Refinance Home Mortgage Guide

Mortgage refinancing is the process of paying off your current home loan with the proceeds of a new mortgage while using your property as loan collateral. There are a number of advantages to refinancing and when done properly can keep you squarely on the road to financial success. Here are several tips to help you decide if mortgage refinancing is right for you.

Is Mortgage Refinancing Right For You?

In order to decide if refinancing is the right move for your situation it is important to understand how the process works. If you are considering refinancing your mortgage as part of a strategy to get out debt you can easily consolidate higher interest debt and gain a tax deduction when refinancing your home. One of the most important considerations when refinancing your home is to secure the lowest possible mortgage rate. The problem with the rate quotes you find on the Internet and from your local mortgage broke is that the person providing you the quote has marked up the rate for a commission. Unless you can recognize and avoid this markup you’ll never get the lowest possible mortgage rate for your home.

Consolidate High Interest Debt

If you are considering consolidating your high interest debt when refinancing you will be borrowing against the existing equity in your home to pay off credit cards and other installment loans. This means you will be borrowing more than you owe on your existing mortgage which could result in qualifying for a slightly higher mortgage rate. A higher mortgage rate results in a higher monthly payment; however, the tradeoff is that you will be paying less to creditors and gain a tax deduction for all of the interest you pay on the consolidated debt.

Another advantage of refinancing your mortgage could be switching to a fixed or variable mortgage rate. Variable or Adjustable Rate Mortgages (ARM) typically have lower rates than their fixed rate counterparts. If you are in need of a lower payment and are not consolidating debt choosing an Adjustable or Hybrid Rate Mortgage could lower your payment if you are currently paying on a fixed rate mortgage loan. Another common reason for refinancing is to avoid a costly balloon payment if you don’t have the cash on hand to pay it off.

There are a number of options available to you when refinancing your mortgage. Direct lenders are available through banks, credit unions, and other finance companies that fund their own loans. This is not necessarily the best option as any entity that funds its own loans is exempt from the Real Estate Settlement Procedures Act and does not have to disclose their profit margins or markup of your loan. Take out a mortgage from your bank and you’ll never know how much you could have saved refinancing your home.

Mortgage Brokers Access Wholesale Rates

A better option is to refinance with a mortgage broker. These individuals have access to wholesale rates and can offer you a much more competitive deal than your bank. The problem is that many brokers pad their commission by marking up your rate, often without telling you. Once you learn to recognize and avoid this unnecessary markup of your mortgage rate you’ll have access to wholesale rates and can literally save thousands of dollars every year.

You can learn more about your mortgage refinancing options, including strategies for avoiding junk fees and the markup of your mortgage rate with the free videos found on this site; register today using the links found at the top of this page and you’ll be on the path to saving thousands of dollars in unnecessary mortgage interest and fees.

If you’re considering refinancing your mortgage and have less than perfect credit, there are steps you need to take before applying to improve your credit. Mortgage approvals are becoming more difficult these days even for homeowners with good credit. If you are going to have your application for refinancing approved you will need to improve your finances not only to get approval, but to qualify for the lowest possible mortgage rate. Here are several tips to help you refinance with bad credit.

Check Your Credit History First

The first thing you’ll need to do before contacting a mortgage broker is to request copies of your three credit reports and carefully check for errors. Your credit records are maintained by three separate companies that do not always share information. These three credit agencies are Equifax, Experian, and Trans Union. You don’t have to pay for these reports as Congress passed a law requiring each of them to provide you with one free copy of your credit history every 12 months. You can request these free credit reports by visiting the website annualcreditreport.com.

Dispute Inaccurate Information

If you find mistakes in your credit history you’ll need to dispute the error and allow enough time for the correction to be reflected in your credit score. It is not uncommon to have mistakes with one credit agency that are not reflected in the other credit agencies. Mistakes are common so it is very important to review your credit reports every year and follow that credit agency’s procedure for disputing inaccurate information as quickly as possible.

