REFINANCE » Refinance Your Mortgage

If you own a home, or are currently looking to buy one, then you know how complicated the process is. You may never have processed so much paperwork or jumped through so many hoops in your entire life. By the time you close the deal and are ready to move in, you’re exhausted – and then of course you have to move in, get everything set up and out of the boxes. The whole process from getting the house to the move in is quite tiring. Come time to refinance your home mortgage loan you may even cringe. The stress of taking care of all the finances for your home can be very overwhelming and that is why many banks, credit unions and other financial institutions in the business of lending offer something called streamline refinancing.

Streamline refinancing is designed to make the process of refinancing easy. By and large, there are only a few basic requirements in order to qualify for streamline refinancing which are:

• Your mortgage loan has to be in good standing (no delinquency, or anywhere near foreclosure, basically)
• The loan has to be insured
• The purpose of the streamline refinancing is to lower the monthly payment
• You can’t get any cash back from the refinance

Owning a home can be quite overwhelming and somewhat stressful. You have to maintain it, pay others to maintain it, and stay on top of all your bills in order to keep it all together. You are also legally bind to your home, since it is your responsibility to be on top of things in order to keep your house – and to do so you must do well at at work in order keep your job to keep your finances in line. Owning a home is even more stressful now with the current economic down turn and when just about everyone is running some risk of losing their jobs. So if you can get lower interest rates on your home mortgage loan then it is a good time to think about refinancing – even if interest rates have risen a bit, you should still look into it especially if your current interest rate is higher. While on that note, did you know that you can refinance with limited equity?

Refinancing with limited equity is doable. The best way for you to pursue refinancing with limited equity might be to get it from the Federal Housing Administration (FHA). FHA refinance loans can definitely help people who are hoping to refinance with limited equity, since the mortgage payment is reduced, those risking foreclosure will be able to avoid it, and can get cash out to consolidate bills or even help improve their home value. FHA refinancing also have terms that are easy to understand that have low costs involved, and don’t require standard credit demands (i.e., strong or perfect credit). However, FHA loans have eligibility requirements that you must meet in order to qualify for refinancing with limited equity programs. You can refer to the Federal Home Administration website for information on the qualifications.

Despite the real estate market picking up again, people who are looking to buy homes are not looking in non metropolitan areas, which includes the highest numbers of homes with underwater mortgages.

It is hard for homeowners who have underwater mortgages to stick around and make the payments, so many just walk away from them and kill their credit scores, while very few have tried to sell their homes and taken the lose (if they’re lucky enough to even sell the house). However, for those who are still holding onto their underwater mortgage, underwater refinancing is an option that many can try since it is not impossible, yet can be tough.

Recent rate increases in the housing market may be having an effect on those who want to refinance. As the market stabilizes, it seems to become more difficult for individuals to negotiate themselves into favorable mortgages.

Why Are Rates Rising?

Months of lost jobs and foreclosures resulted in tons of individuals having to walk away from their homes. In fact, pre-owned home sales saw the lowest numbers in 12 years just in January of 2009. As a result, the market was flooded with homes that needed to be sold – at any cost. This was good news for those who were looking for some cheap deals, especially since home prices dropped 14.8% in a year’s time. These low prices encouraged many to get back out to buy a house at a great price.

Owning a home is the cherished dream of millions of Americans. It’s expensive, complicated, and often-times nerve-wracking, but the rewards of comfort and stability far outweigh the trials and tribulations that go along with it. One aspect of home ownership that falls at the complicated end of the spectrum is holding a mortgage. Ask any homeowner and she or he will tell you that that monthly payment can take a big  - a very big – bite out of every paycheck. And since most mortgages are long-term, the mortgage payment will continue to take a big bite out of a homeowner’s paycheck for years and years to come. Many mortgages are spread out over a minimum of 30 years. If you’re a homeowner, and you’d like to refinance your mortgage, you could save a lot of money in doing so. There are very competitive mortgage refinancing rates out there, but finding them can be tricky. Read on to find out where to check on mortgage refinancing rates.

Where to check on mortgage refinancing rates is a question that’s both simple and complicated to answer. It’s simple in that all you have to do is scout the Internet and see who is offering competitive mortgage refinancing rates. But it’s complicated because there are a number of mortgage refinancing rates being made, and you have to sift through them all to find the one that’s right for you.

Potential home buyers not only need to decide on where and what they are going to purchase but how they are actually going to finance the transaction. With the variety of mortgages out there, the options may seem overwhelming and confusing. One thing that can help with the decision making process is conducting appropriate research on the different mortgage types, and then figuring out how it may work best for you. One such option available are adjustable rate mortgages (ARMs).

ARMs are a type of long term loan where the financial institution will offer borrowers lower rates than the national average for a traditional fixed rate mortgage. The reason for the discounted rate is twofold as the rates will reset and can go up or down during the lifetime of the loan and the borrower is assuming the risk, not the mortgage provider.

Unfortunately many individuals that bought their homes using adjustable rate mortgages (ARM) have experienced sticker shock when their rate resets. The amount of homeowners affected recently has further contributed to the economic crisis that is currently affecting the nation. As part of the Obama’s administrations stimulus package, the Federal Housing Administration (FHA) is taking bold steps to help those with ARMs to refinance their mortgages into more affordable options.

The movement actually launched in September of 2007 under former President Bush. At that time the FHA launched the FHA Secure Initiative. This strategy allowed borrowers to refinance their mortgage in order to fend off the debts becoming delinquent. The original policy applied to homeowners who were previously paying their bills on time, but the ARMs reset caused them to struggle greatly with staying on track of their mortgage payments. That plan expired December 31, 2008.

The nation’s economy is in serious, serious trouble. Unemployment rates are shooting up every month, and no one can say with certainty that their jobs are absolutely assured. So that means people, even those who are still lucky enough to have their jobs, are looking for ways to save money wherever possible. One of the first places where a homeowner will start looking for savings is their mortgage, by refinancing their mortgage with a new and better rate.

By calculating your refinancing opportunities, you will have a better understanding of how different refinancing scenarios will play out in terms of saving you money.

You should consider refinancing when you can get a lower rate on your existing mortgage. This can happen when market rates move down. Or when you increase your income or credit rating. Or perhaps when you simply found a better deal in the market.

However, when you refinance your house, you need to pay fees. Therefore, before you go ahead with refinance you need to make sure you gain more in lower rates than you spend in fees. Read the exact terms offered to you, and calculate how much you will pay on your current loan over the next 3-5 years. Then compare this to the amount you pay on a new proposed loan, including all fees. If the new loan wins, go for it.

The terms of a mortgage loan can often be reevaluated and changed from time to time, depending on what the home owner wants and what the lender agrees to. One change that a home owner can make is a no-cost refinancing. A no-cost refinancing is one where your lender pays all the fees associated with processing a mortgage loan, in exchange for a higher interest rate.

No-cost refinancing is a popular way to refinance a home loan. It allows people to avoid processing fees, which can be in the thousands of dollars. Unfortunately, those fees you save initially are still charged to you over time, in the form of higher interest rates. In fact, if you plan to hold your mortgage for at least 3-4 years, it is almost guaranteed that you will end up paying more in higher interest rates than if you simply paid all the fees upfront. And if you plan to hold the new mortgage for 10-15 years or more, for every $1000 you save in initial fees, you will probably pay $3000-5000 over time.