If you are one of those people who have difficulties
paying your first mortgage and you are looking for options to help you
with this, mortgage refinancing might just as well be the solution for
Mortgage Refinancing is what usually financial experts recommend
leveraging mortgage rates. It is fundamentally paying off your first
mortgage and getting a second mortgage. Most borrowers who for mortgage
refinancing do so to have immediate equity on the mortgage and to
change loan type. Other reasons include to take advantage of improved
credit ratings. But, the most popular reasons for mortgage refinancing
is to obtain lower interest in the mortgage to lower monthly payments.
Before you can get a mortgage refinancing, various information
that were required in your first mortgage will again be asked
from you such as your financial records and credit reports for
you new loan report. The lender will require information about
your debts and current assets, verification of your employment
and your income, your financial accounts such as checking and
savings and the title of your land.
Lenders may also require you to submit an appraisal and the survey of
the site where your home is constructed or will be constructed.
Information about your first mortgage such as your current monthly
payments and outstanding mortgage balance will also be required by the
lender before mortgage refinancing is approved. Aside from these, the
status of insurance payments and property tax will also be considered.
In cases where you are refinancing from another lender, original lender's
contact information should also be submitted.
Of course, when you undergo mortgage refinancing, certain fees and
costs are involved. Some fees that are originally paid during a mortgage
closing out are paid during a refinance. Some of these are:
- Application fee
- title search
- title insurance fees
- appraisal costs
- prepayment penalties
- loan origination fee
- discount points
- and if applicable, legal service fees.
Some financial institutions
offer negotiations on these. And others allow borrowers not to
pay these costs but are expected to have a higher interest rate
in their mortgage refinancing.
It all sounds easy enough but just as you did on your first mortgage,
there are some things you need to consider before going for mortgage
refinancing. Fannie Mae, a well-known stockholder owned company
that provides guidelines for conforming mortgage loans provides
these considerations you need to assess in yourself before considering
- the length of time you think you'll stay in your house
- the number of years left to pay for the existing mortgage
- the ability to afford the costs involved and,
- the ability to save money while paying the loan.
To further see the impact of mortgage refinancing to your financial plans
and objectives, many mortgage calculators are available online. There
are usually different variants of these depending on the type of mortgage
refinancing that you want and need. Some calculators compute whether mortgage
refinancing will lessen costs, while others are used for refinancing 2
mortgages. Another calculator can be used to study if mortgage refinancing
of one mortgage into two mortgages can lessen costs while a calculator
for borrowers enrolled in Adjustable Rate Mortgage who want to refinance
in Flexible Rate Mortgage is also available.
Aside from self-assessment and mortgage calculators, it is also recommendable
for you to ask advice on mortgage refinancing from your financial adviser
and on the lending company where you had your first mortgage.