Pay Your Bills on Time

Late payments kill your credit score. Always make your payments on time, especially your mortgage payment. When paying your credit cards make sure you pay at least 20% more than the minimum payment that is due in a given month. Pay your credit cards down to at least 50% of the available balance. You can shuffle balances around between cards that have balances less than 50% if you don’t have the cash on hand to pay your cards down.

Work With a Mortgage Broker

Mortgage brokers have access to programs that you might not be able to find on your own. A good mortgage broker can help you not only improve your credit but can often work around your financial shortcomings to get your loan approved. You have to be careful when choosing the right person as brokers work for a commission and the loans that bring them the largest commissions are not necessarily the best loan for your situation. You can learn more about finding the right person to originate your mortgage without paying too much by registering for my free mortgage video tutorial.

Refinancing your mortgage loan with the wrong broker will cost you thousands of dollars and in today’s economy could even result in the loss of your home.

Remember that mortgage brokers are salespeople and come in multiple shapes in sizes with their own personalities. How can you tell if your mortgage broker is a dud? Here are several tips to help you find the right person to refinance your home mortgage.

Beware Endless Chatter

Like any other salesperson the mortgage broker that talks but never listens to you is the wrong person for the job. Dishonest mortgage brokers use never ending banter to distract you from something they may be hiding in your loan contract. Trust your instincts…if your mortgage broker comes across as a sleazy sales type that talks your ear of endlessly without letting you get a word in you should probably find another broker.

Sloppy With Paperwork & Deadlines

Being punctual is essential when it comes to your mortgage loan. If your mortgage broker is sloppy with paperwork it could cost you money. If your mortgage broker tells they will call you at a certain time and does not keep their appointments consider this a bad sign and move on to another mortgage broker.

Inexperience Costs You

When shopping for a mortgage broker it’s always a good idea only to work with those who have ten years of experience or more. If your broker has to consult the underwriter or someone else in the office before responding to your questions consider it a lack of experience and move on. Don’t worry about hurting anyone’s feelings…you’re not looking to make friends, you want a better mortgage right?

Good Mortgage Brokers Aren’t Hard to Find

The ideal mortgage broker is one that has a minimum of ten years experience, is self employed, and does not employ a sales staff. Finding a mortgage broker that fits this profile working from home is even better. Why? Mortgage brokers with fancy offices and sales staffs have to pay for their plush offices and the salaries of their sales staff.

This means they are going to be much less likely to negotiate fees and things like Yield Spread Premium on your loan. Remember, you’re paying for that fancy office and the hummer parked outside. You can learn more about refinancing your mortgage without paying too much today by registering for our free video tutorial.

Home equity loans are becoming a popular means of borrowing against the value of your home. There are actually two types of equity loans available called the “open end” and the “closed end” loans. An equity loan is one in which you take the equity in your home and use it for collateral so you can receive a loan.

Before you can qualify for a home equity loan you will most likely be required to have very good or excellent credit. If you meet these qualifications, this is how a home equity loan works.

When you apply for the loan there is a process that you must follow. You will start by filling out an application form. The loan representative will ask you to verify the information on your application and they will ask for any additional information that is needed. At this time they will also provide you with vital information such as the terms of the loan and the interest rates.

The details that you provided to the loan representative will be confirmed and then you will need to download an authorization form that will start the loan approval process. You will need to sign the application and fax it back.

The documents that you will need to provide to receive a home equity loan are listed below:

• W-2 Forms
• Proof of Income
• Proof of Homeowners Insurance
• Financial Analysis Worksheet
• Mortgage Statements
• Appraisal Forms for the Equity
• Bank Statements

Have this information ready when you first apply for the loan and it will save you a lot of time. Once all the information has been submitted it will be processed and then you will be asked to schedule a document signing. Make sure you understand everything in the documents before you sign so you don’t end up with any surprises later. The documents will be verified and validated and then sent on to the funding department. At this point the check will be issued and the loan is complete.

A home equity loan is a great way to receive the extra money you need to pay for any unexpected expenses that come along. It can be used for remodeling your home, medical bills, school expenses and so forth.