Bad credit refinancing » Adjustable Rate Mortgage

Benefits of Refinancing Your Home Today

admin — Sun, 27 Jun 2010 15:18:24 +0000

By refinancing your existing mortgage or home loan, you can qualify for a better rate or more flexible terms. During refinancing, you can also cash out the equity that you have built up in your home. This money can be used for things like home improvements and repair.

There has never been a better time than today to refinance your existing home loan or mortgage. The best deals on mortgage refinancing can be found online via the Internet

The Internet has become the premier source for mortgage refinancing for a multitude of reasons. Number one among those is that increased online competition between lenders has the end result of getting you the lowest rate to be found on your new mortgage.

Online lenders also have a speedier application and approval process because everything concerning the new mortgage is filled out electronically on a secure server. There is also a significant convenience in the online mortgage that the traditional mortgage can not offer – you can fill out your application online 24 hours a day, when you have time, not during regular banking hours.

Online Mortgage Lending Specialists

What is more, these specialists in mortgage lending online have the expertise that is backed up by years of successful business. They know how to get you the best rate with payments that are easily agreeable with your budget or income. They want you to succeed, and have great customer support to help you do just that.

Many homeowners find that the interest rate they are paying on their current mortgage is not reflective of their elevated credit status. If your credit has approved within the years that you have been paying on your home, you may now qualify for a better rate that reflects your responsible credit pattern. By refinancing, you can qualify for a rate that will allow you to pay your home off sooner for less.

If you signed on during the adjustable rate mortgage boom, chances are that your house payment may be getting out of hand. Multitudes of homeowners are now paying up to double the amount each month that they were paying just seven or eight years ago. Because their income failed to keep up with this payment increase, some of these homeowners have, unfortunately, fallen victim to foreclosure or bankruptcy. Refinancing your adjustable rate mortgage with a new, fixed rate loan will not only save you untold money on interest charges, but also give you a payment that is dependable and works well with your income.

Cash Out Equity

When you refinance your home, you can cash out equity that you have built up over years of payment. Borrowers can use this equity for whatever they need. Home improvements, remodeling, adding a fourth bedroom, additional bath, new floors, roofing, building a new garage or carport, installing a pool or sauna, or numerous other things that make your home more valuable. For every dollar that you invest by improving your home, you can expect to double that investment should you ever put your house on the market.

By: Kate Ross

Pros and Cons of Refinancing

admin — Mon, 21 Jun 2010 16:06:33 +0000

After spending a lot of time struggling against mortgages, credit card debts, and many other types of loans, one now can simply overcome all of these obstacles and threats using refinancing, the process of paying off one loan with the proceeds from a new loan secured by the same property. What we are going to tackle in this article is the Pros and Cons of Refinancing.

Refinancing can be considered a means with which a person replaces his/her current loan with a new loan in order to save money. The loan can be of any type. It can be any consumer debt or a credit card debt or a mortgage.

Many people shelter to refinancing nowadays because it has many pros:

As it helps people to reduce interests, risk, and periodic payment obligations by either lowering the interest rate owed on the loan or extending the period of loan. Also everyone looks for refinancing in order to be able to achieve equity faster.

There are too many individuals who are “house rich and cash poor.” What value is it if your house is paid off in full, but you do not have any liquid cash to support? Keep in mind that your house will no doubt appreciate over the next few years. It will do so whether or not you have a large or a small mortgage. The more equity you have in your house will put more money in your pocket when you sell it, but while you are living in the house it is only “dead equity.”

In essence refinancing can be used to transform available equity in one’s house into ready cash, available for other purposes or expenses.

Refinancing an adjustable-rate mortgage into a fixed-rate one, ensures a steady interest rate over time, by removing the risk that interest rate might increase terribly.

As no one is perfect, also there is not good thing without some risks and cons:

Lenders sometimes offer no-cost refinancing, charging you zero points for your mortgage loan. Generally, you will pay a higher interest rate than on an otherwise comparable mortgage with points, and you’ll still have to pay the other costs associated with the loan. there are also closing and transaction fees typically associated with refinancing a loan or mortgage. In some cases, these fees may outweigh any savings generated through refinancing the loan itself.

