When people think about refinancing a mortgage, they typically think about the existing, conventional loan on their home. But a reverse mortgage — a financial product increasingly popular among older adults — also can be a candidate for refinancing.
First, some background. A reverse mortgage allows homeowners who are 62 or older to borrow against the equity in their property. The proceeds can be taken in the form of a monthly check, lump sum or line of credit. Hence, the word “reverse”: Instead of a homeowner making payments to a bank, for instance, the bank makes payments to the homeowner. The loan is repaid, with interest, when the borrower sells the house, moves or dies. While these loans have their drawbacks (including the potential for some steep fees), more families are using them as a way to produce income without having to dump assets like stocks in a volatile market. To date, sales volume this year is up about 20% from 2002, according to the National Reverse Mortgage Lenders Association, a trade group based in Washington.
Why refinance?
By taking advantage of four changes since you first acquired a reverse mortgage — in your age, the value of your home, interest rates and the size of loans insured by the Federal Housing Administration — you might be able to put more cash in your pocketREFINANCING IS AN OPTION WITH REVERSE MORTGAGE…. .
Should I Refinance My Mortgage?
You’ve decided you might benefit from the currently low interest rates. But is this in your best interest? Who might benefit from a home refinance?
Continue reading QA2 – Should I Refinance My Mortgage?
Should I Refinance?
Answer: YES
Should I refinance?
STEPS TO BE TAKEN CARE OF: Most banks are much stricter on their lending criteria and only those with excellent credit and equity in their homes will get access to these record low rates. Here are the some of the main considerations and hurdles you think about when refinancing your mortgage:
- STEP1: You must have a Credit Score greater than 720
- STEP2: Your “credit utilization” ratio, which reflects to the amount you’ve borrowed as a percentage of your available credit, accounts for 30% of your credit score. No bad credit home loans here.
- STEP3: Must have at least 20% home equity.
You should have at least 20% equity, based on your home’s current appraised value (not what you bought it for). If your home has dropped in value, and your loan is greater than the value of your home (i.e. you are underwater on your home) you will almost certainly be unable to refinance.
Home Mortgage Refinance
- STEP4: No other mortgages or lines of credit.Should I refinance?
If you have a home equity loan or line of credit, you’ll probably need to pay it off before refinancing, which means you need to do a cost/benefit analysis of whether refinancing makes sense for you. Before a lender will refinance your first mortgage, it typically needs approval from the lender that holds your second mortgage.
A small consolation of the mortgage crisis are the depressed refinance mortgage rates that are now available. These historically low rates make refinancing a very lucrative option for a lot of people, for extra money to spend or to save. But before you make a move take advantage of cheap refinance mortgage rates, you have to make sure to do the math and make sure that you don’t end up spending a lot when trying to close a refinancing deal. Here are some tips
Continue reading Take Advantage of Cheap Refinance Mortgage Rates
Question/Scenario:
We currently have a 20/80, 30yr fixed loan. Together the rate is about 7.5%. We still owe over 270,000 on the loan. Would it be wise for us to refinance?
Continue reading Refinancing advise
