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The Major Keys to Understanding When It’s Time to Refinance Your Mortgage

October 18, 2016 by Mikel Erdman

The Major Keys to Understanding When It's Time to Refinance Your MortgageAs a homeowner, you may have heard the term re-financing without being aware of exactly what it means, but there are a lot of pros and cons associated with what it can do for your financial situation. While getting a different new loan for your mortgage can be a good financial decision in certain situations, here are some things you should consider before you decide that this is the right choice for you.

Getting A Lower Rate

One of the main reasons that re-financing can be a popular option for many homeowners is that it can provide the opportunity for considerable money savings. Since you will be acquiring a new loan with a lower interest rate, this will be an opportunity to reduce your monthly payments, increase your equity at a faster rate and invest the extra funds into something else. While a lower rate can definitely mean money savings, it’s important to consult with a mortgage professional so you’re aware of any associated fees and can make a decision that will be financially beneficial.

Consolidating Your Debt

It is often the case that people will choose to refinance their mortgage with a lower-interest rate in the hopes of paying off the debt they’ve accumulated, but with the cost of refinancing this is not necessarily the best financial decision. While consolidating debt can be great if you go into it with a budget that you plan on sticking too, if you’re leaning too much on the idea of a lower interest rate meaning instant savings, it may be a good idea to take a look at the numbers.

Investing In Your Home

For many people, re-financing their mortgage is a good opportunity to renovate their home and increase its value. However, while renovating your home can be a good idea for resale, there are many home renovations that will not necessarily increase the value of your home and make up for the amount you’ve invested. If you’re making forward-thinking renovations, refinancing is one thing, but ensure you’ve seriously considered what will add value.

There can be a number of financial benefits when it comes to refinancing your mortgage, but it’s important to work out your tentative budget and crunch the numbers before you make a final decision. If you’re currently looking into re-financing your home and are curious about what it entails, contact your local mortgage professional for more information.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage, Mortgage Refinancing

Are You Ready to Refinance Your Mortgage? Learn How to Do a Quick Refinancing Self-Assessment

September 1, 2016 by Mikel Erdman

Are You Ready to Refinance Your Mortgage? Learn How to Do a Quick Refinancing Self-AssessmentWhether you’ve decided to renovate your home or you would like to consolidate your debt, refinancing your mortgage can be an option in times of money trouble; however, it’s important to know whether or not this is the right step for you. If you’ve been considering refinancing recently and are wondering how to come to a decision, here are some questions you should ask yourself before wading into the water.

Do You Have The Extra Time?

It may sound silly, but looking into the details of financing your mortgage can take up a lot of time, and if it’s going to be stressful or tax your abilities too much, you may want to hold off until things change. Because there are so many details associated with refinancing, and the security of your largest investment hangs in the balance, it’s important to have the time to research and understand all the small stuff so you don’t fall victim to a bad loan or confusing mortgage terms.

What’s My Interest Rate?

It’s entirely possible that refinancing may not be worth it if you can’t get the interest rate you’re expecting, so don’t be taken in by low rates you may have come across. Because many unreliable lenders will offer the lowest rate to get your business, it’s a good idea to do the research and go with someone you can trust. Your credit score and financial standing will have a lot to do with the rate you qualify for, but if the interest isn’t as low as you’ve calculated, it may not be a beneficial financial decision in the end.

Will This Help My Financial Situation?

No one decides to move forward with a mortgage refinancing without thinking that it’s a good financial decision, and that’s why it’s so important to carefully weigh all of the variables before deciding refinancing is for you. From a job loss to a home relocation, there are many things that come up in life that we are not always financially prepared for, so make sure to consider as many possible pros and cons as you can before moving forward with this option.

Many people think that refinancing their mortgage will improve their financial situation and eliminate their debt, but it’s important to consider all of the outcomes of this choice before coming to any final decision. If you’re currently considering refinancing, you contact your local mortgage professional for more information.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage, Mortgage Refinancing

Thinking about Refinancing? 3 Ways That You Can Boost Your Home’s Assessed Value First

August 2, 2016 by Mikel Erdman

Thinking about Refinancing? 3 Ways That You Can Boost Your Home's Assessed Value FirstIn an effort to boost the value of their property, many homeowners invest in renovations that will help them sell at a higher price. However, with all of the renovation options, it can be hard to know what kind of fix-ups are really worth investing time and money into. If you’re looking at all of your options for home improvements, here are some surefire fixes that won’t stress the bank and will probably bump up the offering price.

