Bad credit refinancing » Interest Rates

Refinancing Your Mortgage – Changing Your Interest Rate

admin — Wed, 30 Jun 2010 11:25:24 +0000

The opportunity to change the interest rate on a loan is one of the most common reasons that people consider mortgage refinance. Interest rates are always changing, sometimes for the better, and during these times homeowners want to take advantage and pay off one loan in favor of another that has a better interest rate. This is a process that many people have been through and those people have been able to save hundreds or thousands of dollars over the course of their mortgage loan, effectively lowering their monthly payments.

Lowering Your Interest Rate

If your goal is to lower your interest rate on your loan, you might not have a difficult time doing this. Many people find after several years of owning a home that the interest rates have dropped and they could save a lot of money if they considered mortgage refinance now. You’ll hear a lot of different rules of thumb as to when you should refinance, but the fact of the matter is that if you can refinance and have your savings exceed the cost of the refinance you are probably making a good move.

It’s important when you are considering mortgage refinance to not get carried away by the thought of saving. Mortgage refinance is a great opportunity to lower your interest rate but when you are considering this you need to look at the math and make sure that you are actually saving. The trouble that a lot of people have is that they are willing to accept a one percent decrease in interest, and while this is better, when you figure out how much you are paying in closing costs you might not end up any better for the refinance.

When you are serious about mortgage refinance you want to shop around and get the best deal for you. There are a lot of different loan programs out there for you to take advantage of and you should compare them all to see how much you really can save. Lowering your interest rate can do wonders for your monthly payment, but only if you go about it the right way. This is when it pays to educate yourself about how refinancing works and to work with a mortgage lender that you know you can trust to help you choose the best option for you.

Doing the math is important when you are trying to lower your interest rate because there are costs associated with refinancing and sometimes the costs do exceed the savings. This is why many experts recommend only refinancing when you are making a big change in your interest rate because that is how you are going to save the most amount of money. Even if you think that you are going to save a lot, you should always do the math to be sure that the savings are what you thought that they would be. You should always defer to the numbers before you accept any deal because when you look at the numbers you might be surprised at what the actual savings are. If you find that it doesn’t make sense to go through with the mortgage refinance, don’t do it, wait until rates drop further or you can get a better deal.

By: Robert Melkonyan

125% Loan to Value and Mortgage Refinance

admin — Sun, 13 Jun 2010 07:02:40 +0000

Did you know that 125% loan to value and mortgage refinance are extremely risky for borrowers?

Well, they are! That’s why you better think twice before jumping into an exotic 125% loan to value (LTV) second mortgage that allows you to refinance by borrowing more than your home is worth.

It sounds too good to be true, and it is. That’s why the Federal Trade Commission warns, “Borrowers Beware!”

Too many unscrupulous lenders use 125% loan to value and mortgage refinance to prey on vulnerable homeowners. Even though LTVs opens a door for lots of people to borrow, especially young couples with limited income and often shaky credit, this type of loan comes with a high price.

Interest rates are much higher and closing costs often add up to more than 10% of the loan balance. There have actually been stories of interest rates as high as 30% and hidden fees of 20 points or more.

LTVs are costly because, since there’s no collateral and no way for the lender to foreclose, LTVs are also risky for lenders. So, they make you pay through the nose for the privilege of borrowing.

This high income potential attracts unscrupulous lenders and debt consolidation “advisors,” high pressure home improvement salespeople and so-called foreclosure “rescue” companies willing to take a gamble on the risk of default in return for the huge profits they can make at the borrower’s expense.

They persuade vulnerable homeowners, often people with lower income, high credit card debt or poor credit, into believing that 125% loan to value and mortgage refinance are in their best interest. And they make an offer that sounds too good to refuse, with very attractive, extremely low monthly interest-only payments. But the offer comes with a huge burden.

Somewhere down the line, usually a lot sooner than you anticipate, you’re going to have to come up with a bundle of money to pay a big balloon payment. By the way, did you know that if you have to move for any reason, you can’t sell your home without first paying off your balloon loan? And where are you going to raise the money, since you owe more than your home is worth?

