COMMON REFINANCING QUESTIONS AND ANSWERS
When interest rates fall, a homeowner should definitely call
us about refinancing, but he or she should discuss their entire
financial situation and goals before making any final decision.
Is your goal to lower your monthly payment? Consolidate debts?
Get cash out for a new purchase? Increase your interest deduction
expense for your taxes? Ask your loan officer to provide a couple
of refinance options for you, showing how your loan term length,
monthly payment and your total interest expense on the loan will
change. After looking at these options, it will be clear whether
or not you should spend the money to refinance.
How do I know when I should refinance my current mortgage
It is often said that you should refinance when mortgage rates
are 1% lower than the rate you currently have on your loan. Refinancing
may be a good option even if the interest rate difference is less
than 1%. A modest reduction in the loan rate can still reduce
your monthly payment. The amount of savings in any situation will
depend on your income, budget, loan amount and the change in interest
rate. Your loan officer can help calculate the different options.
What are points?
Points are costs that need to be paid to a lender in order to
receive mortgage financing under specified terms. A point is a
percentage of the loan amount.
What does it mean to lock the interest rate on a mortgage
Due to the nature of interest rate movements, mortgage rates can
change dramatically from the day you apply for a mortgage loan
to the day you close the transaction. If interest rates rise sharply
during the application process, it could make a borrower's mortgage
payment larger than he/she previously thought. To protect against
this uncertainty, a lender can allow the borrower to 'lock-in'
the loan's interest rate, guaranteeing the borrower the prevailing
loan rate for a specified period of time.
I've had credit problems in the past. How does this impact
my chances of getting a home loan?
Obtaining a home loan is possible even with very poor credit.
If you have had credit problems in the past, we will consider
you to lend to.
I've been late a couple of times on my credit card bills.
Does this mean I will not qualify for a 2nd mortgage?
Apply, because we have programs for all types of credit.
Can I buy a house if we have limited credit or a low fico score?
Yes, in some cases lenders will approve Home Loans with Low Credit Scores.
Do I have to provide my Social Security number?
No, but it is recommended to streamline the process. We need your
Social Security number to access your credit history.
What do I do if I don't know the "current market value" for
Please provide us with an estimate of the amount for which you
realistically think you could sell your home. Looking at recent
sales prices for similar homes in your neighborhood can help you
estimate your home's market value.
Do I have to answer all of these questions to proceed?
Yes. You need to answer all of these in order to receive our best