Add In Stainless Steel

The look and functionality of the kitchen is one of the deciding factors for many homebuyers, and this means that if you have old appliances or an outdated look, you should definitely spend some money on a little upgrading. Since kitchen renovations can be a significant expense when it comes to knocking out walls and adding an island, you may want to stick with smaller stuff like a stainless steel appliance replacement or even renovating your cabinets for a more up-to-date look.

Increase Energy Efficiency

With the push towards reducing overall housing costs and being environmentally sustainable, making your home more energy efficient can be a huge selling feature for the kind of buyers who will be able to save money as a result of renos. While there are many financially taxing overhauls that can seriously bust the bank, try simple fixes like adding extra insulation where drafts exist, and installing LED lights for lowered energy costs and longer light bulb expectancy.

Prep For Paint

It may require a little bit of work to get the job done, but re-painting your home can be one of the best, and most economical, means for upping the value of your home. While painting can still be an economical option even with professional painters, a shiny new coat can take years off the look of your house and instantly improve its appearance. You just need to make sure you choose a neutral color and a high-quality paint for maximum effect.

While taking on home renovations will require a bit of spending, it can be a great idea if you’re re-financing your home and are looking to boost its value. The only thing to keep in mind is making sure you choose the kind of fixes that will be inexpensive and popular on the market. If you’re currently looking into your options for re-financing, contact your trusted mortgage professional for more information.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage, Mortgage Refinancing

Refinancing to Pay for Renovations? Consider the VA’s Energy Efficient Mortgage Program

June 8, 2016 by Mikel Erdman

Refinancing to Pay for Renovations? Consider the VA's Energy Efficient Mortgage ProgramMaking renovations that are energy efficient is not just a great way to reduce energy output, but it’s also an effective way of decreasing monthly utility costs. It serves as a one-time investment that will save money in the long run.

However, renovations are costly and not everybody has the extra finances required to make energy efficient changes. This is where the VA’s energy efficient mortgage (or EEM) program comes into play.

The program is designed to allow veterans to apply for a new mortgage or refinance an existing one with extra funds to renovate the home to be up to energy efficient standards.

The Three Tiers Under The VA’s Energy Efficient Mortgage Program

The VA has three tiers for the cost of renovations to be done under the EEM program. The lowest, and easiest to be accepted for, is for improvements that will total under $3,000. A list of costs or a contractor’s quote may be required in the application process.

The second tier is for renovations that will cost between $3,001 and $6,000. This will require the homeowner or homebuyer to get a Home Energy Rating System report to detail how efficient a home is currently and what can be done to decrease its HERS rating.

The final tier is for any improvements to the home that will cost over $6,000. This is the most difficult tier to receive acceptance for as both the Department of Veterans Affairs and the private lender will need to approve the renovations.

Types Of Improvements Under The EEM Program

The program covers a variety of renovations for the home. These include: new insulation to walls, floors and ceilings, solar powered heating and cooling systems, thermal doors, thermal windows and new caulking and weather stripping.

There are also items that will not be covered by the program, including new roofing, vinyl siding and air conditioning units.

Using The EEM Program To Receive A Larger Loan

Any veteran or currently active military member looking to buy a brand new home can still benefit greatly from the energy efficient mortgage program. If a new home undergoes a HERS report and passes as being energy efficient, this can be applied to a VA mortgage to receive as much as $6,000 extra on the loan.

Speak with your local mortgage professional to go into more detail on the intricacies of refinancing under the EEM program and whether or not your home will qualify. 

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

The HARP Refinance Program Has Been Extended into 2016: Here’s How You Can Take Advantage

April 28, 2016 by Mikel Erdman

The HARP Refinance Program Has Been Extended into 2016: Here's How You Can Take AdvantageWith the Home Affordable Refinancing Program recently being extended until the last day of December, 2016, many homeowners who have found their assets in a challenging situation have been given a second chance to apply and receive an affordable mortgage.

By taking advantage of the HARP program, eligible borrowers can refinance to the current mortgage rates on their homes while avoiding paying for private mortgage insurance or putting down the principal.

A Quick Primer On The HARP Refinancing Program

With the economy in a strong downturn in 2008, the value of millions of American homes plunged and the owners found themselves owning property with negative equity.

