Refinance..what is it?
Refinancing is the process of replacing the mortgage that you already have on your home or commercial property. There can be different reasons to refinance—it can be for getting the advantage of current lower interest rates, reducing your monthly payments, or taking the cash out from the refinance for the purpose of remodeling or improving the existing property or buying another one.
How Does Refinancing Work?
To refinance your mortgage, your best choice should be to contact a mortgage broker —just like Fast Fund Mortgage at www.fastfund2purchase.com.
We can analyze your current mortgage payment with the new mortgage plan and payment. We will go through the entire process with you to make you understand the details so you make a wise decision. We can also shop for the best plan and interest rates by shopping various nationwide lenders that we’re already working with.
To make sure that you qualify for the refinance loan, you must go through some of the fundamentals:
Your current mortgage is in good standing: Lenders need to see the paperwork to make sure that you’ve maintained your current loan in good standing and that there are no missed or late payments for at least a year.
Equity: Although it’s important and good to have at least 10 to 20 percent equity, but nowadays there are loan programs where you can get your home refinanced even if you have much lesser equity. These refinance loans are just for rate and term adjustment. No cash out.
Income: For lenders it’s important that you will be able to repay your loan without any problem and for that, you will have to prove that you have a regular income by producing the evidence. In addition to that, lenders will also look at your debt-to-income (DTI) ratio. This is just to make sure that you have absolutely no problems repaying your loan.
Credit Scores: This is a big one. Each lender has their minimum credit score requirements. Some will approve you with lower scores and some may require little higher as the minimum threshold. Although you may get approved with a lower credit score, but you interest rates will go higher.
When To Refinance
It can be due to any reason. Usually, people refinance to reduce their monthly mortgage payment. However, we have seen the mortgage payments go even higher than the previous ones just because the borrowers pulled out extra cash out of their equity. So again, refinancing your mortgage is nothing but your own situation. As long as you’re qualified based on your income and expense ratio set by the loan program, you’re good to go and refinance your mortgage.
Cost To Refinance?
It depends on the lender, location of your home, and the loan amount. Typically we have seen the closing costs for a refinance loan run between the range of 2% to 5% of the loan amount. So, a $100,000 loan can cost you between $2,000.00 to $5,000.00 in closing costs. Most of the times, these costs are compensated by lender credits also which ultimately reduce the loan closing costs.
Ready To Refinance?
Due to any reason, if you think that refinancing your mortgage will make sense to you, then you should go for it. We at Fast Fund Mortgage in Yorba Linda, CA can help you set up in the quickest time for your refinance loan. Just give us a call or fill up the short form TODAY that we provided here on this page.