Posts Tagged ‘Home Refinance’

What Is The Process Of Refinancing A Home Loan?

Refinancing A Home Loan Process Explained

The mortgage refinancing process is some what more simple than the first mortgage process. But still many request to know what are the stages for a mortgage refinancing process, so they know what to expect, and how to plan ahead. In this short review you can read the step by step explanation of a home loan refinancing process.

The refinancing is easier than ‘mortgage buying’, where you need to move to your new home. The refinancing process is a little bit less hectic, because nobody is moving.

First Step Is Do Your Homework

The homework in the refinancing process, is to do a small research about the money you owe on your current mortgage, the equity you may have built up (or not), the kind of mortgage rates you have (Fixed or ARM) and what are your future goals. Before you even begin the home loan refinancing process you should make sure you don’t owe more than your home is currently worth.

• First of all check how much you owe on your current mortgages.
• Second you need to check the current market value of your home.
• When you have those two parameters – Check you don’t owe more than your home is currently worth.

What are your expectations from the home loan refinancing process? These factors should be taken to consideration, as they are your financial goals. Each goal can trigger different decisions regarding the mortgage refinance process.

• Lower the monthly payments ? By lower rates or extend the mortgage life.
• Change the mortgage rates program (ARM, Fixed, Interest Only)
• Avoid Foreclosure
• Cash-out refinance – Use Refi to pay off other high-interest debts you may have.

Second Step In Refinancing Process – Go Shopping

Just like you do (or should do) when you buy a car or vacation. If you shop for cheap airline tickets worth $2000 you should shop for refinancing mortgage quotes. Sit down beside your computer or smart-phone and apply for some quotes from lenders.

This second step is important, as it will give you a ‘look & feel’ for your next mortgage deal. Send out requests, see what the lenders are willing to offer you. Use the web to search offers from lenders you have not been in touch, as well as lenders who already know you. See the difference, check which lenders send better quotes.

Third Step Refinancing Valuation

You now hold of some quotes, and you have your goal you have set for the home loan refinancing process. It is important to explain, that it might be not worthy for you to refinance. You need to compare the savings from the reduced rates to the cost of refinancing to see if it’s financially beneficial for you.

Forth Step – Lenders Will Be Checking You

There might be some differentiation here depending upon the lenders verifying key data, but at this stage, once you picked a quote the lenders will now begin to check your financial possibilities (unlike pre-approval) they will need to see documentations.

• Within three days you should receive loan disclosures, which you must sign and return to the loan consultant or lender.
• Most lenders will want to appraise the house; if the mortgage was taken long time back and the market value has changed. The appraisal fees & costs will be added to the closing costs.
• A thorough qualification check for income, assets, and FICO score credit report.
• Lenders will request a title search, to determines if there are any other liens (tax liens) on the property.

Fifth Step – Closing Refi Loose Ends

The lenders have finished to gather all the needed information and they are ready to proceed with the refinancing transaction process.

• Assigned underwriter will review the loan file with all the information gathered inside, and request any stipulations (further information/documentation) to provide a final approval.
• The finished loan documentation is created and sent to the party closing the loan. This may vary by state but in most cases it can be a title company, attorney or notary public.

The final step in the home loan refinancing process, is the 3 day rescission period. During this time you can evoke your right to rescind (cancel) your mortgage loan. After these three days, the new home loan will be finally processed and approved and you have full legal liability for paying it back as agreed.

Congratulations – Refinance Process Completed

The new lender will payoff the full remaining mortgage amount to the current mortgage company. The new title is recorded and you have finished the whole mortgage refinancing process, and will get the funds of the new home mortgage loan.

Lawyer Vs Title Company When Refinancing

Refinancing? Get a Lawyer Or Title Company

When a person decides that the financial terms are at the right point so it is worth to refinance, then they might want to consider to have some lawyer legal advice or Title company legal escort while refinancing the mortgage loan.
There are many aspects to this decision and it is based upon the way the mortgage loan was taken in the first place.

If all the paper work and details where straightened out, agreed and understood, then there in no legal need for a lawyer to participate in the refinancing process.
If the terms of refinancing are unclear, or any personal changes (divorce..) might have happend during the lifetime of the mortgage loan, then a lawyer that works on your behalf will keep your interests and your ‘back’ when you refinance the home loan.