Some sub prime lenders charge excessively high fees, but you can screen these out by comparing mortgage rates.

All you need is to determine the goal behind seeking a refinancing, collecting information about several lenders options and then work on your refinancing.

Finally it became apparent that refinancing, as having lots of advantages it also has disadvantages and risks. You should pay great attention that some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan, depending on the type of loan used to refinance the existing debt.

So you have to be careful and Calculate the up-front, ongoing, and potentially variable costs of refinancing while making a decision on whether or not to refinance and you have to Check your mortgage agreement to see whether it contains a prepayment penalty, and try to avoid prepayment penalties in any refinanced mortgages.

By: Mahmoud Awara

California Refinance Loans – Refinancing Tips to Help You Save

admin — Mon, 14 Jun 2010 18:04:49 +0000

Many homeowners in California are scrambling to refinance their current home loan before interest rates get too high. Some are hoping that a California refinance loan will help them get rid of their adjustable rate or interest only loan. Others are hoping to move from a high fixed rate into a low adjustable rate or hybrid loan. If you are considering a California refinance loan, here are several refinancing tips to help you save:

Refinancing to a Fixed Rate Mortgage

California refinance loans with fixed interest rates can be very beneficial to homeowners who have found themselves in trouble due to a hike in the rates of their adjustable rate mortgage or interest only loan. Refinancing is also beneficial for those who got their current fixed rate loan when interest rates were high due to bad timing or credit problems.

Refinancing to an Adjustable Rate Mortgage

Fixed rate loans are great for those who like consistent payments, but for California homeowners who don’t plan to stay in their home for much longer or for those who need an instant drop in their payments, an adjustable rate California refinance loan may be the best option. This type of refinance loan allows you to take advantage of low introductory rates. If you have fair to good credit, you could get an interest rate as low as 5 percent on a California refinance loan.

Refinancing to a Hybrid Mortgage

A hybrid loan offers the best of both worlds. With this type of California refinance loan, you can take advantage of low adjustable rates during the first five to ten years of your loan before moving to a more consistent fixed rate. You will want to be careful though, not every hybrid loan has the same terms.

By: J. Hale

How Soon Can I Refinance a Mortgage?

admin — Thu, 10 Jun 2010 01:40:40 +0000

How soon can I refinance a mortgage is a question asked by many people looking for mortgage refinance options. However, before we take up your question, it is pertinent to understand what is refinance mortgage and how it is going to benefit you. You may be looking for opportunities to optimize your monthly payments by eyeing on the various refinancing mortgage options available for your mortgage plan.

You might be wishing to change over from the fixed rate home loan or vice versa. The change depends upon the interest rate. You may also be wishing to go in for cash out refinance mortgage options that allows the payment of all the old loans and allows for the new ones at the same time.

Before you are allowed to refinance a mortgage, lenders will give a careful look into your current balance, your monthly balance and the period left for the payments and then decide how best to help you. To get the best deal, advice of a mortgage consultant would be of a great help because they are the best person to offer you the right tips to refinance a mortgage.

Meaning of Refinance Mortgage

Refinance mortgage mean different things to different people. Mortgage refinancing could mean combining the first and second mortgages into a single mortgage. You may wish to increase the duration of repayment say from 15 to 30 years. You may be having extra cash at some point of time prompting you to shortening the loan duration. You may be wishing to change over from adjustable rate mortgage to a fixed rate mortgage with lower interest rate.

You may also be wishing to consolidate other debts and paying them off by refinancing a mortgage. All the options for their worth will have to analyzed to derive the maximum benefits from refinancing mortgage. You have to decide when to start the refinance. A word of caution, make sure you are not saddled with hidden costs while changing over. Advice of a mortgage consultant and adherence to the tips to refinance a mortgage should be of a great help to you for this critical decision.

