Hond Financial

Posts Tagged ‘refi’

There are several people who have a need to purchase a home, but are scared after hearing all the talk about how no one is offering loans and for those with a blemished credit history that naturally means there’s not any way of getting a mortgage.  Straight off there will always be a company around which will lend money and although large banks often restrict the amount lent out and to whom they lend money to, there are always alternatives available.  Second, those with bad credit won’t get the best IRs, but they can still get a mortgage and get a home. 

Variable rate mortgages should be steered clear of if at all possible.  It is one you may not be in a position to get yourself out of or afford. 

This is something a new homebuyer or 1st time home purchaser need to remember when the sole way out is foreclosure, you picked the incorrect kind of loan.  Do not let any one fool you, a non-variable rate mortgage is always better, even if it suggests that you have to pay a further one or two percent in your rate of interest.  If you end up in a position that taking out an adjustable rate mortgage is the sole option you have you need to try your best to make it a long term plan.  You then have got to act immediately to do whatever is in your power to enhance your financial history.  When you achieve that you can then refinance before your IR goes up.  In this fashion you’ll be ready to get the house you would like, exploit the low rates for a short while you enhance your credit, then you will be able to get a better loan.  Also, consider the closing costs.  If you are having a tricky heavy time coming up with the down-payment, not to mention the closing costs, you may need to request the seller’s help.  In countless cases, the seller will help by paying all of or part of the closing costs.  This can help you afford to get the home and it helps the sellers eventually shed the property.  Since often a property is being sold for reasons like needing money, settling a divorce or avoiding a foreclosure, you have good possibilities the seller will work with you.  Remember that it’s also possible you will have to get mortgage insurance. 

This is generally required when the money paid as a down payment is less than 20 p.c.  Of the mortgage amount.  This mortgage premium is added to your monthly mortgage payment and is so regularly cheap.  It is easy to see that there is a lot to consider when it comes to getting a home.  It is irrelevant if this is your first home or your tenth home, there are always questions you must ask and things to fret about. 

Just take some time and ask for recommendation when you would like it and you should be ready to go. 

In the event you have steered clear from what has been going on in the mortgage industry for the last year or two, I thought I would point out some changes and how they affect you.    These changes have slowed down the amount of refinances being done, but being aware these changes may make the process a little easier.

Here are 7 things you should know…

1)       A good credit score is now 740 and higher.   If you have a middle credit score between 740 and 620, you may still be able to refinance, although you may see a few adjustments to your rate for the lower score.  In general, anything below 620 is considered “higher risk” and will not be available for a refinance.

2)       The value of your house has likely dropped.   Nobody enjoys hearing this news, but it is a reality.The last two years, house values have dropped in most parts of the Country.   This simply comes down to supply and demand.   The number of homes on the market has increased due to foreclosures, short sales, unemployment, loss of value, and many other factors.   With so many houses available on the market in each neighborhood, a buyer now has more choices and leverage when purchasing.   This has a direct effect on the appraised value of your home, because appraisers use recently closed sales to determine the value of your home.    If the house across the street recently sold, and is roughly the same square footage, the same age, and has a lot of the same amenities; it is probably a great comparison for an appraiser to use.   This will give you a good indication of the value of your home.

3)       The refinance process takes much longer than before.Many homeowners became used to refinancing very quickly.   This is not the case any longer.   New legislation has been put in place to protect the homeowner, and these steps have delayed the refinance process.    If you are in the process of refinancing, expect the process to take 30 to 45 days with your lender or mortgage broker.    In addition to the new regulations put into place, many lenders have decreased employees, causing additional delays.   

4)       Taking cash out of your home is not as easy as it has been in the past.You will no longer be able to use your house like an ATM machine.A cash out refinance limits you to 85% of the value of the house.A cash out refinance will cost a little more to the borrower in terms of rate or fees.   Expect to pay about 1/8 of a percent higher for a cash-out refinance if your loan amount is 60% higher than the value of your house.   This is industry wide, not on a case by case basis.  

5)       Stated loans do not exist.Your qualification will be determined based upon your ability to prove your income over the last two years.    You cannot use bank statements, receipts from sold goods on EBay, or any other alternative method you may have used in the past.   Underwriters now verify everything and you must be able to prove it with traditional methods such as tax returns, recent paystubs, and verifying employment over the phone.    Regardless of how good your credit, you still need to prove your income.

