No-Cost Mortgage Refinancing is a Costly Decision

When your looking around and are ready to refinance your home or condo mortgage, you are bound to see a fair number of advertisements for mortgage company’s offering “No Cost”, “Free”, Or more recently “Reduced Cost For Condo Mortgages”. Now somewhere deep down you have to ask yourself, “Why would this be free here and cost good money somewhere else?” Here’s a few tips to look for, regardless of there “No cost” offer, to ensure you get the best deal when refinancing your condo or home.

Why do some company’s advertise “No cost refinancing”? Why do other mortgage lenders have a very low flat price? Why do yet other lenders have a % based price? They make up for the “Deal” their offering you with a hyperinflated rate or get you into an a.r.m. Loan on your condo or house. They will make whatever the other companies charge plus more with these crazy high rates. So simply put. The low cost or free mortgage and condo services are not to be trusted.

The industry standard for condo and mortgage refinancing is the mortgage company usually takes a sum of .5%-.75% of your mortgage rate as there commission. For the most part, a company offering “No cost” or other gimmick offers usually tack on an additional fee for their commission ranging from another .5% to .75%. That means for you the condo or homeowner your refinancing will cost you more every single month for typically 30 years. Which is a lot of money in the long run.

Deceptive home refinancing techniques like this are used everywhere in the USA. They are easily found and spotted. There is no free anything in the refinancing industry. The only thing you can do is be smart going into it.

-M Petrone

What Your Mortgage Lender Can and Can’t Ask

When you’re seeking a lending solution, you face a number of questions, comments, paperwork, and effort. You have to hunt down a home that you like, compete with other home-seekers to put a bid in, arrange your finances-and then there’s your mortgage lender asking you the questions. Here are a few tips on what they can ask, why they ask, and what they definitely cannot ask.

Are you single, married, or divorced? Wait a minute, is this a date? Your lending specialist needs to know the answer to this question for a number of reasons. If you’re married, your spouse’s income can contribute to your household earnings and credit, securing you a better loan. Or maybe your spouse is a veteran or active military member, qualifying you for a VA loan. If you’re divorced your loan specialist wants to make sure that child support, alimony, or any other debts by either party are accounted for.

How old are you? This question can go two ways: while it is prohibited to discriminate against the borrowers based on age, one must be at least eighteen years old to secure a loan and take responsibility for that debt. Your mortgage lender needs to make sure you’re legally old enough for this responsibility.

Are you in good health? Nope! If your mortgage specialist asks you this question, find another one. The Equal Credit Opportunity Act prohibits making mortgage decisions based on the health status.

How many children do you have? This is another important question that your loan consultant may ask, and it is well within his or her right to do so. Children affect the residual income your home has, changing your loan availability.

Are you planning to have children? Unlike existing children, loan consultants are not allowed to ask about family planning. Similarly, they cannot ask whether either or both parents plan to continue working after a new baby is born.

What ethnicity are you? While your loan specialist can ask this question, then you don’t have to answer. This information is gathered and reported to the US government to help protect against discrimination. Statistical analysis helps researchers determine whether certain demographic groups are getting denied loans more often across the country or in specific locations. By providing this information, you can help to fight patterns of discrimination-but if you want to keep it to yourself, it is well within your rights.

A Mortgage Refinance May Not Be for Everyone

The real estate business seems to be extra confusing in the last few years. Interest rates have gone down yet many home owners can not afford to keep the home they live in. It does sound very enticing to have lower mortgage payments but the thought of refinancing is often overwhelming to many home owners. There is never a perfect time to do any thing, most people know this. When it comes to mortgages and the fees involved, most people are quite hesitant.

If news is out about the interest rates going lower, this could, potentially be good news for anyone wanting to refinance. Not always, however. This is the time to begin the research and look into all the fine print. Initially, this would seem the perfect time to upgrade your mortgage but only if the other fees do not overwhelm you. The only way to evaluate these critical factors is to study and learn about them.

Consider refinancing your home by comparing your current rate with those being advertised. You can start by a search online for good rates. Verify what your actual current home mortgage rate is. Do a comparison of some of the reputable lenders in your area. You must remember to keep a list of all the critical questions handy each time you make a call. Do not be mislead by the lowest quote on interest rate for your home mortgage refinance.

Getting a great deal will depend on the down payments required, the duration of the mortgage, and the amount of the closing fees. If it is obvious that any of these are too high, it will not be a good move on your part. Other times, it is not so obvious and you will need to do some figuring with the computer. You will have to imagine several scenarios that could work and those that would not. For example, it could still be worth while if you plan on living in the home until you have paid it off.

