![]() How long does it take to go through the refinance process?Ī typically refinance usually takes between 2 and 4 weeks. Now is the time to refinance because interest rates are so low. Depending on the type of refinance loan you opt for you can take out cash to use for bills, home repairs or whatever you might need it for.Ĭan I "lock-in" an interest rate on a refinance loan? Additionally, your home will need to have increased in value since you purchased it. This means that your home is worth about 10% more than the loan that is current on the house. The general rule is that you need to have 90% loan-to-value ratio before you can refinance. So if you don't have perfect credit you can still qualify for a refinance loan but you'll want to make sure that you're lowering the interest rate on your loan enough to make a refinance worth it.ĭo I need to have equity in my home to refinance? When considering a refinance loan it's important to remember that the better your credit score the better interest rate you can get. Will I need to get an appraisal when I refinance?ĭoes bad credit exclude me from a refinance loan? Borrowers with less than a 20 percent down payment are required to carry this insurance as a means of protecting the lender against default. PMI stands for Private Mortgage Insurance. Additionally, with low- and no-cost refinancing options available, the cost of refinancing can be recovered much more quickly. If you think you will stay in your home for 5 or more years, for example even a 1% interest rate reduction will pay off for you. While this rule is useful as a point of reference, it shouldn’t be adhered to strictly. The 2% rule states that you should aim for a 2% lower interest rate in order to ensure that the savings generated by your new loan will off-set the cost of refinancing, provided you’ve lived in your home for 2 years and plan to stay for at least 2 more. On the other hand, a loan modification usually means extending the term of the loan and increasing the interest rate, but adding no other fees. When you refinance, you may be able to get lower interest rates, but there are additional costs. Should I modify my loan or apply for a refinance? Alternatively, an Adjustable-rate Mortgage (ARM) will be subject to periodical interest rate adjustments based on interest rates around the country. The interest rate of a Fixed-rate Mortgage (FRM) will not change for the life of the loan. The rate refers to what percentage of your loan you will pay in interest per month, whereas the annual percentage rate (APR) is an adjusted percentage that expresses the yearly cost and also includes certain charges and fees. How does the APR differ from the interest rate? By paying 1% of the total loan amount up-front, a borrower can lower his interest rate by about 1/8%. Points (or discount points) are a way of lowering your interest rate. You may choose to pay points (see below) to lower your interest rate, or you could want to do a Low- or No-cost refinance. Typically, the closing cost of a refinance is between 1% & 2% of the loan amount, lender fees included. Refinancing is simply getting one loan to pay off another. That's why we've put together a list of common questions that homeowners have when considering refinancing. Our staff of refinance experts will help you evaluate your mortgage needs and draft a refinancing plan that will save you money.īe sure to check out our mortgage refinance center to get the information you need so you can make a sound decision for you and your family.ĭetermining if a home refinance loan is right can be confusing. At Stonebrook Lending DBA Arch Lending we’re ready to find the right refinancing solution for you. Getting a lower monthly rate and paying less over the life of your loan just makes sense. Refinancing is an easy way to solve many of your mortgage worries. Will other financial opportunities present themselves as you refinance?. ![]() Are mortgage rates currently lower than what your rate is?.Has the time come to save more money every month?.Is Private Mortgage Insurance (PMI) getting you down when it doesn’t need to?.Are you tired of your adjustable-rate that never seems to stop adjusting?.You should take the time to consider the following questions to see if refinancing makes sense for you. Your situation and needs change over time so why shouldn’t your mortgage? Now might be the right time for you to refinance into a lower rate mortgage. Refinancing a home mortgage can be a big decision for many homeowners.
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