Home Mortgage Refinancing the Right Way

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.

Even with bankruptcy, refinancing a home mortgage can put more money in your pocket every month with lower mortgage payments, or to finance a large purchase. However, sometimes a bankruptcy can hurt your chances of refinancing at a lower rate than you have now, making a mortgage refinance pointless. So make sure to research a variety of different mortgage lenders to know your options and the lowest quoted rates.

Good Reasons to Refinance a Home Mortgage.
There are many good reasons to look into refinancing. Mainly, people refinance to get a lower interest rate than they currently have. If you can refinance at just 1% (Hopefully more) lower than your rate is now, you may save hundreds of dollars. Ultimately, the goal of refinancing a home loan is to have extra money every month. Although some home owners do choose a cash out refinance where they end up increasing the cost of their home. A cash out refinance is just borrowing money from the equity of your home. This can appeal if you want to reduce debts, home repairs, home improvements, or other big purchases.

Repair Your Credit Rating Before Refinancing.
The chances of getting a good low mortgage rate immediately following a bankruptcy are pretty low. Therefore, it is advised to improve your credit score as much as possible before refinancing a home loan. You should get your own copy of your credit score before applying with different lenders. Use this report to fix any errors you encounter and to see where you can eliminate old debts and improve your credit score. Usually paying off store credit cards, credit card, auto loans is a good way to quickly improve your credit rating. Do not get yourself into more debt before a home mortgage refinance or modification, or get new lines of credit.

Research Potential Mortgage Lenders.
There are a lot of different mortgage lenders who specialize in bad credit, or post bankruptcy refinancing. Sub prime mortgage lenders are especially good at this and have a wide variety of options to help you. You can research potential mortgage lenders using the internet. There are a lot of websites out there from lenders trying to get your business. Make sure to shop around to find the best rates, terms and conditions you can. Once you get a rate quote you like you can shop that quote around to other potential lenders.

-M Petrone
http://www.RefinancingCondo.com

Recently, Obama announced his housing stimulus plan which makes over 5 million homeowners instantly eligible for refinancing into a 2% fixed rate. This stimulus package will lower homeowners monthly payments so take advantage now.

Here are some key elements to the proposed Obama housing stimulus plan:

*Help current homeowners who have seen their property or home values decrease by 15% or more with a option to refinance. This helps a lot of homeowners who have seen their property values drop in value in the wake of this mortgage crisis.

*Make loan modification and refinancing a home loan an easier, more beneficial to the borrower, process.

*To keep home mortgage interest rates locked in to a specifice percentage. Ideally a 2% interest rate across the board.

*Provide no assistance or help to market speculators. They ultmiately profit from other peoples downfall and should not be helped.

*Help homeowners who are facing foreclosure or may default on their mortgage by allowing them to more easily refinance their current home loan.

This tough economy is making it harder for good financially responsible home owners and mortgage payers to get that payment in every month in full and on time. Hopefully though by allowing them a chance to refinance at a 2% interest rate, they will lower their costs enough to increase their standard of living, pay off bills, or save. Also, recently millions of people or their spouse have lost their jobs or have had their income reduced, which is adding to the nearly 6 million homes facing foreclosure. Property values in neighborhoods are really struggling, a 2% interest rate would almost instantly raise home values as property values also rise as less homes are foreclosed on and more are bought and sold.

Mortgage Rate Predictions for 2009. Their is no doubt that the rough economy and the unstable housing market play a huge role in predicting home mortgage interest rates for 2009, however it is possible to come up with a good idea as to where the rates are headed. Here are some good ideas as to where mortgage rates should head for 2009.

Everyone is wondering where mortgage rates will go throughout 2009. Currently, mortgage rates are at a near all time low. In many markets, the mortgage interest rates are under 5% for a fixed rate 15 year mortgage. However, the only homeowners who can take full advantage of the lowest of the low rates have a FICO score over 700 and 20% to put down on the mortgage. Refinancing yo can expect a rate around 5.25% if you have good credit and good finances. Even with what I said above, many homeowners will be able to benefit financially from a mortgage refinance.

Mortgage Rates: 2009
Although nobody can be 100% sure where the rates will go, I do like to think I have a pretty good idea. I predict that due to refinance applications currently coming to lenders offices at record paces, that mortgage rates will temporarily increase. This is due to mortgage lenders being back worked from processing all of the paperwork coming in. While the temporary rate increase goes into affect they will be able to catch up on paper work and realize that they we're a lot busier with the lower rate being advertised. Over all I predict that home mortgage rates for 2009 will take a temporary .5% increase followed by steady steep declines throughout 2009.

It is generally a good idea if you are looking into refinancing to do it now. Get a locked in quoted rate on paper and you can potentially save hundreds of dollars per month.

Typically when applying for a mortgage loan, you quickly find out how many types of information you will need to provide. To begin with, you will need proof of income, checking or savings account information that goes back as much as 3 months to verify someone did not borrow you the down payment just for the looks, you will also need to provide tax returns. Also, you will need to bring a copy of the deposit that you gave to your realtor when you decide you found the perfect condo or home to finance. Almost all the time, the bank will send an appraiser out to the property your looking to finance, they also send an inspector out to make sure there is no significant costly damage that will need to be repaired within the first few months/years of your mortgage. You will also need to provide proof of home owner or condo owners insurance once the loan is approved.

Meanwhile, in the time between applying for either financing or refinancing you should not use any credit sources. Do not get anything financed or refinanced while the loan is awaiting approval. Refinancing loans are pretty strict and may take a few weeks to months depending on your personal financial situation. To receive refinancing in some instances you must pay off an old debt or two in order to turn that corner so the bank will refinance.

When your refinancing approval goes through it is all down hill from there. Meeting the bank and the Realtor one more time is needed before closing on the house or condo. Make sure to bring your down payment with you and anything else your realtor or banker asked you to bring in. Remember after the closing goes through the property taxes are now in your name, including any back taxes that were due on that property. You now will be the official condo or home owner!

-M Petrone
http://www.refinancingcondo.com

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