Think about it! When the balloon comes due, if you can’t raise enough quick cash in time or refinance at a cost you can afford, your balloon bursts and you’re in a lot of trouble with no way out. And balloons are bursting all the time. They’re one of the main reasons mortgage defaults and foreclosures are approaching record breaking highs all across the country.

Too many people got themselves suckered into exotic 125% loan to value and mortgage refinance loans with risky balloon payments. And now they’re paying the price.

LTVs are not for the desperate already drowning in debt, no matter how seductive they may seem. So before jumping into one, always do your homework and carefully consider all your alternative options.

And, by all means, work only with reputable lenders you know you can trust. And never let yourself be conned into some deal that’s only going to get you deeper into debt. It’s not worth it!

By: Jack Tanner

VA Streamline Refinance Has Hidden Benefits

admin — Thu, 10 Jun 2010 18:49:12 +0000

Very few veterans know about the benefits of a VA Streamline mortgage refinance. There are a few benefits that are hidden to vets. One of the biggest is that with a VA Streamline refi there are no credit qualifications! You can have multiple late payments and collections on all types of credit and still qualify. The only exceptions to that are judgements and liens that are attached to the property. they would have to be paid through the refi but you can still move forward with the refinance. This is a huge benefit to veterans who may have had credit problems and would other wise have to choose a sub-prime mortgage in a refinance transaction.

Knowing this one fact can save you thousands on your mortgage over the life of the loan and hundreds of dollars per month. sub-prime mortgages also generally have an adjustable aspect to the interest rate so it is much better to use VA benefits to get into a fixed rate va loan at a much lower interest rate. Interest rates on VA loans can be as much as 8% lower than than rates on sub-prime mortgages.

The only credit qualifications involved with a VA Streamline Refinance are that you cannot have more than one 30 day plus late payment on the mortgage in the most recent 12 months. That is it!! These are very easy loans to complete and the majority of veterans qualify. Even if you have had a foreclosure on a different property six months ago you can still qualify.

To learn more about VA Streamline Refinance loans, please feel free to visit:

By: Chad Childress

Should I Really Refinance, What Are The Benefits To Refinancing

admin — Thu, 27 May 2010 03:38:40 +0000

1. When can it be a Mistake to Re-Finance?

Most homeowners usually will make the mistake of thinking that re-financing is always a good option. But, this is not absolutely the case and homeowners can truthfully make a huge financial blunder by re-financing at the very wrong time. There are a couple of good examples of when re-financing could be a bad mistake. This usually happens when the homeowner does not stay in the home long enough to get back the cost of re-financing or when you as the homeowner has had something happen to your credit score which in return has dropped since your first mortgage loan. Another example is when the interest rate has gone down enough to offset your closing costs related with your new re-financing.

2. Getting back those expensive Closing Costs.

If your undecided whether or not you should be refinancing, and while the homeowner should be determining how long they plan to keep the property to recover the closing costs. This is very important especially in the case where the homeowner plans on selling the property in the not so distant future. There are calculators for refinancing easily available that will provide you the homeowners with the amount of time you will have to keep your property to make the refinancing worth your while. These refinancing calculators require you the homeowner to put in the balance of your existing mortgage balance, your current interest rate and the newest interest rate and the calculator will give you back results that compare your monthly payments on your old mortgage and on the new mortgage and also gives you information about the amount of time thats going to require for you the homeowner to recover your closing costs.

3. When You or your Spouses Credit Scores Drop, How does it effect you.

Many, many homeowners believe that falling interest rates should immediately tell you that it is time you should refinance your home. But, when these interest rates are put together with a fall in the credit score for you the homeowner, this can result in the refinanced mortgage being less favorable to you the homeowner. You the homeowner should carefully consider their credit score right now in comparison to the credit score at the time of your original mortgage. This all depends on the amount interest rates have dropped, you the homeowner will probably still benefit from refinancing even with a credit score thats lower, but it is not usually likely.Many homeowners will take complete advantage of free refinancing quotes to get an approximate learning of whether or not they can get some benefits from re-financing.