Lawyer Advice When Refinancing

Actually not any lawyer will be able to help you, you need to look for real estate lawyer as the real estate laws are different from state to state, and your business lawyer or personal lawyer may not know all the fine prints and aspects of the local laws.

When you approach the bank or the lender, and ask to begin the home loan refinance process, you can be pretty sure that they will have a lawyer guidance on their side. But the presence of such lawyer is not enough for you, as the lawyer is there to protect the bank or lender, and he/she concerns will not be evaluating your side of the deal.

A lawyer can negotiate your refinancing rates as a person who is only representing you, he/she has a better position because it is not one of the sides and can ask more demanding requests.

Though having a lawyer take a look at the refinance contract, the new mortgage agreement, paperwork and fine prints could be a safe move. This means having to pay extra money you didn’t plan to pay, and lawyers are never ‘cheap’, but not having a real estate attorney examine the refinancing documentation can be much more expensive in the long run.

What Is a Title Company

When people are selling and buying real estate and because the real estate laws are complex with many legal aspects Title Companies insures that title to real property will not be adversely impaired by undisclosed defects or encumbrances.

The Title companies are experts in this field and have the people and the know how of specific laws and rules that are unique for every state. For this reason before people pay for real property they would like to check the property Title status. When this is done correctly any undisclosed issues that may risk the ownership of the buyer are then found and are placed for resolving before the actual payment process takes place.

Title company And Refinancing a Mortgage

When refinancing the process is taking a new home mortgage and paying the old mortgage out. So refinancing is actually taking a home loan with new rates and conditions. This is where Title insurance company (also known as Title insurer) come into the picture as their business is selling policies of insurance guaranteeing the ownership and quality of title to land.

Unlike taking a mortgage where owner’s title insurance policy is a must, when refinancing the owner’s title insurance is not really necessary. This may change at different states, in some the owner’s title you already purchased with the original loan will suffice, in other states it depend how long ago the owner’s title was done.

You might be eligible for discount rates on title insurance on refinance in the state and within your case, you can ask the lender or get professional advice from property law attorney.

What Title Companies Check

The Title company will check and abstract the public land records to investigate the title to the property. This is called “abstract of title” which means searching the real estate records in the county where that particular piece of property is located.

At the end of the examination process the Title company  will issue a Commitment of Title Insurance – which will be sent to all parties involved buyer/seller and especially the bank or lender.

In the Commitment of Title Insurance they will specify the contract seller is the legal owner. If there are any open mortgages on the real estate property, and also information that may affect the usage of the property or grant right limitations like existing restrictions, easements, public utilities. In most cases the commitment will include property taxes and other assessments.

When all the needed aspects are finished there will be a – Closing Statement. This Closing statement is also known as HUD-1 which described to details the financial parts of the mortgage refinancing agreement such as:

• Mortgage lender’s charges,
• Charges for preparing mortgage documents,
• The title company’s fees,
• Recording costs, mortgage closing costs.
• The amount of the payoffs to release any existing mortgages,
• Pro-ration of city and county taxes,
• Real estate commission fees,
• Survey fees,
• And any other costs associated with the deal.

Lawyer or Title Company

There are pros and cons to lawyer or title companywhen refinancing, you need to check whether all the details of the refinance documentation are clear to you. If there are no major changes and you are familiar with the fine prints and the lender has a Title company dealing with the new mortgage then hiring a lawyer might nt be needed.

If some of your personal needs have changed and the refinance needs to cover those issues, then you need to find a property real estate lawyer to keep your new interests.

5 Smart Tips to Refinance Your Mortgage

Smart tips to refinance your mortgage

If you are eligible to get a lower interest rate on your mortgage, you must go for a mortgage refinance. A refinancing may also save you money by reducing your mortgage rates. You are eligible to refinance, when you already have a mortgage and you are applying for a second loan to pay off your current home loan. There are various benefits of refinancing your mortgage. It may help you secure lower refinance rate, lower payments, shorten the term of your mortgage and help you change to an adjustable rate mortgage or to a fixed rate mortgage. However, to secure an approval for refinance mortgage you must keep in mind certain tips to make sure that your application stays on top of the pile. This article provides you with information about the tips you need to know in order to refinance your mortgage.

