How to Refinance a Mortgage

Sub-prime lenders can help homeowners refinance their mortgages with poor credit or a recent bankruptcy. With interest rates at historically low levels you can still find very good interest rates with a poor credit rating. Sub-prime lenders are very competitive and your business is in high demand; in spite of your credit worthiness.

In recent years it was nearly impossible to refinance or obtain a mortgage loan with bad credit and not pay high fees and interest rates. Today’s market has many lenders and competition has led to more reasonable rates and fees. Traditional banks and credit unions are jumping on the sub-prime bandwagon, although their rules for lending tend to be more stringent.

To find the best sub-prime lender for your situation you need to do your homework and shop around. Sub-prime mortgage lenders are very easy to find on the Internet. If you don’t have time to do the legwork yourself consider using a mortgage broker. There are mortgage brokers that specialize in sub-prime lending and a good broker can find you an excellent deal.

If you are considering a sub-prime lender your credit probably isn’t the greatest; however, there are steps you can take to improve your application for the loan. The amount of cash you have on hand, how much you are willing to pre-pay as points, your salary, how long you have been in your job, along with the length of time since your bankruptcy, can improve your credit worthiness when applying for a loan. To learn more about saving money and shopping for a mortgage sign up for our free guide to mortgages and refinancing.

Mortgage interest rates dropped again this week on positive news regarding inflation and the housing market.

This interest rate for a 30 year fixed mortgage this week fell to 6.22% according to a survey of national mortgage lenders. This time last year a 30 year fixed rate mortgage averaged 5.81%.

Mortgage interest rates for 15 year fixed mortgages dropped to 5.76%. This is down from 5.79% the week before; this 15 year fixed mortgage was 5.23% this time last year.

Adjustable interest rate mortgages (ARM) with a five year term are running 5.79% this week; this is down from 5.82% last week. As for one year ARMs they are currently at 5.15%; last week one year ARMs were 5.22%. This time last year a one year adjustable interest rate mortgage was 4.19%.

According to one national lender the drop in interest rates is attributed to reduced inflationary pressure coupled with a slowdown in the housing market attributed to holidays.

If you are in the market to lower your monthly mortgage payment there are many types of loans to pick from. As a homeowner you need to educate yourself about mortgages or you could lose a lot of money.

For starters, beware the so called “option” mortgages. These are loans that give you the “option” of paying less interest than is due each month. This will lower your monthly payment; however, the interest you don’t pay is tacked on to the principal loan amount. This creates a phenomenon called “negative amortization.” Instead of paying down the balance on your home it keeps growing over time. Defeats the purpose of owning your home, doesn’t it?

The other shortcut to lower payments many homeowners take is the adjustable interest rate. Adjustable rate mortgages aren’t a bad thing; when interest rates are low they are a savvy way to purchase a home. The problem comes when you don’t stay on top of the market and interest rates rise the way they have for the past six months. This causes your monthly payments to rise unexpectedly and can cause serious cash flow problems for your family.

Another pitfall you could encounter with your mortgage is the fee and penalty charged to refinance the loan. Many mortgages come with prepayment penalties if the loan is refinanced during the first three years. If you choose a risky option or interest only mortgage and interest rates spike driving your payments up, it could be expensive or even impossible to refinance when you need to. The worse case scenario here is you could be unable to refinance, unable to keep your payments up, and end up losing your home.

Homeowners across the country have been taking advantage of historically low interest rates to refinance their home mortgage loans. If your New Year’s resolution this year is to get your finances under control and refinance that albatross of a mortgage we can help.

The housing market in the United States is booming. Lower interest rates mean lower monthly payments and the opportunity to borrow against your home equity to make repairs or improvements to your home.

For many homeowners, when refinancing a mortgage, it is best to finance more than the balance needed to pay off the previous mortgage. This allows you to tap the equity in your home without needing a second mortgage or a home equity line of credit. The advantage in refinancing this way is that you will only have to make one monthly payment instead of two or sometimes three. You can use the excess funds for any purpose: pay off bills, make repairs, buy a car, even to take a vacation.

How do you save money when refinancing your mortgage? You do this by educating yourself about mortgages and the mortgage industry. Our free guide is an excellent resource as it has the information you need in one easy to follow guidebook. Refinancing your mortgage is not a decision to be taken lightly and it pays to do your homework first. If you follow interest rates and today’s rates are lower than what you are paying now it would be a smart move to consider refinancing.

Many homeowners refinance their mortgages to save money; however, there are other reasons. By acquiring a lower interest rate you could lower your monthly mortgage payments. You also pay the lender less over the life of the loan. Another reason to refinance is to consolidate your debts into one payment. This can save you time, frustration, and money by paying one loan at a low interest rate.

To learn more sign up for our free guide to mortgages and mortgage refinancing: “Five Things You Need to Know Before Refinancing Your Mortgage.”

For the second consecutive week mortgage interest rates are on the decline. According to a survey of one national mortgage lender interest rates for fixed-rate 30 year mortgage loans fell this week to 6.26%. This mortgage rate is down from 6.30% the previous week.

Mortgage interest rates for fixed 30 year loans were at a 24 month high just before Thanksgiving; however, rates are declining slightly throughout the holidays. This declining trend in interest rates provides some optimism for mortgage interest rates in 2006.

Interest rates for 15 year fixed mortgage loans dropped to 5.79% this week. Fixed rate 15 year loans were 5.85% last week. Hybrid adjustable rate mortgage loans (ARM) bucked the trend this week and are up to 5.82%. One year hybrid ARMs were 5.77% last week.