4. Have the Interest Rates Stopped Dropping Yet?

One of the biggest mistake homeowners will often make when they decide to refinance is refinancing always when there is a big drop in the interest rates. This usually but not always can be a mistake because you the homeowner must first with careful consideration whether or not the interest rate has fallen enough to really see the big cost savings for you the homeowners.Many homeowners often make this error because they forget to take into consideration the closing costs involved with refinancing your home. These costs may also include fees such as application fees, origination fees, appraisal fees and a few of the other closing costs. These costs will add up very quickly and may dig into your savings that was generated by the lower interest rates. There are many times that the closing costs may even be larger than the savings coming from the lower interest rates.

5. Many Times Re-Financing Can Be helpful Even When It is a “Mistake” But will benefit you at the moment.

In todays world refinancing will not always be the right choice, but many homeowners may still decide on refinancing even when it is absolutely a mistake to do. This very best example of this type of situation is when you the homeowner refinances to get the benefit of lower interest rates, even when the homeowner will end up paying more in the end for this refinancing choice.As this may happen when either the interest rates lower slightly but not enough to give an overall savings or when a homeowner consolidates other loan amount of short term debt into your long term mortgage refinancing situation. But you’ll find most financial advisors may try to sway you against this type of financial choice to refinancing, many homeowners will sometimes go against the right decision to make a change which may improve their monthly cash flow by lowering their monthly mortgage payments. In this case the homeowner is making the best possible choice for there personal needs and wants. They may need extra money for a child going to college, a new car what ever the need they have found a way that works for them personally.You may just pay a little more to free up some cash.

By: Greg Wadel

Home Refinancing Rates – How to Secure the Lowest Refinancing Rates

admin — Thu, 20 May 2010 18:08:41 +0000

When refinancing your home, you obviously want to secure a lower interest rate than the one attached to your current loan. However, many people make the mistake of not preparing ahead of time before applying for a refinance mortgage loan. In order to secure the lowest home refinancing rates, you should make sure of a few things before applying.

1) Be patient. There are major delays in refinancing loans right now. Many homeowners are applying for refi loans and the lenders are very backed up. Some loans can take as long as six months to go through. Be patient, and don’t get bothered by minor increases in the current rates because once your refi goes through, your rate will most likely be significantly lower than the rate on your old loan.

2) Credit score. Good or even great credit is no longer enough to secure the best home refinancing rates. Today, you need stellar credit. A score of 720 or higher should be good enough to get you the best rates. Check your score constantly and make sure you take all the necessary steps to get and keep your credit score over the 720 mark. Pay down your credit card balances and pay off other loans if possible. Hiring a credit counselor may not be a bad investment if you need the help.

3) You will not be offered the lowest home refinancing interest rates unless you have good equity in your home. You need at least 20% equity. If you don’t have it yet, consider making a large payment to get your balance down low enough to get it. Of course, you need to weigh the loss of liquid assets against the advantages of the low interest rate to decide if this is a good idea financially.

By: Jennifer Lynn Hanson

How To Qualify For Lower Home Mortgage Refinance Rate

admin — Thu, 13 May 2010 08:27:19 +0000

Refinancing offers a wide range of benefits, but the only way to enjoy all these advantages is to qualify for a low home mortgage refinance rate. It is true that you can secure a fixed mortgage by refinancing a home, but if you are paying a higher interest, it will substantially increase your monthly bills. On the other hand, a low rate will save you hundreds of dollars every month. Following are some of the tips that you may find very handy while you are negotiating with your lending company to lower the interest rates.