Facts about Refinancing Mortgage

Before you go in for refinancing a mortgage it is always advisable to consult a mortgage consultant to learn about how much reduction will be there in the monthly payments on the reduced interest rate. The rate you are likely to get for mortgage refinance will depend upon the size of the loan, your credit score, type of lock in rate or you want it float, the closing time and the market conditions.

Beware of the best possible advertised mortgage rates because these are made only to the first few applicants. You are the best judge to know what is best mortgage refinance option for you in the long run.

By: Al Falaq Arsendatama

How to Lower Your Mortgage Payment by Refinancing

admin — Wed, 09 Jun 2010 13:11:43 +0000

As the US economy slows and many experts are predicting a recession, many homeowners are looking for ways of easing the strain on their monthly budgets. Refinancing your mortgage to get a lower payment is an excellent way to free up cash in your budget with a lower payment if you go about it correctly. Here are several tips to help you refinance your mortgage and get a lower monthly payment without paying too much in the process.

If you purchased your home with an Adjustable Rate Mortgage that is due to reset soon and you are concerned that you’ll no longer be able to afford your payments when your lender adjusts the loan, refinancing could give you the peace of mind you need while freeing up hundreds of dollars in your budget, but what about the risks?

Refinancing with a lower monthly payment will save you money in the short term but you may pay more in finance charges if you lower your payment by extending the loan’s term. You’ll also be paying down the mortgage’s balance at a much slower rate with the lower payment amount.

Two Methods for Lowering Your Payment

There are two ways of lowering your monthly mortgage payment that can be used together. The first method of lowering your mortgage payment when refinancing is by extending the term length of your new loan. Term length is simply the amount of time you have to repay the loan. The most common term lengths when refinancing your mortgage are fifteen and thirty years; however, there are now forty and even fifty year mortgages to choose from. To illustrate how extending your term length lowers your payments consider the following example.

Suppose you are refinancing your mortgage for $100,000 at a 6.25% mortgage rate. You are considering two term lengths: 15 and 20 years. With a 15 year term length your payment will $857 and you’ll pay a total of $154,300 over the duration of your mortgage. By extending the term length to 20 years your payment will go down to $730 per month; however, you’ll pay a total of $175,400 for the same loan.

The second method of lowering your mortgage payment is by refinancing with a lower mortgage rate. This has the added advantage of paying less for your financing over the duration of your loan. These two methods can be combined to further reduce your monthly payment; however, whenever you extend the loan term you will pay more over the life of the new mortgage. You can learn more about your refinancing options, including expensive pitfalls to avoid by registering for a free mortgage video tutorial.

By: Louie Latour

Should I Refinance My Mortgage Loan Now?

admin — Sun, 06 Jun 2010 05:24:10 +0000

You’ve probably heard a lot about mortgage refinancing on the news lately. In fact, if you’re a homeowner you’ve probably received a few offers in the mail from lenders as well.

The reason you hear so much about this topic lately has a lot to do with the mortgage / foreclosure crisis we are seeing right now. Many homeowners are in situations similar to those they have heard about on the news, having an adjustable rate mortgage set to adjust in the near future … and facing a possible spike in mortgage payments as a result. So, these homeowners naturally look into refinancing as a way to avoid such payment hikes.

The question is — when should you refinance your mortgage loan, and when should you avoid it? This question is high on the list of many homeowners, so I will do my best to shed some light on the subject.

When Refinancing Makes Sense

There are some general rules you can use to determine whether or not a refi makes sense for your situation. Bear in mind, however, that these are just general rules of thumb. So don’t make any financial decisions based on these “rules” alone. Do some further research into the subject and seek the advice of a financial professional.

With that being said, here’s a basic guide on when to refinance a home loan, from a financial standpoint:

Switching from an ARM to a fixed rate — This is a common reason why homeowners pursue a refi in the first place, especially with all the negative press the adjustable rate mortgage (ARM) loan has been getting lately. Eventually, an ARM will adjust to a higher interest rate that catches a lot of homeowners off guard. So many people use refinancing as a way to move to a more predictable fixed-rate mortgage. Capitalizing on Lower Interest Rates — This is another common reason why people refinance their home loans. When the rates are low, homeowners in certain situations can refi to a lower interest rate, and thus reduce their overall monthly mortgage payment.

