Silent Kninja asked:


A few years ago, I had a mortgage with Bank A. The rates went way down so I refinanced with Bank B at a lower rate AND a shorter term (went from 30 year to 15 year.) Why would Bank B want to offer me something like that? What is in it for them? Please advise. Thank you!

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Robert Langdon asked:


Your home value has substantially gone up over the years. This means that your home has great amounts accumulated in it as equity. It is this equity that you would like to explore for meeting expenses towards variety of purposes. But how do you do it? Well, one beneficial way is to go for cash out refinance mortgage loan.

Before taking the loan you must be well aware of its aspects. Cash out refinancing is all about refinancing your current mortgage with the intention of borrowing more amounts than what you owe as balance payments towards the mortgage. Clearly, then you have a difference of sum which is a cash out for you. You can use this extra greater money for which ever purpose you want.

A homeowner can use cash out refinance for variety of purposes like home improvements, debt consolidation, for avoiding high rate credit cards, pay bills or for investments. These loans provide homeowners with greater monetary help in dire situations.

As has been mentioned, in taking Cash Out Refinance Mortgage Loan you are in fact using greater equity build-up in your home. There are two ways that you can do so. First is to take a second mortgage like home equity line of credit or you can refinance whole of existing mortgage plus desired amounts as cash. Before you go for cash out refinance you should first find out as to which way of the refinancing is best suited for you.

It is advisable to first take a good look at the prevailing interest rates. In case the rates are low then you can go for refinancing the entire mortgage. You should be consolidating old mortgage and cash out. However when the market rates are not that lower when you intend to go for cash out then it would be wise to let fist mortgage remain untouched. Instead add second mortgage to it so that interest rate and terms of the first one are not affected at all.

You should be careful in searching for cash out refinance mortgage loan. Interest rates on refinancing and closing costs are some of the aspects that you must look into when shopping for right deal.



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Rony Walker asked:


Taking out a second mortgage may sound easy since you’ve gone through the steps during the first mortgage. Still, people make mistakes with their refinance mortgage. Whatever their options, people should always weigh their capacity to pay back the loan given their unique circumstances.

Is It Time For You to Get a Refinance Mortgage?

No matter what they are saying, like interests rates are lower making the time right for a refinance or something like that, take a hold of yourself. Ask yourself if it is the right time for you to take out a new loan and if you’ve got a very good reason to get one.

The common reasons for taking out refinance mortgage:

1. Debt consolidation

2. Building up home equity

3. Switching mortgage type

4. Big expenses

5. Relocation

6. Business investment

Getting a second loan for the sake of cash in your pocket is not a good reason to take out a loan. A one-time fling with cold cash going nowhere except down the drain will be a drag to pay back for another 15 years.

With the second loan, borrowers are just taking a new loan and putting up the same property for collateral. In a way, the new loan provides you the opportunity to make good use of this second break. All along, you must always bear in mind your financial capacity to pay back the loan.

Lenders weigh the risks. They also check out your credit score and review your performance with the previous loan. If you are decided to get a second loan, for good reason, evaluate the options offered by the lenders’.

Your Mortgage Refinance IQ

To avoid the usual mistakes people make, you should:

1. Know how much mortgage you can afford.

2. Study the going rates.

3. Compare these rates with the present one.

4. Shop around for lenders and compare offers.

5. Study the low rate offered.

6. Add up all the fees you’ll be paying.

7. Ask the company if they charge for early loan payment.

The success of your mortgage refinance depends on the choice of mortgage type to suit your circumstances.

The Two Types of Mortgages

With your second mortgage, you will again have to make a choice between a fixed rate mortgage and flexible rate mortgage. Your experience with your first mortgage will determine how you will go.

Fixed Rate and Flexible Rate Mortgages

This type of mortgage offers you stability throughout the loan period. Whether the market goes up or down, you will continue to pay the same monthly payment. This is ideal for wage earners who have fixed sources of income.

The adjustable rate mortgage has its highs and lows and your payment goes with the tide. If rates are low, you make great savings on your monthly payments, and if the trend stays for quite a considerable time, it is an advantage. But when rates shoot up, refinance mortgage holders usually have to shell out more money than they can afford.

There are several types of refinance mortgage packages, but it still pays to go along with the type that will get you your second chance going without becoming overstressed.



