Monthly Archives - February 2017

In What Case Do I Need To Refinance My Mortgage?

In cases when the rates are lowered, of course! Nevertheless, though, there is a bit more to the process. Seeing how the rates seriously dropped in recent times, it is only natural that you will be thinking about refinancing. Yet, is refinancing the answer to all of your problems? A lot of property owners actually pick the refinancing option to save more money, yet in the end it could lead to entirely unexpected results. Regardless of whether you want to lower your monthly payment or pay off your mortgage even sooner, you need to consider some important factors in order to make an informed decision that will benefit you in the end.
So what does refinancing actually stand for? In case you are refinancing your mortgage, it basically implies that you are planning on paying off your existing loan and replacing it with an entirely new one. There are plenty of reasons why property owners may turn to refinancing. Among the most common ones are the following:

  • In order to get a lower interest rate
  • In order to shorten the mortgage term
  • In order to convert from an ARM (adjustable-rate mortgage) to a fixed-rate one or even vice-versa
  • In order to tap into the equity of the property and to finance a big purchase

And who will help you with all that? Well, if you are interested in locating the right individual who can help you refinance, your very best option would be to find a mortgage lender. As their extensive knowledge of mortgage programs is genuinely substantial, they will have the skills and the expertise to help you find the ideal program and will make sure that you are making financially lucrative decisions to begin with. A good mortgage lender will have what it takes to assess the financial situation you are in and will establish whether refinancing will make more sense in your case. They will end your confusion and will provide you with all the information you may require during the process.

It will be possible for you to refinance your mortgage for several purposes, which could prove to be advantageous for you:

  • Shorten the term of your loan – you will be able to refinance for a shorter term loan. For instance, you will be able to actually switch from a 20-year one to the 10-year one, if you like.
  • Converting between the adjustable and fixed rate mortgage. You will be able to switch to yet another program – one with a stable rate or an interchangeable one.
  • Tapping into the equity of your property. You will be able to use the equity that you have built into your property to finance yet another big purchase.

If your mortgage balance actually exceeds the overall value of the property, it will be quite challenging to refinance. If your mortgage is “under water”, the refinancing options are going to be pretty limited. Still, there are several options that will help you with that:

HARP

The Home Affordable Refinance Program (HARP) may help you refinance if you are eligible for it. If you qualify, you will be able to refinance a loan from 105% to as much as 125% of the overall value of the house. However, there is always a catch – you will need to be on your way to foreclosing and if you had any delinquent payments within the last 12 months, you are going to be disqualified. In addition, Freddie Mac or Fannie Mae will need to own the loan.

If you are pretty much out of any additional options, this may well be the ideal program for you.

HAMP

Well, perhaps things are even worse than you initially considered they are. Along with an underwater mortgage, you have also managed to miss payments.

Thankfully, there is a way for you to qualify for the HAMP (which is the federal Home Affordable Modification Program) and it will be available to you via your mortgage lender. Once more, the mortgage will need to be owned by Fannie Mae, Freddie Mac or any other party signed up with the U.S. Treasury in order for you to meet the qualification criteria.

Despite the fact that it really is not a refinancing program, it may still lower the mortgage payments, but your best bet will be bringing it up with your trusted lender in order to verify if it is a good idea for you to begin with.

If you choose to resort to refinancing your mortgage, our experienced Los Angeles mortgage broker company will assist you in every step of the way.