Refinance House Advice
With refinance house interest rates between 5.5% and 6%, today is an ideal time to either buy a house or refinance your current home. Just a few short year ago home mortgage interest rates were lingering around 8%. So there is good reason for house and condo owners to refinance now. Although today’s home mortgage interest rates continue to take small jumps upward in the last year, they are still a tremendous bargain around 6%. Over 70% of all house loans being originated today are refinances. Leaving the remaining 30% to involve home sales. When Should I Refinance My House? A rule of thumb in the past for home owners to refinance was that their mortgage interest rate should be reduced by at least 2%. There are NO rules for refinancing today. There are home owners who have refinanced two, three, and even four times in the last few years as mortgage interest rates continue to drop. The primary reason is the new “no cost” mortgages make refinancing profitable if the homeowner can reduce the interest rate by as little as 1/2% without incurring any loan costs! Be sure your refinanced mortgage does not contain a prepayment penalty. Refinance House Motivators
Refinancing your house takes time, don't rush it, 30 to 60 days is not unusual, especially if you have a bad credit problem, which needs to be cleared up prior to being approved. Where To Start Your Refinance House Quest The best place to refinance your house loan is with your current mortgage lender. In some cases, and quite frankly, not understandable why, some lenders don’t want to provide competitive rates and keep their current borrowers even when their is no late payment history. However, if you have a good payment record and currently have a VA or FHA mortgage, these lenders offer a streamline refinance plan, which does not require re-qualifying. If you want a new FHA or VA mortgage at a lower interest rate, start with your current FHA or VA lender for easy qualifying. Loan Fee Points For A House Mortgage Refinance - Don't Pay! When you bought your house, to obtain that mortgage you probably paid the lender a loan fee, called points. One point equals 1% of the amount borrowed. The points that you paid were tax-deductible as itemized interest on your tax returns. The reason it was deductible is that you obtained a principal residence, a acquisition mortgage. Refinancing your house is a different story. When a loan fee is paid to obtain any type of mortgage, except a principal residence acquisition mortgage, the loan fee must be amortized over the life of the mortgage. To illustrate, if you pay a 1% loan fee of $2,000 to obtain a $200,000 30-year refinanced home loan, you can only deduct $66.66 each year over the next 30 years. Although paying a 1% loan fee will slightly reduce the interest rate on a refinanced mortgage by 1/8% for each loan fee point paid, you’ll probably be better off obtaining a no-cost mortgage without any loan fee and a few minor closing costs. Choose not to pay and take the no-cost mortgage because your loan fee could only be deducted over the loan’s lifetime. Good Faith Estimate - Keep Your Eye's Open For Junk Fee's Refinance house lender junk fees are loan charges imposed on borrowers in the closing papers, but which were not previously disclosed on the lender’s Good Faith Estimate, which is required to be given to the borrower within three days of the loan application. Lender junk fees are a scam, which borrowers will believe and accept. Titles include administration fee, loan approval fee, preparation fee, underwriting fee, processing fee, etc. But legitimate fees paid to third parties include appraisal fee, credit report fee, escrow fee, courier fee, wire fee, title fee, attorney fee, etc. There should be NO markup on these fees paid to third parties. If you think the fee is too high, ask to see the actual bill from the third party. Don't get ripped off when you go to refinance your house! |