6)       A new policy has been established for appraising your home.   The new Home Valuation Code of Conduct (HVCC) was implemented to prevent loan officers from pressuring appraisers for higher values.   Now, loan officers are not permitted to speak with an appraiser or order an appraisal directly.   Instead, the new HVCC requires that appraisals be ordered through an independent third party company, and eliminates any interaction between appraisers and loan officers.   The third party acts as the middle man, receives the order from the loan officer, and places an order with an appraiser.   There are many problems with the process in general, but most notable is that appraisals are being done on homes where the values needed to refinance are not realistic.Prior to the change, a loan officer would call an appraiser, place the order, and give an estimated value.  If that value was unrealistic, the appraiser would notify the loan officer and the appraisal would not be done, saving the borrower $300 to $500.   Now, the appraisal is being done regardless of value, the value is too low to refinance, and borrowers are out the cost of the appraisal.This is just one of the minor issues with HVCC….there are others.   Hopefully, some of the people behind this process try and refinance and see how much it is truly hurting the industry, and make the appropriate changes.  

7)       You can get turned down for a loan.    To some, this sounds crazy.People actually get turned down for loans now.The three C’s determine your eligibility for a loan..Collateral, apacity, and character,.    You need to have the credit score, job history, and mortgage and employment history.   In general, your character has to qualify you for the loan.    You must also have the capacity to afford the loan as well as the equity in the home.    The three C’s were thrown out by many companies in the past, but they are back and my guess is they will be here to stay for quite some time.

To find out about more changes in the mortgage industry and what you can do to qualify, visit http://www.timmarose.com

Home Refinance Loan

Selecting a mortgage may be the most important financial decision you will make. Most likely, you will be paying off this debt for years, and after all, a small difference in the mortgage rate can make a big difference in monthly payments. We hope the following will help you shop for a mortgage most effectively.

First of all, if you plan on shopping around for a mortgage it is highly recommended that you take the time to order your credit report from all three credit reporting agencies and check it for errors. If there are any innacuracies they can save you thousands if you get take care of them!

Make sure you track your interest rates. Find out what current mortgage rates are and whether they are going up or down. The mortgage interest rates move around a lot. One month they are up, the next, down. It is not usual to see them stay the same for a long period of time. There are many factors affecting rates and it is often difficult to accurately predict interest rates as the national economy itself, but an understanding of key economic indicators can provide clues to the future direction of interest rates.

Mortgage rates generally rise and fall along with yields on Treasury notes and bonds because those government securities reflect the overall direction of interest rates. By keeping an eye on Treasury market and mortgage market trends a borrower has a better chance of obtaining interest rate savings.

Thirdly, before you begin shopping for a mortgage, you should decide which mortgage program is the best for your situation. A mortgage is a major purchase, so it is important to know that you have the right program for you. Today’s market offers borrowers a tremendous choice of loan products and new opportunities that never existed before, so it pays to educate yourself on the different types of loan programs first.  Home refinance

Choosing the right type of mortgage requires you to review your financial objectives and ask a host of questions, such as:

* How long will you stay in your current home?
* What amount of monthly payment can you comfortably afford?
* How much money do you have for a down payment?
* Is paying the mortgage off early important?
* Do you intend to make extra principal payments?
* Is your income projected to remain stable or increase?

Your personal expectation for the future of interest rates, your tax bracket and adversity to risk are also important factors to consider when choosing a mortgage loan.

Once you have decided to go with a certain loan program, and find out current interest rates, you can begin shopping interest rates among lenders. To find the best possible deal, you should do some research and compare the mortgages offered by several lenders before you commit to borrow. It isn’t always easy to compare loans because your mortgage rate is only one part of your mortgage loan. You should also compare points and other fees. There are a number of different fees involved in getting a mortgage that can add thousands of dollars to the cost of your loan, and some lenders have different names for them. It can be a shell game when lenders and delete one fee and just add another. Comparing what different mortgage brokers and lenders are charging you to get an interest rate is often the most difficult part of mortgage shopping.

Don’t just look at the bottom line, look at the whole picture. Pay close attention to the terms of a loan including the type of the mortgage, the presence of prepayment penalties, low or high downpayment, mortgage insuranse requirements, payment schedule, lock-in period and many other features. Pick the loan with the rate and other terms that suit your situation best. For example, prepayment penalty clause can be very important if you are planning to sell your house or refinance in the next 3 – 5 years, or if you expect to prepay your loan.

Once you have decided to go with a certain lender (or broker), ask him to specify the documents you will be required to provide for the approval process. Find out also whether the loan application and the lock-in fees, if any, are refundable if your application is rejected.

With interest rates at near 30 year lows, it is important for you to understand the market and how it works and where it is going in the future.  If you are a homeowner and can qualify for a loan, chances are you can get a great deal of savings month to month by re-structuring you loan now.

There are four things that you need to consider when shopping for a loan.