Tips to refinance your mortgage 

Here are some tips you need to follow in order to get an approval to refinance your mortgage successfully.

 1. You must have patience – You must have enough patience to get an approval for getting your mortgage refinanced. You must realize that the processing of all paperwork may take sufficiently long time. You must also be cautious to take a good care of your credit score. Make sure that you make payments towards your debts on time, pay off mortgage timely and do not incur more debts unless and until you have paid off your old debts.

2. Contact your representative – You must make sure that your loan representative keeps contact with you even if there is no action conducted on your loan. If you fail to hear from your loan representative, contact him on your own and ask for an update on your loan.

 3. Be realistic – Lenders are quite strict while refinancing your mortgage. Your lender will look for a good credit score and you must also have some equity in your home to refinance. Thus, it is essential to calculate how much equity you have in your home to refinance. In order to find out how much equity you have, you need to subtract the total amount you actually owe on your current mortgages from the amount you think your home is worth. After calculating if you find out that you owe more than the value of your home, it means that you are not eligible to refinance your mortgage at the present moment.

 4. Ask questions – It is necessary that you understand all the details of the terms of your loan. Thus, ask questions if you have any doubts that may arise regarding your loan documents. Make sure not to sign up any loan documents unless and until you are satisfied with the information provided to you.

 5. Prepare your documents – Get your documents ready as you will be asked for more information and documentation in order to get an approval for your refinance. Make sure to document your income and your assets. Thus, preparing your documents is an essential thing that you need to consider before you go for your mortgage refinance.

Apart from following these tips mentioned above in order to refinance your mortgage you must also be ready with cash in your account. After your loan has been approved you need to make payments for any out-of-pocket closing costs. Thus, follow these tips in order to make a smart move towards getting your mortgage refinanced easily.

Negotiate for 2011 Refinance Rates

Negotiating Will Save You More Mortgage Money Than The Broker

Negotiate to Get the Best Home Refinance Rate

Nowadays, with interest rates still at near-historic lows, there’s never been a better time to negotiate with a mortgage lender to the get the best home refinance mortgage rate, for a fact. When one considers that just a single one-point drop in a current interest rate on a mortgage of $250,000 can save hundreds of dollars per month, it’s hard to see a reason for why not to do so.

Certainly, those folks who are sitting at 2011 with a so-called “bad credit” home loan (a sub-prime loan that’s at least 3 or 4 points above loans based off of the prime interest rate) need to be looking as soon as possible for the best home refinance rates.  If they’ve been able to prove outstanding payment history, then it’s indeed possible to pull off a bad credit home mortgage refinance.

In truth, the best home refinance rates are still possible to get from mortgage lenders even in the most credit-tightened financial climate, but it’s going to be necessary to do a little research to first find it and then to present the strongest case possible to get that rate. There are numerous Internet-based tools to find the best home refinance rate, first of all. Just use a search engine to get started.

The formal name for these 2011 loan programs – and many are being offered under the auspices of a federal program like the FHA or the USDA rural plans, set up to help homeowners get out from under onerous home loans – has to do with the best refinancing mortgage rates, by the way. That’s why it’s important to make sure any lender approaching with what appears to be a low offer on the best home refinance rate is offering the right program.

Some of those programs have very good 2011 mortgage interest rates, but are for military and VA loans only.

Once a program’s been identified, there are a number of steps a homeowner can take to make the best case possible in order to get the best home refinance rate and which complements a sterling payment history. A willingness to pay what’s called a “buy down” on the points to be offered can also help secure the best home refinance rate. Offer the equivalent of 1% of the loan value if negotiations bog down.

This doesn’t mean, of course, that one will have to “bribe” the lender to get the best negotiable refinanced rate, though, and the offer should be used only if absolutely needed. If there’s proof of quality home upkeep and improvement that can be shown, then the best mortgage rate – or at least one that’s pretty darned good – should be offered fairly quickly.

In the end, securing the best possible refinance rate is more a matter of preparation ahead of time – meaning to dazzle the lender with real proof how reliable a borrower one can be – rather than of asking the lender what it can do and then reacting to its offers. Always be proactive, and the chances of success will be high.