The Home Affordable Refinancing Program was created by the government to assist people whose home values were lower than the outstanding balance on their mortgages. Previously it would have been impossible to refinance for a better interest rate on the current value of the home, so HARP was designed to help any of these borrowers stay above water.

Who Is Eligible For HARP Refinancing?

There is a certain set of criteria that needs to be met in order to qualify for the HARP refinancing program, but two major points stand out: The mortgage must have been granted earlier than May 31, 2009 and it must have been granted by either Fannie Mae or Freddie Mac.

It is important to point out that many banks do not back their own mortgages and work as a servicer, a middle-man to collect the mortgage that is actually backed by Fannie Mae or Freddie Mac. Many borrowers believe they do not qualify without double checking with their lender to see if the mortgage was granted by Fannie Mae or Freddie Mac, so it is imperative to contact the lender or check online to see who granted the mortgage.

There are also several disqualifiers that should be known. With certain exceptions, many borrowers who have previously refinanced their home under the HARP program are ineligible. The other major factor is that homes must have a loan-to-value ratio of 80% or higher.

What Is The Next Step For Eligible Borrowers?

The next step for anybody eligible for the HARP refinancing program is to check the current rates and see if refinancing would be beneficial. Your local mortgage professional will have experience with the HARP application process and will be able to confirm today’s rates to see if applying is the right move.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

Can You Refinance into a VA Mortgage from Another Type of Mortgage? Yes, If You Qualify

April 8, 2016 by Mikel Erdman

Can You Refinance into a VA Mortgage from Another Type of Mortgage? Yes - if You Qualify VA mortgages stand out as one of the biggest benefits to men and women serving in the military. Although private lenders make the loan, the Department of Veterans Affairs guarantees all VA mortgages, which is why these loans come with favorable terms and benefits not found with other mortgage types.

The Benefits Of Refinancing To A VA Mortgage

A VA loan may very well be the borrower’s only option for putting no money down, as many lenders will cover 100% of the value of the home, thanks to the backing of Veterans Affairs. There is a ceiling on the amount covered depending on the area of the country, so contacting a qualified VA mortgage professional is the preferred way to discover limits locally.

VA loans also require no mortgage insurance, cover many of the costs associated with closing or refinancing and, in many cases, have lower mortgage rates than comparable loans.

Veterans who had never considered a VA mortgage may wish to take advantage of the flexible terms and the favorable market to refinance their current mortgage into one that offers tremendous benefits.

Qualifying For A VA Mortgage

Veterans Affairs mortgages are limited to service men and women and their spouses, a benefit for serving their country. After a set amount of service time veterans are able to apply for a certificate of eligibility that will allow them to apply for the loan.

Those who are eligible include most military members in active duty, members of the National Guard, veterans both discharged and retired, military academy cadets as well as any spouse of a deceased serviceperson.

Eligible Homeowners Can Refinance Through Cash-Out Refinancing

The Department of Veterans Affairs considers a conventional mortgage to VA mortgage refinancing to be the same as cash-out refinancing and treats it accordingly.

This process is as intensive as an initial mortgage because it will replace the current mortgage altogether, so all applicants are expected to go through the standard credit and underwriting process.

VA loans are incredibly beneficial to current military members as well as retired veterans who may have never considered taking advantage of the program. Although the mortgage can cover 100% of the value of a home, the actual amount varies depending on the area. The only way to know for sure how much will be covered and whether it’s the right time to refinance is to contact a mortgage professional who has experience with VA mortgages.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

A Step-by-Step Guide to Refinancing a Traditional Mortgage to a FHA Mortgage

November 19, 2015 by Mikel Erdman

A Step-by-Step Guide to Refinancing a Traditional Mortgage to a FHA MortgageRefinancing a mortgage can provide a homeowner with many benefits, and many are interested in refinancing their traditional mortgage into an FHA mortgage to take advantage of low interest rates. Depending on the specific circumstances, this step may lower the monthly payment, reduce interest charges, adjust the loan term so that it is more beneficial for achieving financial goals and more. Those who are interested in refinancing in an FHA mortgage may consider these steps.