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jewel asked:


I do my own taxes every year, but this year I have a question. I refinanced my mortgage in the spring. Had a significant amount of equity and decided to “cash out” some of my equity to help pay off some outstanding debts (car, student loan, credit card balance) and kept some to keep in saving (so it’s accessible, if needed). I know the government tries to take a piece of everything, but this is MY money. It’s not “wages” — does that make a difference?

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Rony Walker asked:


Couples go into their first mortgage with stars in their eyes. When additional bills come up, the budget is skewered. Paying the monthly bills and the mortgage installment becomes stressful. But there’s no way out but a refinance mortgage. This time around, couples should have learned their lessons. They should want a better deal instead of shuddering at the thought of a new loan when they’re still looking at a huge unpaid balance from the first loan.

Traumatic Experiences With The First Loans

Getting your first mortgage was exciting and thrilling. You went into raptures at the thought that of having your own home. You wanted to hurry up the loan process. Anyway, you could afford the monthly bill of $798.36 for a $150,000 home. What you didn’t include was the monthly residential tax plus other add-on fees and complexities.

Think like the shrewd taxman. If you don’t have the savvy for tax matters, let an expert help you. An independent mortgage adviser would be a smart choice. He or she looks at the issue objectively being under no obligation to the mortgage company. Your refinance mortgage will fare better with experience and sound professional advice.

Perhaps when you got your first mortgage, several options were bypassed because you wanted to rush your pre-approval, even pestering the sullen loan agent to get your loan application on top of the pile. The biggest surprise for first time borrowers is contending with the downpayment for the loan, which is pegged at 20% of the total loan amount. If they do not have enough money for the downpayment, they agree to have the private mortgage insurance added to the fee, which makes the loan expensive and more than they can afford in the end.

Another mistake is getting an ARM when you have a fixed income. With the uncertainty of the economy, interest rates are likely to swell, affecting your budget. The ARM is perfect when interests are at a low and hibernate there for months on end. Fortunately, if you have a short-term adjustable mortgage, Federal cuts could cause a drop in interest rates.

A Tip or Two

To qualify for refinance mortgage, get pre-qualified with several lending companies so you can compare options and prices. But don’t let the credit companies pull your credit history because each pull drags down your credit score. Once you get pre-qualified, choose the company with the best offer to look at your credit history.

Watch out for high closing costs. These indicate that you won’t get a good deal. You’re trying to sort out your finances through this refinance mortgage, not make it more messy. Avoid lenders charging closing costs that are too high, even if they offer lower interest rates.

Check out for prepayment penalties. Nobody likes to be fined for paying off a loan ahead of schedule. Frankly, it doesn’t make sense. But that is how lending companies survive and it is good business logic.

Give honest answers to the questionnaire. A falsehood can undermine your application for a loan when you really need it. You are dealing with experts who have been through hundreds of applications. If there are further requests for information, provide it promptly to avoid further approval delays.

To protect yourself from more surprises, be privy of the company’s policy on early payment and get all the documents pertaining to your refinance mortgage. The mortgage documents will be your reference as you go along.



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mochachreme asked:


I’ve got a mortgage that is in a repayment status under a forebearance plan, but they want to modify the loan and put what I currently owe on the back of the loan. I want to know if another mortgage company will refinance me with the loan currently being behind (although payments have been made as agreed through the plan).

Thanks for your help!!!

Stressed in GA…

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1st American Mortgage asked:


Jumbo mortgages are not so different from standard mortgages but there are a few key things that are worth looking in to.

Jumbo Mortgage Loans

A jumbo mortgage loan is a loan taken for property that is high-priced.. In Colorado, as in most of the U.S., a jumbo mortgage loan is any mortgage that exceeds $417,000 - the limit set by Fannie Mae and Freddie Mac for conforming loans.

Fannie Mae and Freddie Mac, the two agencies that buy the majority of real estate mortgages, will not finance loans greater than $417,000 in most states; however Alaska, Hawaii, and a couple others are exceptions. Therefore, the large jumbo mortgage loans are sold to other investments, often banks and insurance companies, and so a jumbo mortgage loan falls into a different category. Rates for a jumbo mortgage are also higher than conforming loans because there is more risk involved.

What This Means for Jumbo Mortgage Interest

The size of a jumbo mortgage loan means there is more to lose. The size, coupled with other factors, results in somewhat higher jumbo mortgage rates than those carried by conforming loans. Since percentage points on jumbo mortgage rages can mean sizable payment differences, buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate. Buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate.

