House Refinance Center
Residential Mortgage Refinance At Low Interest Rates
Mortgage Rates
Still Low: Get
'Em While They
Last

Mortgage rates are still relatively low so
now is the time to refinance your house.
This opportunity might be gone tomorrow.

If you have given consideration to getting a
Home Equity Line of Credit or refinancing
your home, the time is right. Waiting for
rates to drop further might not save you
much money in the long run. However,
remember that you should only refinance or
take a HELOC if it makes financial sense.
A good rate from your lender is not enough
incentive.

If a family member has a chronic illness, or
if you have a leaky roof, or your son is ready
for college; these are refinancing
opportunities. If you decide to repair the
roof, look around and see if there are other
things that would need replacing or
updating in the next twelve months or so.
Consider remodelling your kitchen or your
master bathroom. The roof repairs might
not add much value to the house price, but
the remodelling of the kitchen or the
bathroom will substantially increase the
market value of the house.

So now that you have decided on going
forward with your project, the final decision
is, get a refinance mortgage or get a Home
Equity Line of Credit. Here is a situation
where we prefer the HELOC. The time
frame could be spread out over two or three
months. You can shop for supplies,
products and material that are on sale. And
you can pay the contractors as the work
progresses.

With the refinance option you get the funds
and you begin paying interest from day one,
whether you are using the money or not. If it
takes you four months to find the right
contractor and start the job, you have paid
out four months in interest. With the
HELOC, you pay for what you use. For
example, if the HELOC is for $70,000, and
you were able to buy some appliances on
sale for $15,000, then you pay interest on
the $15,000 draw-down, not on the $70,000
original amount.

To make your project a success, make a
budget, and stick to it. Remember, you are
taking equity out of your house, so please
use it wisely.
Refinancing: Be
Prepared To Jump
Through Hoops

Homeowners are still having a hard time
refinancing their houses. They are faced with
several hoops along the way.


  • Strict underwriting standards. Documents
    have to be verified. Specifically,
    employment letters and pay stubs will be
    scrutinized very carefully. Many lenders
    have been tarnished with fake documents
    and had to buy back some of their bad
    loans.

  • Long period of just waiting for a "yes" or
    "no". Banks laid off thousands of workers
    during the peak of the housing crisis.
    They are now facing increased volumes of
    applications. The existing staff just can not
    keep up with the amount of applications. It
    might take 3 or 4 days to get a simple
    return phone call.

  • Loan to Value ratios are out of whack.
    Your lender will do an appraisal on your
    house to get a market value. If you owe
    $400,000 on the mortgage, then the
    appraisal has to come in at $500,000 or
    more.  However with the depressed
    housing market, the appraised value
    could be high or low. If you think that the
    appraised value is low, ask for a different
    company to do the appraisal. You might
    have to pay for it. But it would assure you
    that the bank's appraiser wasn't looking
    after the bank's interest.

  • Not enough equity. Lenders are looking
    for at least 20% equity in the house
    before they will consider your application.
    If the equity is lacking, then you have to
    purchase private mortgage insurance.
    This could be expensive.

  • Second lien on the house. If you have a
    second mortgage, or a home equity line of
    credit, the lender would like this debt to be
    paid off in full before the refinance.

Be persistent in your quest. Try community
organizations, church members, or the
government program, HARP. On many
occasions, it's "whom you know" that counts.
Refinance Your Mortgage
When you refinance the rate is obviously important. But
consider other features before you sign the deal. Think of the
closing cost and the points. Watch the above video.
Zero Cost
Refinancing? Not!

Mortgage rates are at record lows. So it comes
as no surprise that many homeowners are
looking at ways to refinance their mortgages.
But zero cost?

No way. Remember your parents telling you
there are no free lunches? Well, as usual, they
were right.

The term "zero cost" is not accurate.
Furthermore, it should be illegal for lenders to
advertise in this manner. A refinance always
carries some kind of fees. The trick here is that
the borrower pays a higher mortgage rate in
exchange for not paying fees out of pocket. For
example, your initial rate quoted might be
4.50%. When you choose the zero cost deal,
you will pay an additional 0.50% or more, bring
the final rate to 5.0%.

How do you know if the "zero cost" refinance you
are getting is a good deal?

Make sure you comparison shop. And when you
do, get an itemized list of the closing costs and
the amount you would have to pay. Knowing the
interest rate alone is not good enough. Your
next step is to look at the best rate offered with
no out-of-pocket closing costs. Also ask for a
rate where you pay the closing costs upfront.

Your best deal will be lowest interest rate and
the lowest closing costs.

Remember that when a mortgage broker
pushes you into a higher rate mortgage he or
she gets paid a higher commission. This is the
practice of yield spread premium (YSP) and it is
illegal. So be careful when you're shopping for
your refinance mortgage.

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