. Fortunately, refinancing can help homeowners to rebuild the equity in their home.
Continue reading “Rebuilding Your Home’s Equity with Refinancing”

Refinancing Without HARP

If you’re one of the millions of homeowners with an underwater mortgage who would still like to refinance but can’t qualify for HARP (the federal Home Affordable Refinance Program), there are still some options. Though limited to borrowers in specific situations, you can still refinance a negative-equity mortgage even if you don’t qualify for HARP as long as your mortgage loan is backed by the FHA or VA.

Provided you’ve kept up with your mortgage payments, both FHA and VA mortgage loans offer what is known as “streamlined” refinancing that enables you to be approved for a refinance almost automatically. In fact, credit scores, appraisals, proof of employment aren’t necessary no matter how much the value of your home has fallen below what you owe on the loan. But it’s important to remember there are criteria that must be met.
Continue reading “Refinancing Without HARP”

Ben Bernanke Refinanced his Home, Maybe You Should Too

Yep, that’s right. Ben Bernanke, the Federal Reserve Chairman, refinanced his home. Your eyes do not deceive you. So, what about you? Don’t you think it’s time for you to refinance your home too? According to Bernanke’s financial disclosure form, he took out a 30-year mortgage with a fixed rate of 4.25% to replace one he took out in 2011 at 5.375%. Granted Bernanke has better credit than most Americans and has access to information the average consumer doesn’t, but besides that why are so many Americans waiting to refinance their homes when rates are at historic lows?

Because no two situations are alike. Refinancing isn’t an option for some homeowners because they have no equity in their homes, their homes aren’t worth as much as the balance on their mortgages or they have bad credit while homeowners who have a FICO score of 740 or above, at least 10% equity in their home and few debts are better equipped to refinance.
Continue reading “Ben Bernanke Refinanced his Home, Maybe You Should Too”

A Refinancing Expansion

Unless you’re living under a rock, you know it’s a presidential election year, with Election Day less than two months away. And while many are already sick and tired of the mud-slinging and negative ad campaigns, there’s one thing that homeowners should be paying close attention to – a refinancing expansion bill the White House is urging the U.S. Senate to vote on as early as this week.
Continue reading “A Refinancing Expansion”

Why Cash-in Refinances are in Vogue

For the past decade many homeowners have taken advantage of cash-out refinancing, taking out a new mortgage with a loan amount that’s bigger than the balance on the old mortgage with the homeowner receiving a check for the difference at closing. However, today mortgage lenders are seeing much more of what’s known as “cash-in” refinancing where the borrower refinances their home mortgage for a smaller amount than their old loan, with the homeowner taking a check to the closing.
Continue reading “Why Cash-in Refinances are in Vogue”

Why You Should Refinance

Most people who consider refinancing their home mortgages do it to get a lower mortgage rate. According to the Bureau of Economic Analysis the average interest on an outstanding mortgage at the beginning of 2010 was 5.979%. With mortgage rates at historic lows and well below 5.979%, refinancing is a no-brainer. But what many home owners don’t know are the other reasons why they should consider refinancing their home mortgages.
Continue reading “Why You Should Refinance”

Should You Cancel Credit Card Accounts When Refinancing?

It’s a temptation many of us have when we’re looking to borrow money. Should you cancel your credit card account as a way to increase your credit score? Would closing a credit card account impact your FICO score? While situations vary, the answers to these questions may surprise you. With banks and credit card companies charging more fees than ever before consumers have to be on top of their game. Reading the mail and the fine print on bank and credit card statements could be the difference between paying more in interest and securing an attractive mortgage rate when it comes to refinancing your home.
Continue reading “Should You Cancel Credit Card Accounts When Refinancing?”

Best Ways to Prepare for Refinancing Your Home Mortgage

Homeowners can realize significant savings each month when they refinance their mortgage loan to one with a lower interest rate. But how much a homeowner can save depends on the size of the mortgage loan and the amount of interest you can shave off. Before you refinance your home mortgage it’s important to remember refinancing isn’t always simple and it isn’t free. That’s why doing some research before you begin the process so you don’t wind up spending a lot of money to save a little.
Continue reading “Best Ways to Prepare for Refinancing Your Home Mortgage”

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.
Continue reading “Determining if Cash-out Refinancing is Right for You”

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 “Can I Refinance My Home if I Owe More than its Worth?”

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.
Continue reading “The Costs of Refinancing”

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 “Is Refinancing Right for You?”

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.
Continue reading “The Best Reasons to Refinance”