Understand the Rules and Requirements

There are specific rules in place regarding refinancing under the FHA program. For example, the loan amount may be up to 96.5 percent of the value of the home, but the homeowner cannot take cash out of the refinance transaction. If cash is taken out, the loan-to-value limit under the FHA program is usually 86 percent of the property value. These limits are in place for loan amounts that are $417,000 and under. Loan amounts that are between $417,000 and $729,750 will fall under a different set of rules. Homeowners should be aware of these rules to ensure that the FHA program is the best fit for their unique goals.

Review Goals and Current Mortgage Details

The next step for homeowners to take is to review their own financial goals and to define their reasons for refinancing. In addition, it is important for homeowners to contact their current mortgage company to learn more about their current interest rate, if there is a prepayment penalty and the current loan balance. Estimating the property value is also important. Homeowners may have a reasonable idea about property value, or they can contact a real estate agent for a valuation. When all of this information is taken into account, the homeowner will have a better idea about what to expect from refinancing.

Each homeowner will be in a unique situation regarding current loan details, property value and goals that they want to achieve through refinancing. It can be confusing to decide if refinancing is the right move to make, and it can be even more complicated to determine which loan program is a best-fit for the goals of the homeowner. Those who are interested in refinancing from a traditional mortgage into the FHA loan program may contact a mortgage broker soon to discuss the options and to determine if this is a best fit option for them as a first step in the loan process.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

Understanding the Jumbo Mortgage and Why Refinancing These Mortgages is Different

October 1, 2015 by Mikel Erdman

Understanding the Jumbo Mortgage and Why Refinancing These Mortgages is DifferentIt seems like everything is getting jumbo sized these days. Jumbo sized soft drinks. Jumbo sized fast food meals. Jumbo sized smartphones. But one thing that nobody thought would get jumbo sized? Is mortgages.

So what exactly is a jumbo mortgage? How is it different from a standard mortgage, and what does that mean for your refinancing options? Here’s what you need to know.

Jumbo Mortgages: Larger Sums For Enterprises And Wealthy Buyers

As the name implies, the main factor that sets jumbo mortgages apart from standard mortgages is the loan limit. Fannie Mae and Freddie Mac impose mortgage limits all around the country, limits that vary depending on the cost of living in each individual state. But in situations involving highly valuable real estate – like luxury properties and commercial real estate – standard mortgages simply don’t give buyers the freedom they need.

Jumbo mortgages are also common in areas with high costs of living, where real estate frequently surpasses the standard loan limit in high-cost areas.

How Do You Qualify For A Jumbo Mortgage?

As would be expected when higher sums of money are involved, the eligibility requirements for a jumbo mortgage are much stricter than for a traditional mortgage. Jumbo mortgages aren’t subject to private insurance, which typically means a down payment on a jumbo mortgage will be significantly larger compared to a standard mortgage. That also means people applying for jumbo mortgages must demonstrate to lenders that they have the income and wealth to pay the debt.

Jumbo mortgages also require a higher credit score. While most buyers can get a mortgage with a decent interest rate if their credit score is 660 or higher, buyers applying for a jumbo mortgage need a credit score of at least 700 to even be considered by most lenders.

Jumbo mortgage lenders can require borrowers to have at least 6 months worth of payments set aside in a bank account at the time of closing, while the requirement is typically two months for most mortgages. If you want to qualify for a jumbo mortgage, you’ll also need to prove to your lender that your debt-to-income ratio is below 45 percent.

Larger Sums Make Refinancing More Complicated

When trying to refinance a jumbo mortgage, you’ll face tighter restrictions compared to a standard mortgage. You’ll need to have a significant amount of equity in your home before you’ll be considered for refinancing. And if you’re planning to roll your HELOC debt into the refinancing plan, you’ll have to ensure that you haven’t made any deductions against your home equity for the past 12 months.

Some lenders may also have other special requirements when refinancing a jumbo mortgage. For instance, if you’ve owned your home for less than a year, you might have to opt for a Freddie Mac or Fannie Mae loan – and regardless of what fair market value is for your property at the time you file for the mortgage, it will usualy be assessed at its original purchase price if you’ve owned it for less than a year.

Jumbo mortgages can be a great way to buy a luxury home or commercial investment property. But in order to be issued a jumbo mortgage, you’ll need to meet a strict set of requirements.

