Common Facts on Refinancing a Mortgage

Refinancing a mortgage enables a homeowner to substitute a new mortgage in place of the current loan. You may go for a refinance, if the fresh mortgage scheme secures a lower interest rate. In general, a refinance will entail a change in the lender. However, in some cases, your old lender may agree to refinance your loan, if you have a favourable credit history.

Benefits of a Refinance Plan

A homeowner can take on a mortgage with lower interest rates than those on their original mortgage. They may reduce the monthly loan payments, significantly. In addition, if the current value of their home exceeds the unpaid mortgage on his home, they can hope to receive a sizeable loan.

Reasons for Popularity

The understanding of property prices has made refinancing an attractive idea among homeowners in the country. An increase in the worth of a home implies positive equity for the owner. Homeowners are eager to convert their equity into ready cash for other expenditures including; home improvements, medical bills and funding college education for children. Furthermore, a refinance may help a homeowner to consolidate monthly payments of their existing debts.

Deciding for a Refinance

A homeowner ought to enter into a refinance package after developing considerable equity on their home. They can hope to achieve this by making several monthly repayments on their original mortgage. In addition, the homeowner should make an effort to improve their credit score wherever possible. These measures will help a homeowner to secure a fresh mortgage at low interest rates and make the refinance a meaningful venture.

Need for Closing Costs

A refinance is an entirely new scheme. A homeowner will have to pay all aspects of the opening costs, which they paid for the earlier loan. In addition, the lending institution obliges you to pay a fee to change the existing loan into your new scheme. The conversion fee could be substantial and a borrower ought to evaluate the costs involved in both the schemes. There are other potential charges including (but not limited to)bank charges and the fees for the lawyer acting on behalf of the lender. In addition, a borrower may decide to avail of the services of a lawyer to help them with any legal issues. This may involve an added expense. You may resort to a refinance option, if the new rate of interest allows you to gain an edge over the extra costs for refinancing.

Deciding on an Escrow Account after a Refinance

The monthly mortgage dues of a borrower consist of homeowner’s insurance, private mortgage insurance and property taxes apart from the mortgage principal and interest payments. Lenders require that you pay the insurance amounts and the property taxes in an escrow account held by a third party called escrow services....

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HUD Guidelines for Manufactured Homes

A set of directives prepared by the Department of Housing and Urban Development (HUD) may have served to enhance the quality of manufactured homes. Homebuyers are quite willing to apply for mortgages for this highly affordable quality of housing. Here are the key guiding principles put forward by the...

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