In truth, jumbo mortgage interest rates are only one thing to consider when shopping for a jumbo mortgage. There are additional fees and closing costs to be considered that could even out the difference in jumbo mortgage rates. Sometimes, the company with the jumbo mortgage rates is actually the cheapest, all things considered.

Also, buyers shopping for good jumbo mortgage interest rates need to consider their goals, plans, and all of their options. Like conforming mortgages, jumbo mortgages are offered in a variety product lines. Buyers have the option of taking out loans with adjustable jumbo mortgage rates with 3 or 5 year locked rates that adjust after that period, or 15 or 30 year fixed jumbo mortgage rates that never change.

Deciding which type of product (variable or fixed jumbo mortgage interest rate) is better for you depends on whether you plan to stay in the home for more than that locked 3-5 year period, or whether you will refinance the loan within 3-5 years anyway.

Buyers should not be scared off from higher jumbo mortgage rates; jumbo mortgage rates are higher only by a quarter of a point or so for well qualified buyers. What’s more, jumbo mortgages are the only option for home buyers in many parts of the country because $417,000 really isn’t that high a price in today’s housing market. As a matter of fact, jumbo mortgage loans are the only type available in many areas. The best way to find a good jumbo mortgage loan is the find a reputable and experienced lender with good rates. A great mortgage lender will take the time to understand your needs so they can help you select an appropriate product.



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unlargocaminoalcielo asked:


I wanna refinance a 30-year mortgage. I’ve been living in my house for a year and have a prepayment penalty of 2 years. Two points. My loan is 80-20 and my monthly payment is 3600. How can I refinance a loan of 520 to get 20000 on cash and reduce my monthly payment?
Price for the house has increased… I wanna know how does that affect the mortgage.. Is it good for the loan?

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bgsimsrvp asked:


The individual took the loan out quite awhile back, when she was a struggling single mother. Now she is making around 80K per year, and doing fine. Wants to refinance so as to consolidate debts into a low interest, low payment fixed loan. The prospective mortgage companies won’t touch her existing loan due to the fact that it is a USDA loan.

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Rony Walker asked:


There is always a possibility of getting a no-cost refinance. Mortgage rates being what they are, this is, of course, a very welcome option. But lenders are in business to make money. Keep this in mind when you are trying to get a refinance. Mortgage problems make your entire fiscal situation even worse if not properly managed.

If your creditor is not earning income by charging direct costs for the loan, those fees will be integrated into the loan or you will be paying through an interest rate that is higher than normal. It is true that some banks offer true no-cost loans but not a lot of them do. Make sure you read your agreement thoroughly. You can get a Good Faith Estimate. When you do, ask the lender to guarantee it. Legally, Good Faith Estimates do not have to be guaranteed. This makes them almost worthless. However, lenders will guarantee these estimates if they do business with you.

It is a complex thing to seek refinance. Mortgage transactions have many costs attached. These include, loan discount points, processing costs, administration costs, application costs, and many others. Lender charges can be negotiated by the borrower. Some of them can even be waived. A Yield Spread Premium is the money that banks give to mortgage brokers for bringing your loan. Ask about this beforehand as you might have received a lower interest rate if the lender did not pay the broker a Yield Spread Premium.

What Is The Downside?

The bad things about a refinance? Mortgage refinance fees you pay to acquire the loan for one thing. You might not recoup these fees for a number of years. Another is the extension of the amortization period. You may be qualified to shorten it but you simply may not want to pay more each month. Also, a mortgage refinance makes the entire mortgage just that much bigger. The position of your equity will be affected by the refinance. Mortgage will increase if you take out the refinance in cash

Bill payment is something people do with a refinance. Mortgage payment is not the priority for them. They also use the cash to pay off credit cards. This is not a wise course of action. You will only dig yourself deeper into debt.

And The Upside?

Sticking with the home long enough will help you break even on the cost of the mortgage refinance. Lower interest rates and monthly payments will greatly improve your cash flow. You can also shorten your loan period in exchange for higher mortgage payments. Finally, the cash you obtain can help you in another investment. You just have to make sure the rate of return is higher than your interest payments.

Clearly, there is a lot to learn about mortgage refinance. A lot of it depends on your particular situation. As with most things, seeking professional advice will yield better results. Make sure that the counselor understands your situation and what you intend to do with the refinance.



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