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Refinance Home Loan – Dos and Don’ts

April 13th, 2010



Lending companies need your business. If you are taking out a refinance home loan, check out what your current mortgage company can offer. Do not get a new loan from them unless they can offer you lower interest rates. On top of this notice, observe cautionary tips to get yourself a better deal on your new loan.

Getting A Refinance Home Loan

It is not always profitable to get a new loan with the same company if they cannot offer lower interest rates and they charge you more fees for the second loan.

Before getting a contract with a new lending company, know the following:

1. Is the service transferable?

2. Will you be going through the set up process anew?

3. Will you be paying another fee?

4. When will the current company forward the additional payments toward your refinance home loan?

5. Can you expect savings after the fees and costs involved in the new loan?

Traps to Avoid With a Refinance Home Loan

1. Do not get a new loan from your current company if they cannot offer lower interest rates like the other company. They may offer you a mortgage equivalent to your old loan in addition to your new loan contract.

2. Never drop a low interest rate loan for a higher interest loan. Look at the Annual Percentage Rate of the new loan. This should be lower than the rates stipulated in the previous loan. Consider also the insurance costs, closing cost, and other fees charged upfront. A lower monthly payment should not be enough enticement to get a refinance.

3. Avoid the offers of very low interest rates as these will balloon later to rates you cannot afford. Steer clear of variable rates that may sound attractive for the low interest rates charged during the early part of the loan.

4. Don’t fall for tax advantages offered for debt consolidation purposes. Review your personal tax position and analyze how this will be affected. Unless you diligently itemize your deductions, the tax write-off for your mortgage interest is useless.

5. Avoid spurious lending companies. You will know them by the suspiciously low rates they offer.

6. Don’t forget that you have three days to cancel your loan. This offers you the chance to get out of a loan that is disadvantageous to you. It is your house that is on the block, so be vigilant. Inform the lender that you have changed your mind before the deadline.

Payments to Prioritize If You Have A Refinance Home Loan

Be smart. Even if you have a refinance home loan to pay monthly, prioritize important payments to get yourself out of trouble.

Always be up to date with your Council Tax payments or you might end up in prison for this neglect. For your home and office, pay gas and electricity bills on time – suppliers can disconnect your lines anytime. If you are paying business rent and rates and insurance, give these your attention. When the tax month comes, pay your taxes diligently. Put your savings from your lower refinance home loan monthly payments towards your taxes without having to dig deeper into your funds.

Armed with these dos and don’ts you can check out the offers of the different lending companies.

By: Rony Walker

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Oregon Refinance Loans – The Rules of Refinancing

February 9th, 2010



Getting an Oregon refinance loan isn’t as simple as it used to be. Borrowers have way more options to choose from than they ever used to. This can make the entire refinancing process seem overwhelming. If you need a little guidance, here are a few refinancing rules that you’ll want to follow to the letter.

Borrowing Rules

Regardless of the lender you choose, you will probably be asked whether or not you want to borrow any additional money when you apply for your Oregon refinance loan. As tempting as cash out refinancing can be, it is important to remember that you will be responsible for paying back whatever you borrow. The rule you want to stick to is: never borrow more than you can afford.

The Twenty Percent Rule

The old rule that says you should have 20 percent down on your loan seems old fashioned these days, but it is actually very good advice that can apply to both new mortgages and refinances. If you don’t have at least 20 percent equity in your house, you will be required to pay private mortgage insurance (PMI). PMI can be costly and is a serious waste of your money. Keep this in mind when you decide you want to roll in closing costs or get cash back at closing.

Closing Cost Rules

Closing costs on Oregon refinance loans average $3,137. This is slightly higher than the national average and can make a serious dent in your savings, not to mention the overall cost of your refinance loan. To cut costs, you may want to try using some of the same documentation that was used during your first loan, especially if you are refinancing within a few years of your original closing. You can also try to negotiate with the lender who will be handling your Oregon refinance loan. Some lenders will be willing to waive certain fees.

By: Jane A. Hale

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Home Equity Refinancing – VA Loan Refinancing

January 25th, 2010



Opting to go with a VA loan to refinance your home mortgage can be great for your budget. It is possible to get cash when you need it. If you need to consolidate your high interest debt or pay for a child’s tuition a VA loan can be beneficial.

VA refinancing loans can be great. If you need you can find cash in little to no time at all. It can be a great tool to utilize.

What a VA loan transaction requires is repayment of the estate debt. The loan must be for the same property and also the same borrower. What this is called is “Cash Out Refinance.” This “Cash Out Refinance” is considered the principle residence of the homeowner.

In general the rule for the owner is that their homes can be refinanced for up to 90% of its appraised value. However, this option is not available in every state so check whether you are in a state that offers this option. The closing cost must be at par with the ratio of the homes value.

It does not matter how long the home have been owned, it is not a requirement for this loan. However, the minimum requirement is that the homeowners pay the loan on time on a consistent basis.

Most often people are not aware whether their rates are adjustable. This is a big concern because most people budget their income to accommodate the payment that they currently have. Fixed VA loans are great because it allows the borrower to know exactly how much they need allow for their payments every month.

This however is up to the lender to decide. The other option would be the VA loan that with an adjustable rate. On average the interest on the loan is adjusted by 1% every year. The duration of this is usually around five years and would typically reach 5%.

The only person that knows what is best for you is yourself; never take the first offer that is given to you. It is a common mistake people make, jumping on the very first offer because they are worried or not exactly sure of what to do or what they can do.

Do some research and find a plan that best fits you and your situation. It is recommended to speak with a consultant and look at their calculations. Look at how differently you make have to make the payments, depending on whether you choose to go with an adjustable VA loan or a VA loan that has a fixed rate. Make sure you are absolutely comfortable with the plan that is offered.

Once you have the numbers, think whether you would be able and comfortable with your monthly payments and go from there.

By: Michael Petrone

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