If you’re considering a jumbo mortgage, a professional advisor can help you understand your options. Contact your trusted mortgage professional to learn more about refinancing options and how you can qualify for a jumbo mortgage.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

What is HARP 2.0 And How Do I Know If I Qualify To Refinance With It

September 11, 2015 by Mikel Erdman

You Ask, We Answer: What is 'HARP 2.0' And How Do I Know If I Qualify For HARP?If you’re looking for home refinancing options, you may have had difficulty in the past – especially if you owe more than your home’s value on your mortgage. Getting refinancing consumes much of your home equity, which is in short supply for people who already have a mortgage.

But with the government’s extension of the HARP Program, you can now refinance your home with a variety of lenders – even if you owe more on your mortgage than your home is worth. This ‘HARP 2.0’ is a great way for responsible borrowers to find mortgage relief.

But how does the program work, and who’s eligible for it? Here’s what you need to know.

HARP: Affordable Refinancing For Low-Equity Borrowers

HARP, the Home Affordable Refinance Program, is a government initiative that was created in 2011. The program is designed to help homeowners who owe mortgages worth more than their home equity – so-called “underwater” homeowners. Under the original HARP program, homeowners with little or no home equity could refinance their home and benefit from lower interest rates – something that wouldn’t otherwise be possible.

HARP 2.0, an updated program, was released in 2012. HARP 2.0 is different from the original program in two critical ways. First, it allows borrowers who have mortgage insurance to refinance their homes. Second, it absolves lenders of any responsibility for fraud on previous loans (which removes barriers to issuing new loans).

Do You Qualify? Eligibility Requirements For The HARP 2.0 Program

HARP 2.0 lists several criteria that applicants must meet in order to be eligible for refinancing.

In order for you to be eligible for HARP 2.0, your mortgage must be owned or guaranteed by either Freddie Mac or Fannie Mae. If you signed your mortgage with another provider, it must have been sold to Freddie Mac or Fannie Mae either on or before May 31, 2009. You must also have no previous refinances under HARP.

(Exception: Fannie Mae loans refinanced under HARP between March 2009 and May 2009 are still eligible for HARP 2.0).

You need to be able to prove your income, employment history, credit history, and assets. Some lenders will require a minimum credit score to qualify for HARP 2.0, although this may not be the case in all instances.

Are you underwater on your mortgage? If you qualify for HARP 2.0, you could refinance your home at a lower interest rate and get the relief you need. Contact your trusted mortgage expert to learn more about how HARP 2.0 can make your mortgage more affordable.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

A Quick Guide to the FHA Streamline Refinance Mortgage Loan Program

September 1, 2015 by Mikel Erdman

The Ultimate Guide to the FHA Streamline Refinance Mortgage Loan ProgramRefinancing a home loan can provide numerous benefits, but it can also seem daunting and intimidating to some. Many homeowners would love to lower their interest rate or take advantage of other benefits associated with refinancing, but they are concerned about the time and expense associated with refinancing their current mortgage. The FHA Streamline Refinance loan program is designed to provide those who currently have an FHA loan with an easier way to refinance their mortgage, and this may be a desirable option for many.

No Appraisal Needed

One common complaint that people have when applying for refinancing relates to the expenses and time, and the appraisal can have a big impact on both of these factors. The good news is that with the FHA Streamline Refinance loan program, there is no requirement for a new appraisal. The home value at the time of the original loan will be used with the refinance loan, and this is truly beneficial for those who are currently underwater with their home value due to decreasing property values.

Lower Interest Rates

With the FHA Streamline Refinance loan program, borrowers can take advantage of today’s interest rates without needing to go through a full refinance process. This loan program is available to those who have a current FHA loan program, and it is a great program for those who have an interest rate that is higher than the current rates to lock in a lower rate and a lower mortgage payment.

Great Loan Terms

As with the traditional FHA loan program, the Streamline program also offers great loan terms. Borrowers can choose between a 15 and 30-year fixed rate loan, and borrowers will not be subject to a prepayment penalty. These loan terms provide borrowers with flexibility when refinancing their loan to take advantage of a lower interest rate.

The FHA Streamline Refinance loan program is just one of several options available to borrowers who are interested in refinancing their current FHA loan program. It offers numerous benefits to homeowners, but it is not the only option available.

It is wise for homeowners who are interested in refinancing their current mortgage to compare all of the options thoroughly before making a decision. It is best to seek assistance from a trusted mortgage professional. They can help with specific information and guidance with the selection of the right a loan program for each homeonwers needs.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Refinancing, Mortgages

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