Most people do not live in their homes for more than five years, usually. If this is true for you, then you may wind up paying more for the fees at closing than you could save by doing a refinance. It is important to find a source that will give you a good interest rate and zero to low closing costs.

Basically, your situation will tell you if a refinance could work for you this year or not. If you are stuck with an adjustable rate mortgage, it might be a perfect time to renegotiate for a fixed rate instead. Some of these trick the new homeowners with a very low interest rate the first year or so and then continue to raise the rate every few years with no cap.

How to Know When to Refinance

Refinancing can be a great money saving tool for homeowners, or it can be the wrong thing at the wrong time. Last year, according the Mortgage Bankers Association, Americans refinanced to the tune of $1.17 trillion dollars. The rising cost of fixed rate mortgages drove that to a mere $938 million this year. That’s still a huge number of people who choose to refinance their homes or commercial mortgages. Here are some guidelines to help you decide if this is the right time for you to refinance.

What to Know Before You Refinance

You need to be able to answer some basic questions about your home or real estate investment before you can make a wise decision about the best time to refinance. For instance, what is your current interest rate? Is it fixed or variable? Is your home’s value increasing? Can you afford the closing costs associated with refinancing? What are your plans for your home or real estate?

This background knowledge will help in several ways. If you plan to move within the next three years, or if the difference in interest rates in less that 1.5%, then refinancing might not pay off right now. Remember, once you refinance you need time to recoup the closing costs you have invested. However, if you have a variable rate that is climbing, or a significantly higher fixed rate, refinancing may offer you some appealing options.

Why People Refinance

People refinance for different reasons. In many cases, the decision to refinance can help to reduce your monthly payments and interest, or reduce the life of your loan and the principle owed. Others obtain a cash-out closing to make home improvements or pay off consumer and credit card debt. This method usually doesn’t lower your payments.

Before You Decide to Refinance

But before you jump into a decision to refinance, be aware that there are costs involved. Closing costs and points will affect how much money you must pay up front to refinance. A point is equal to 1% of the total amount of your loan. You should expect to pay 2-3% in points when you refinance. Just like when you purchased your home or real estate investment, the more money you put down, the lower your interest rate is likely to be. There are instances where you can get a no-cost closeout, and these are ideal, but not always available.

A word of caution; if you find yourself refinancing yearly to pay off debt, you’re not doing yourself any favors. In this situation you are probably increasing both the life and principle balance of your loan amount. This is a short-term fix that can have long-term consequences.

What Can Help

To help get the lowest interest rate when you refinance you can do one of two things. Put as much money as you can down upfront, or use that money to pay off consumer credit card debt. Since your interest rate and the amount you can borrow are tied to your credit score, it can save you money to improve your rating before you refinance.

And don’t forget to shop around. You will find a lot of lenders willing to work with you, and mortgage rate calculators are available on many real estate websites. A little homework now will save you a lot of money later.

Refinance Florida Mortgage Loans Now For Lower Interest Rates And More Affordable Payments

Average to above-average credit types stand to benefit from mortgage refinancing, especially in Florida. It is an attractive state for lenders who fund mortgage refinance loans. Known for having a booming economy and balmy weather, Florida is a popular destination for tourists, adventurers, young professionals, growing families, and retirees alike.

The population has been booming for decades as it is ranked 4th in U.S. Many new residents first experienced Florida as a visitor, loved it, and decided to stay. A booming population means the growing need for housing. Current mortgage and refinance rates have been lowered to fill that need, giving residents the opportunity to cash in on affordable (or more affordable) payments.

Real estate in Florida includes family homes, beach living, luxury estates, urban lofts, and some of the most sought after retirement communities in the country. Florida ranks low in terms of the tax burden placed on residents and research ranks it among the 5 lowest tax states in the country. It is also a prosperous state. Six of the 67 counties located in Florida are in the top 100 richest counties in the country.

With interest rates a low as they are, today is a prime time to get a new mortgage loan or refinance your mortgage. Why? It is quite simple. The Fed has taken serious steps and lowered interest rates for us to take advantage of. Generally, lenders find mortgage refinance loans in Florida pretty simple to close. Those two facts combine to make it possible to save hundreds, thousands, or even hundreds of thousands of dollars on your Florida mortgage or refinance loan. We do not know how long the record rate drops will continue. That is why the time is now. It will only take a few minutes to determine how much money you can save each month, and over the life of the loan.

For help securing low mortgage or refinance rates in Florida or any other state, visit http://LowRateSearch.com

Kind regards,

-Ken S.