Your Existing Lending Company

When it comes to refinancing, your existing lender is perhaps your best hope. In order to negotiate a better refinance deal with them, it is very important for you to establish a good payment record with them. When you apply for refinancing, the first thing that the lenders do is that they review your payment record and credit history. If you have not made any default in your existing mortgage and your credit score is also healthy enough, there is no reason why the lending company should not consider your application for a lower home mortgage refinance rate. Always remember that defaulters are considered as risky applicants. In such cases, your application will either be denied or accepted with a high rate offer. The higher rate in refinancing kills the basic objective. Your objective is to save money by opting for refinancing, but the higher rates may not allow you to save a single penny. Instead, you may even end up paying an overall higher amount over the course of the loan. Therefore, if you plan to opt for refinancing at a later stage, you must make all your payments in time. Reducing the unnecessary debts will also maximize your chances of approval for a lower home mortgage refinance rate.

Comparison – Shopping

Keeping in view the large number of lenders available in the market, it always pays to do a thorough comparison-shopping. You are recommended not to go for the first offer no matter how lucrative it sounds. It is always better to get free quotes from some of the short listed lending companies. Comparing the different offers will help you make an informed decision, and you will be able to choose the best deal. Comparison-shopping will also give you the power to choose the loan package with the lowest refinancing rate.

Last, but not the least, getting the lowest home mortgage refinance rate is all about taking the right step at the right time.

By: Saurabh K Jain

California Property Refinancing

admin — Thu, 06 May 2010 17:51:59 +0000

A mortgage is usually a kind of loan taken for buying property, and the repayment is spread over a long term. Mortgages can be applied for through various financial institutions such as banks, private lenders, or property sellers. California mortgages are different from mortgages anywhere else, in that it is necessary to insure them against earthquakes and floods. Refinancing means replacing the existing mortgage with another one at lower interest rates. Refinancing a property is a good option for homeowners who had purchased the property when interest rates were high. Refinancing a property in California is usually a good way to save money.

Borrowers who find it difficult to meet their repayment obligations due to financial constraints opt for refinancing their property. Refinancing the property usually offers lower interest rates, as well as some cash in hand. Therefore, it is also a preferable option for borrowers who want to lower their interest rates even though they are able to make their payments comfortably.

Property refinancing in California is usually an easy affair, and it can be acquired to close either the first or second mortgages taken on a property. However, chances are that the closing cost of the existing loans could be considerable, and might run into thousands of dollars. Therefore, before opting for a refinancing of the property, borrowers must always include the closing cost in their calculations. Refinancing will lose its benefits if the cost incurred to acquire it is as much as or exceeds the existing loan.

Most refinancing companies offer free quotes for property refinancing on the Internet. A few websites offer multiple quotes from various lenders for the purpose of comparison. This gives borrowers a chance to choose a rate that suits their needs and presents a fair idea of rates available. This also enables them to consider their decision to refinancing or seek other avenues.

By: Elizabeth Morgan

Refinance 2nd Mortgage

admin — Wed, 28 Apr 2010 22:40:40 +0000

The idea of refinancing your second mortgage is undoubtedly attractive – if you can pay off your present 2nd mortgage by obtaining another with better terms. But beware – refinancing your 2nd mortgage is only advisable under some situations. Study the prevailing interest rates and determine whether they are conducive to refinancing. Are the effective interest rates lower now than when you obtained your second mortgage? If so, then refinancing makes sense.

Refinancing can be tricky, so be prepared to do careful math before you decide. Take into consideration the length of time it will take you to pay off your home, and how much you will be paying (in total) over the years if you stick with your present 2nd mortgage or decide to refinance.

Before you refinance, be sure to properly educate yourself about the advantages and disadvantages of refinancing your 2nd mortgage. Refinancing has the power to put you in a better place if you use it properly, but can also yield catastrophic results when poorly timed. Such catastrophic results include ending up paying higher rates, having longer re-payment periods, a change in heart that could lead to yet a third refinance, or even the worst: foreclosure. Nobody wants that, but foreclosure occurs every day as a result of people being unable to keep up with payments.