1.  You get what you pay for:

It is in our human nature to shop around for the lowest rate quote out there and go with that without understanding some of the ramifications.  If you are just looking for the lowest quote on a loan, you will probably end up with the lowest amount of education, personal service, and advice on your loan.There is a much higher chance that your loan will not close at all.

2.  Make sure you are comparing apples to apples.

Lenders have control over the loan origination fee in a transaction, so make sure that if you want to compare costs from one lender to another, you are looking at this fee.  Make sure that they are not hiding part of their fee somewhere else in the estimate. Home refinance rates

3.  If it sounds too good.

Because all banks work off of the same rate everyday, you really need to worry if you get a quote rate that is much lower than the others.  This typically mean that they are giving you a low quote just to get you in the door, or you are paying more in closing costs to get the lower rate.

4. Interest Rates Move.

Rates move hourly, not just daily or weekly.  If you really want to compare two lenders accurately, you need to be talking to them on the same day at the same time.

Get more information about refi loans at www.MortgageVines.com

With millions of Americans facing financial hardship and difficulty making their mortgage payments, there comes a time when a homeowner has to decide whether they should continue to make their mortgage payments and burn up their reserves or stop making the payments and conserve their cash savings. The latter deteriorates your credit and will expose you to a possible foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go” or should I refi my home?

The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. The stumbling economy and a significant loss in home values, no wonder people are becoming trapped under mortgage payments they can’t pay and a home they can’t sell. There are a lot of people that are leaving their homes and just giving the properties to lenders. Is this the best option?

I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.That might be a Walton’s way of thought but sometimes the truth hurts.It was a shock to some to see national home value increase seven percent a year though the nineties.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Are you still breathing?  Do you have a credit score? Obviously you can afford a house.By then home prices were lower and stated incomes supported those prices; with that in mind it could have been okay for stated incomes.Now you have an Achilles heel with outrageous home value increases and people scrambling to spend that money of high priced toys. The blame lies with borrowers that used their homes equity like an ATM machine to buy the luxury item they desired.

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.  If I walk from my home I can buy another house in two years(in theory) based on current lending standards which if property values keep going down I can buy another house or maybe even buy back my existing house at half the price I used to owe on before I walked.  This is all true you can walk, you could buy your home for less, but do you really want to?Several media and news stories have put a spotlight on a home market on life support, but the truth of the matter is everyone agreed to the terms because they suited the borrower at the time.   Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.With the threat of a depression looming it is time we all take control of our homes and neighborhoods to ensure we avoid foreclosure.

The mortgage market has changed dramatically in the last 10 years. Local lenders are quickly becoming just another home mortgage option for homeowners. Obtaining a refinance is now done online by most homeowners. You will find yourself choosing between a local website and national websites with several options of each.

The large scale operations are the companies that we have all heard of. There ads are in magazines, on TV and just about everywhere else advertising is done. The giants of this industry will sell your information. A major problem. You may receive more calls than you wish to be dealing with and it can make the process complicated. The calls will eventually slow down once you start telling them that you are not interested. It can be difficult to compare apples to apples when you deal with many companies but with time and patience you can sort through the immense amount of information that you will be given.

The small local websites are another option for borrowers. You can quickly see that these are plain vanilla websites that were built with little cost. This is a great way for borrowers to find out if they can qualify for a loan and great for borrowers that are not internet savvy. There will be the possibility of meeting your broker in person and shaking their hand which many people still find very important. These local professionals will generally have a higher rate and fees than a large wholesale or direct lender would offer with online refinancing. The fixed costs are rather extensive and it is difficult for these operations to compete. This can be a great way to go if you want to avoid the hassle of dealing with several companies.

Websites have recently emerged from direct lenders in which case you will only be contacted by the lender directly. Helpful information can be obtained through these sites. You can often see an estimate of current rates (current rates are always an estimate, rates are different for every situation) and they will generally have their fees clearly posted on their website. The high costs of these websites and systems will be built into your fees. It is not cheap to build complex sites and pricing engines. That involves a lot of overhead which means that you may pay for that convenience with the interest rate and fees. There are very high advertising costs. How did you find the last mortgage website that you went to? That company spent money to have you visit their website.

There is a fourth type of site out there. More and more homeowners are using these sites. The new type of sites are basically a broker of information, they leverage your information and request for online refinancing in order to obtain the best deal for you. These websites will take care of the background work and find the best lender so that you don’t have to deal with it. When your information is delivered to a bank they have agreed to waive points and charges. You aren’t hassled by a bunch of lenders, you aren’t charged fees to refinance your home and you know that you are being contacted by one of the best possible lenders for your situation. This is growing in popularity for obvious reasons.