Home Mortgage Refinancing the Right Way

With the economy being less than stable these days business everywhere are swamped with the promises of saving money. Everywhere they turn they are offered ways to save on daily costs or they are offered an opportunity to reduce their overhead costs.

Many things can be done to reduce the overall expenses for a business. A few things that a business can do to reduce their cost of operation is purchase they very minimum of what they need, layoffs and even outsourcing is a possibility. It’s difficult to be a business in this economy people are doing everything it takes to stay above water.

All of this is happening while those lenders out there make getting credit harder than ever. These days it is very difficult to get credit to build your own business, lenders are making it increasingly difficult to get a line of credit and many of these same lenders are reducing and in some cases closing people’s line of credit all together. A great option that is out there is Refinancing.

Most people will think of refinancing their current loans only when they see rough times ahead. Usually business owners or homeowners decide to refinance when they know that their monthly payments are increasing or if they are about to default on a payment. There are many business owners never really think about the loans they have and as long as the payments are made and paid on time they don’t seem to worry about those loans. Since being a business nowadays is difficult, owners don’t want to approach banks or other lenders to restart the loan process over again.

Since many do not think of refinancing until they feel they need to, savings are being lost by hundreds of business owners. Also waiting to refinance when you are in trouble is going to be much more difficult and that much harder to find a lender that would be willing to help a struggling business in this economy. By refinancing your loans before being forced to can help your business grow and position yourself to save money while doing so.

Also, if you think that your lender now is thinking of raising rates or something like that, a great way to go around them is to refinance.

In order to always keep your finances in order you should always keep your eyes open and look for new opportunities. There really is no better time than now to refinance your home or business loans. Lenders are looking for new customers and are offering lower rates than ever before. Refinancing not only means your mortgage loans but if you are a business this also includes any and all equipment used to run your daily work day.

Example:

Let’s say that when starting your business 18 months ago, you also took a loan out for the equipment that you need. That loan you needed was for $80,000 and it was 8% for the next five years. If you were to refinance the loan at just 7% in the same time frame you would be saving about $500 every month. Once you refinance and start saving that money every month you can use that extra cash for other aspects of your business.

There is no quick easy answer to saving your business, however the combination of refinancing, cutting cost and getting more out of your current customers can help save not only much need cash but also the business.

In today’s economy the housing market has taken a few hard hits. The housing market has seen a drastic decline, which for many homeowners results in foreclosure. This drastic decline in the housing market and the current state of the economy, many homeowners are left jobless, helpless and in some cases homeless. Many homeowners are finding it harder and harder to make their monthly mortgage payments and due to this home foreclosures are on the rise. However, for those people that purchased their homes using an FHA loan they are one of the lucky few that can refinance their mortgage into a much more affordable rate.

These FHA home loans are becoming more popular especially in the last few years and many people have purchased their homes using this type of loan recently. Many homeowners and potential buyers have purchased their homes using a FHA loan mostly in part because the odds of being approved even with bad credit are greatly increased. Because you can be approved for a FHA loan even if you have bad credit and because many people these days have bad or not so great credit it is a great option to try and refinance or modify your current mortgage rate.

In general when people first hear about FHA loans they think that it is a government issued, backed or financed loan. However this is not true, what it actually is is simply a loan that is protected against defaulting by the FHA. All that the government does is insure the loan but it does not issue them. Many people that do not have the cash to put down on a home can benefit from using a FHA loan. These FHA loans do not have a limit for incomes when looking to purchase a home. These FHA home loans work with the buyer in order to rebuild, stabilize and revitalize the crumbling housing market and also get people into their own homes.

FHA mortgage loans are fairly easy to refinance especially in today’s economy. The FHA is really there to help those homeowners facing foreclosure stay in their homes or stop them from defaulting on their mortgage payments. What this translates into is many homeowners can refinance their mortgages into affordable monthly payments regardless of their financial situation or any other reason. With the FHA mortgage loan the biggest requirement that you may have is that you do not send in payments late or become delinquent in any type of way.

Use a FHA mortgage to refinance your home. You can potentially save your hard earned cash and have an affordable mortgage with just a few easy steps.

Homeowners who are having a hard time making their monthly mortgage payments can now take advantage of President Obamas “Making Home Affordable” plan. This plan makes millions of homeowners eligible to take advantage and obtain a new 4% fixed rate home loan through refinancing. Here is how it works:

-The mortgage must have less than $729,500 remaining on the due balance.

-The mortgage must have been signed on and completed prior to January 1st 2009.

-The home to be refinanced must be lived in as a primary residence by the owner.

-Your personal income can (and will be) be verified using tax returns and pay stubs.

-A letter of “Financial Hardship” written by and signed by you, in your own handwriting.

-The homeowner must agree and goto free credit counseling if their monthly household debts exceed 55% of the homeowners gross monthly income.

Here are some options Mortgage Lenders and Banks can offer using this plan:

-Your monthly mortgage payments will be lowered to no more than 31% of your gross monthly income.

-Interest rates can actually go to as low as 2% but typically will be closer to the 4% range.

-Their will be no fees or other costs for performing a home mortgage modification or refinance.

-Banks and mortgage lenders could potentially set up balloon payments at the end of the mortgages in order to recover their money from offering such low monthly payments. This payment needs to be paid off prior to selling or refinancing your home another time.