The goal of both of these strategies is the same … to either (A) lower the interest rate on the loan, or (B) prevent the interest rate from rising through a mortgage adjustment. In both cases, the goal is to pay less money each month on the mortgage payment.

It’s Not Always a Good Idea

Now is a good time to point out that a mortgage refi is not always a good idea. And I can illustrate this through another rule of thumb: If the money you pay to refinance the loan (closing costs) exceeds the amount of money you save over the term of the new loan (lower interest rates), then it doesn’t make sense to pursue it. After all, nobody wants to pay more than they save in a financial transaction.

The key here is to do the proper research to find out what you would pay, as well as what you would save by refinancing. Once you’ve determined those numbers, you will have a much easier time deciding if a refi is right for you.

By: Brandon Cornett

FHA Refinance – Bad Credit Score Mortgage Relief

admin — Sat, 01 May 2010 04:06:03 +0000

If your ARM ( Adjustable Rate Mortgage) is resetting, you are no doubt feeling the anxiety creep in knowing the fixed portion of your payment will be ending soon. This is quite understandable knowing that once rate reset s your monthly mortgage payment can jump hundreds of dollars, literally overnight.

You may have signed up for an ARM without knowing exactly how they work; the broker may not have explained terms like “Index” and “Margin” and “Libor”… components on which your new interest rate will be determined, no doubt adjusting to a higher rate.

It’s quite possible that your interest rate could reset 1 or 2 points higher in which case you would be paying a lot more per month.

Here’s a hypothetical but very common scenario…

You originally borrowed $250,000 on a 3 year ARM at 5.5% your monthly payment was $1419 (PITI).

At the end of the fixed period (36 payments) you will owe $239,716. Now you’ll need to refinance this balance – if you let the ARM reset it could easily increase tour interest rate by 2 points to 7.5%, which puts your monthly payment at $1673.

This is an increase of $254 per month to get out of that ARM and into a 30 year fixed rate mortgage! No wonder foreclosures are on the rise.

You need to consider refinancing your ARM into a 30 year FHA fixed loan.

The advantage of this program is:

- You don’t need perfect credit – No minimum FICO score
- Your credit trend is more important than your FICO score
- Foreclosure and bankruptcy won’t disqualify you
- Interest rates can be closer to what an “A ” credit borrower would qualify for
- Steady payment over 30 years.
- Can refinance up to 97% of appraised value of the home.

The brutal truth is that an FHA loan makes great sense and may very well be the only loan that will enable you to “keep your home” when faced with a resetting ARM.

By: Leslie Collins

To Refinance or not to Refinance – Here is the Answer

admin — Fri, 30 Apr 2010 13:24:53 +0000

I have written many articles on refinancing a fixed rate mortgage to an adjustable rate mortgage. I have helped people cut as much as $800 off their monthly payments by turning their high fixed rate mortgage loan into a much lower ARM. This may be the time, however, to put the strategy in reverse, especially if your adjustable rate mortgage is coming up on the adjustment period.

If you have an adjustable rate mortgage in the four to five percent range, and it is about to adjust, and if you think you’ll be in the home for more than five additional years, you’ll want to strongly consider refinancing your adjustable rate mortgage to a fixed rate mortgage. Here’s why.

Rates continue to remain very low. Fixed rate mortgages in the five to six percent range are very good loans. So, if you have an ARM at five percent, and it could possibly balloon to six or seven percent, now is the time to fix that rate at between five and six percent. Remember, if you intend to remain in your current residence for more than five years, fixing that rate is a very wise move.

This way, you will keep your payment low for the life of your loan, and you will eliminate the worry of an adjustment. This is not to say that adjustable rate mortgages are bad loans. Some are very good and, in many cases, better than a fixed loan. Just be sure to understand your own scenario. Let an expert like Direct Lending Solutions help you with your decision.