Consult a trusted mortgage-lending expert before making your decision. If your current finance situation does not absolutely require you to refinance or get a second mortgage, then do not refinance. Stay the course and wait until you are sure before you change course.

By: Kristy Annely

Refinance vs Home Equity Loan

admin — Wed, 14 Apr 2010 08:14:42 +0000

If you find yourself in need of a large sum of money for some reason, you may be considering using the equity in your home by either doing a cash-out refinance or getting a home equity loan in order to gain access to the money you need.

With the federal government beginning to slowly lower interest rates, you may be wondering if you should do a cash-out refinance in order to get that lower interest rate as well as gain access to the money you have in equity. This may be a tempting situation, but a lower interest rate is only one of the things that you should take into consideration.

When you refinance your home, you are taking out an entirely new mortgage. You use this new mortgage in order to pay off your original mortgage. In the case of a cash-out refinance, you borrow more on your home than the original mortgage balance, using your equity as collateral. You can then use the money left over after the refinance is completed to do anything you’d like. You can pay off credit cards, take a vacation, make home improvements, etc.

There are drawbacks to cash-out refinancing. First of all, your mortgage balance will be bigger and will most likely be extending your loan term. Mortgages are written with either 15 year or 30 year terms. If you only have 8 years before you pay off your mortgage, refinancing to even a 15 year mortgage is nearly doubling your loan term.

There are also considerable fees involved when you refinance. It would be worth your time, and sometimes a great deal of money, to find the best deal on fees that you can find.

With a home equity loan you are using the equity in your home as collateral on a loan. Home equity loans can be for a set amount or you can get a home equity line of credit, which is an open-ended loan that can be used just as you would use a credit card, keeping in mind that when you use that line of credit, you are using the equity in your home.

Home equity loans are easier to get than a refinance, especially if you have bad credit. The interest rate is also usually lower than a refinance, and the payments sometimes qualify as being tax deductible.

No matter whether you choose a cash-out refinance or a home equity loan, be sure to do some research on the companies you are considering working with. The best way to choose a good company to work with is to ask your friends, family and coworkers for recommendations. Ask not only about the process itself, but about how they were treated by the people they were working with. Were they rushed into decisions, or did they feel that they were given good information so that they could make the final decisions themselves? Remember that you are the customer, and when you are taking a large amount of money out against your home, you shouldn’t be rushed into anything.

By: J Suffie

Four Steps to Acquire Bad Credit Home Refinance

admin — Wed, 31 Mar 2010 01:58:09 +0000

Are you looking for bad credit home refinance? If you are a person with poor credit points, then undoubtedly your answer must be yes for this question. But, now the question emerges. How to acquire these refinanced loans? Well, in this concern, you can take the assistance of guidelines mentioned below:

Step 1:

To begin with, it’s necessary for you to find out a financial institution that can refinance your present loan and that too at comparatively lower interest rates. It is so because if the interest rates are equivalent or higher than your current loan, then undoubtedly you are going to worsen your credit sheet. So, what should you do in order to find out such a lender? Simple, just follow the principle of research and find out a list of good lenders with their offers.

Step 2:

Once you have obtained a deal that is best according to your requirements, it’s time to fulfill document related formalities. The process is quite identical to purchasing a new home, so you must be ready with the evidence of your income, credit sheet etc. Although your credit history doesn’t means a lot in such sort of refinancing, but it plays a vital role in determining the interest rate for you.

Step 3:

When all the formalities are over, it’s time for you to evaluate out of the pocket expenditures such as closing costs and pre-payment penalties etc. Now, you must be wondering why it is so? Well, home refinancing allows you to save a few of bucks every month by means of reducing your interest rates. But if you are wasting thousands of bucks in the process of refinancing, then it won’t be a prudent decision.

Step 4:

Now, when you have considered all the aspects thoroughly, you should go for signing the agreement with the lender. However, never forget to go through all the terms and conditions of the contract once again before you sign it.

Following all of these steps, you can easily attain bad credit home refinance and that too at mere interest rates.

By: Alan Lim