-For every year of on time payments, the Government will reduce the amount of principal you owe on your home by $1,000 up to a maximum of $5,000 just for making payments on time.

-The banks and mortgage lenders can adjust the interest rates after a 5 year period. This plan is to help homeowners recover from their financial troubles.

-This plan can only be used one time to refinance or modify your home loan.

If you have remained current and up to date on your monthly mortgage paymentsq, and are not able to modify your home loan, then refinancing may be the best alternative option. Refinancing into a fixed 4% interest rate with President Obamas plan can be very easy. Here are some requirements for this:

-Again, the home must be a primary residence.

-Proof of income to support the new mortgage and other debts is required.

-Cash taken out from the new home loan can not be used to pay other loan debts you may have.

-The home loan must be financed by Fannie Mae or Freddie Mac.

-The mortgage interest rate will be determined by the national average and points may be added on as well as fees charged.

-The new mortgage will be either for 15 or 30 years with a fixed rate of interest.

-The banks low interest offers may expire after an initial 5 year period.

-Homeowners can even refinance if they have a mortgage worth up to 5% more than their homes current value.

Home mortgage refinancing or modification, especially using this plan will benefit millions of homeowners. The reports are coming back already and the average homeowner is saving hundreds every month by taking advantage of this plan and refinancing their home mortgage.

Most people use refinancing to take advantage of lower interest rates that may be available now but were not available when they took out a mortgage on their condo. More to the point, it is going through the procedure of taking out a second mortgage, and turning around and using that cash to close, or pay off a current mortgage.

If you are lucky enough to refinance your condo with a lower interest rate then when your first got the mortgage then your monthly payments should be lower, even if your new mortgage on your condo is for the same amount than your old one. Before you start the refinancing process, you need to weigh the savings of a lower monthly payment with the costs associated with refinancing.

Usually, the rule on refinancing a condo is that the interest rate of the new mortgage should be -2% (about two percent lower) than your current mortgage. These days there are tons of no cost refinancing options available. Overall it is probably likely that should you decide to refinance your condo, you will be saving money (by obtaining a better interest rate)

Condo refinancing is a good opportunity to gather a quick large sum of cash. You can use this cash to upgrade your condo and increase its future value even more. Probably, your condo has also risen in value, that will be taken into account in the second mortgage. That means good news for your with the new refinancing!

Things to know before starting the refinancing process:

Know YOUR reasons to Refinance

1. Most likely a condo mortgage rate is lower now than it was when you bought. Refinancing will put cash in your pocket, with a lower interest rate your monthly condo mortgage payment is smaller.

2. Obtain a Fixed rate mortgage instead of the A.R.M. (adjustable rate mortgage) you have now.

3. Obtain a A.R.M. for your condo with better terms than the one you are in now.

4. Fast way to grow equity. Just by refinancing your condo

5. Turn equity into cash. With the new smaller interest rate you receive through refinancing on your condo you will most likely have a good sum of built up cash coming to you!

-M. Petrone

The biggest fear homeowners have when refinancing their home mortgage is being ripped off. Many homeowners are convinced that the best way to avoid being ripped off in a mortgage refinance is to search for the best mortgage rate quotes they can find. One of the best ways to quickly find a good mortgage rate is to use the services of a mortgage broker. However, here is where I want to caution you about the biggest secret in the mortgage refinancing industry. The secret no broker or bankers want you to know.

So, What is this secret that desperately needs to be exposed that can save you thousands?
On a daily basis, homeowners are being ripped off from mortgage brokers, lenders, and banks without even realizing it. How? By being ripped off by the mortgage lender and paying extremely high closing costs compared to what your costs should be or are compared to other homeowners in the same situation.

So what makes these closing costs so high... and why?
Sometimes mortgage lenders or brokers get together with their lawyers and then charge higher fees based on a lawyers time as well. These lawyer fees end up being passed on to you even though the lawyer was not necessary for most or all of the time. This is more of a red flag if the potential lender or broker offered you their service for “free”. When the word free is used to describe closing costs it just means the lender is making money off you in other ways. A lot of unethical mortgage lenders will grab your attention with these free or low cost refinance options. Sometimes, they will even give you cash when you refinance with them because they know the money will be coming back to them eventually. They will always work it so that you are paying more for this “free” or reduced cost closing than you expected. They will stack the deck in their favor.

Who else will be able to use this kind of scam on me?
You need to be cautious of anyone you are dealing with not only your mortgage lender or bank. Your real estate can just as easily perform the same sort of under handed scheming to you. That is why it is very important to do proper research on any potential mortgage lenders or banks. Know your estimated costs up front. Demand every single fee or related cost is estimated and quoted before the closing is set to take place. This way you can review the fees and ask any questions before signing off on the new loan. Mortgage lenders with long histories are often more stable and financially secure than fly by night mortgage companies. Usually the big lenders do not pull these cheap and greedy scams but be aware none the less. Practice patience and find the perfect lender, terms, rates, and conditions for your home mortgage refinance.

-M Petrone
www.RefinancingCondo.com
Taken from: http://www.refinancingcondo.com/2009/02/greedy-secret-of-mortgage-refinance.html