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Over the past few years, the United States has been in the midst of a ‘refinance boom'. Basically, with mortgage interest rates as low as they have been in any recent history, homeowners are taking advantage by refinancing their higher interest mortgages. Refinancing rates change from day to day and vary from lender to lender. If you are interested in researching refinance rates for your home loan, here are a few places to start.
First, you can always take advantage of the Internet to find refinance rates from several lending institutions. Many resource websites and news websites also post daily changes to mortgage interest rates. Be sure to look at several sources to get a fair appraisal of what the mortgage market can really offer you.
Another great resource for daily refinance rates is your local newspaper. In most local newspapers, there is a section dedicated to listing the rates provided by mortgage lenders in your area. The choices here will be more limited because they are all local, but will also be more personal for the same reason. Use the newspaper to find out what your specific area can offer in terms of refinance rates from local lenders.
Researching refinance rates is easy if you simply use the right resources. Start with your paper and the Web and you will find rates for every person and loan scenario.
When it comes to home mortgage refinancing, there are two main types of refinancing options; Rate & Term or Cash Out. A Rate & Term refinance is just as it sounds. The purpose of the refinance loan is simply to get a better rate and extend the term, or length, of the loan. Rate & term refinancing rates vary based on the lender, but there are other factors that are involved in determining your rate as well.
First, in a rate and term refinance, the amount money you are borrowing based on the value of the home will factor into your refinancing rates. This is called the ‘loan to value' ratio. Basically, if you have a home that is worth $200,000 and you have an existing mortgage of $100,000, you would have a 50% loan to value (LTV) in your refinance. Refinancing rates will vary after you rise above an 80% LTV ratio.
Typically, refinancing rates will change at 90%, 95%, and 100% LTV. The higher the LTV, the higher your rate will be. Rate and term refinancing is a great way to save on your monthly mortgage payments if you have already built up a good amount of equity. Remember to take the closing costs into account when deciding whether to go with a refinance loan.
If you own a mobile home you surely remember the financing procedures from when you purchased it. Lenders are less motivated to invest in mobile homes because of the danger of depreciation over time. The same wariness goes for refinancing mobile homes.
If you are looking to refinance your mobile home, you will find that refinancing rates will be higher for this type of property than for a single family home. Mobile home refinancing rates will greatly depend on your credit worthiness as judged by the lender. If you have good credit and steady employment, the refinancing rates that you will be offered should not be too great. However, if you have credit issues and cannot show an employment history, your refinancing rates will be much higher.
Remember, lenders are interested in good investments and in mortgages they are investing in the person and the property. If the property and the person are higher risk, the rates will be higher. Check around the Internet and with local mortgage brokers who can give you specific refinancing rate quotes for your mobile home. Be sure to get more than one quote so that you can try to get the best rate possible.
There are two types of mortgage refinances that a person can do on their home mortgage; Rate and Term or Cash Out.
A cash-out refinance is when a homeowner would like to draw equity from their home with a new mortgage loan. Basically, if you have the room to move as far as your LTV, or loan to value ratio, you can refinance your current mortgage for a new rate and a new amount while drawing out the difference between the old mortgage and new mortgage in cash. For people looking to fix up their homes, taking advantage of current refinancerates to do a cash out refinance is definitely the way to go. You are basically taking money from your home and putting it right back in through home improvements.
Refinance rates for cash out refinances will vary depending on the LTV you wish to borrow and the term with which you choose to repay the loan. Be sure to ask about the tax implications of taking a cash out refinance when you are looking for refinance rates.
Most people include closing and settlement costs into their refinance mortgage loans. Your decision to include or exclude these expenses depends on your reasons for the refinance and your future plans for the property or at least the new mortgage.
If you have set strict financial controls on yourself with a plan to reduce your monthly payment and/or accelerate the pay off of your mortgage loan, you might want to pay your closing costs to keep your mortgage balance as it was before the new loan. An equally important consideration is the subject of points and tax deductibility. This subject is often misunderstood by many and can cause tax issues.
If you are paying one or more points for your new mortgage, you can pay from your funds or include the cost in your refinance. If you want or need to deduct the cost of any points in the current tax year, you MUST pay this from your own funds. If you include the points in your refinance, you must deduct their cost over the life of your loan. Many people assume this cost is immediately deductible but it is not if included in the refinance.
Again, most people include all closing expenses and points in their refinance because it costs the borrower nothing from their current funds. It's easy and convenient. The only downside is that your mortgage loan balance will increase by the amount of your closing costs and points.
|Sheri Ann Richerson|