By: Mark Barnes

Should I Refinance My Mortgage? Take a Quick Quiz to Help You Decide

admin — Wed, 28 Apr 2010 23:47:52 +0000

As reported in the media recently, the values of homes continue to decline to lower levels than previous years and mortgage rates have dropped. This has made many homeowners ask themselves, “Should I refinance my mortgage or not?”

Under today’s conditions, the fact remains that those who do prepare for declining home values will reap big dividends. For example, if the value of your home declines below your current mortgage balance, you may not be able to refinance in the future. Keep in mind that refinancing should put you in better financial position. There are many questions that you should ask yourself before considering to refinance. Take a quick quiz to help you decide if now is the right time to refinance.

The Refinancing Quiz
Would you like to lower your monthly payment? Are you interested in saving thousands of dollars in interest? Do you have debt to consolidation into 1 easy lower payment other than making many monthly payments? Do you have an adjustable rate mortgage or high rate fixed rate mortgage that you would like to change to a secure a low fixed rate? Would you like to opportunity to pay your loan off faster than the original 30yr., 20yr., or 15yr. term? Do you need to get cash from the equity of your home for improvements, college, or vacation?

Add up the number of times you answered YES to a question and see where you fall in the scoring guide below.

Refinance Scoring Guide

0-1 No. Put off refinancing to another time.

2-4 Maybe. Consider a mortgage analysis in the near future. Now might be a good time to refinance and put you in a better position.

4-6 Yes. Speak with a mortgage professional soon to review your loan options before interest rates change.

This should have given you a good idea if refinancing is a good option for you. If you scored between 2-6, consider a mortgage analysis from an experienced mortgage consultant. However, before you get started, a lender might want to charge you an upfront application fee before they review your credit. You might not even qualify for a loan at the time. If not, you might lose your application fee which can range from $300-$400 dollars. I recommend working with a mortgage professional that does not require an application fee before reviewing your credit report. Once you have picked a mortgage professional, now you are ready for your mortgage analysis.

A mortgage analysis is a very simple process and it only takes about 10 -15 minutes. The mortgage professional will ask you questions about residency, employment, income, assets along with reviewing your credit report. Shortly after, you should receive a customized proposal of your refinance loan options. Once you receive your results of the analysis, compare it with the results from your quiz above. At this time, you should have a better idea if refinancing is right for you. If you are still unsure, meet with your mortgage professional to explain your options further.

By: Chris Butcher

Kansas Refinance Loans – Kansas Refinance Rates

admin — Tue, 27 Apr 2010 17:24:23 +0000

Like interest rates everywhere, the mortgage interest rates in Kansas are constantly on the move. If you have a Kansas mortgage loan and you are thinking about refinancing, learning everything you can about Kansas refinance rates will be to your benefit.

Adjustable Rates

Approximately half of the new mortgage loans in Kansas are adjustable rate mortgages (ARMs). This financing option is very popular because it allows borrowers to take advantage of low introductory rates, and in turn, lower monthly mortgage payments. When average interest rates drop, the rates on your mortgage follow suit. The bad part about ARMs is that average rates are constantly fluctuating. While payments may be low in the beginning, they can easily rise out of control within a few years. Current 5/1 ARM rates in Kansas average 5.67 percent.

Fixed Rates

If an adjustable rate mortgage sounds too risky to you, you also have the option of refinancing to a more dependable fixed rate mortgage. Fixed rates are normally a little higher than adjustable rates, but they are beneficial because the rate remains steady through the life of your loan. Regardless of what average rates are doing, your mortgage rate will never change and neither will your monthly payments. Current fixed rates on 30 year Kansas mortgage loans average 5.94 percent.

Getting a Good Refinance Rate

One of the main reasons to take out a Kansas refinance loan is to get a low interest rate. If you want to get the best deal and the best rates on your refinance, you will need to do some comparison shopping. Try to get quotes from several different lenders before making any refinance decisions. Whenever possible, compare ARM rates with other ARM rates and fixed rates with other fixed rates.

By: Jane A. Hale