October 25th, 2019 11:57 AM by Gregg Mower
Have you been thinking about refinancing your home and not sure if you want to go through the hassle? Not sure what to expect or afraid you won’t qualify or just don’t know where to start? These questions are the typical questions Homeowners have today. But if you think about it, how long will it take out of your day to make that simple phone call or complete a refinance questionnaire? The answer is about 10 minutes, that’s shorter than a Geico phone call and could save you far more money. We know you don’t this everyday so we try our best to make it as smooth as possible for you and answer all the questions you have. So let’s to answer some of your questions in this post.
Let’s start by seeing what your existing interest rate is on your property. Then let’s take a look at what your home is worth in today’s marketplace, we can run that evaluation in about a minute. We will also want to know what type of loan you currently have on your property such as a Conventional loan, FHA loan, VA loan or some alternate type of loan to evaluate if you are paying mortgage insurance or not. The government has lowered the FHA monthly mortgage insurance rates by .5% in 2015 so you might get a double savings. So a typical FHA loan that was taken out in 2014 with an interest rate of 4 % with a loan balance of $250,000 would be a saving of $140 just on the mortgage insurance savings a month and all you would have to provide is a current mortgage statement, your home owner’s insurance policy, and a copy of your Note. That is all you would need, no income verification, no bank account verification, no appraisal. This is called an FHA Streamline Refinance by clicking on it will take you to the detail page. The FHA Streamline loan only works when you have an existing FHA loan. If you are a veteran, and have a VA loan on your home, the VA has a similar program called an Interest Rate Reduction Refinance Loan or IRRRL. If you have a FNMA or FHLMC loan (a conventional 30 year fixed) the similar type of program would be the HARP program. The HARP program or the Home Affordable Refinance Program is really designed for those home owners that owe more than their home is worth and wish to lower their monthly payments. If you have equity in your home with a conventional loan on it, you would need to fully qualify again for a new loan.
Once we determine that a refinance is the right avenue for you we will continue by completing a simple refinance form online or we will talk and get some basic information and formulate the best possible scenarios for you. We will tell you if it is worth your time to do a refinance before you have to gather anything. The information you send us, either online or over the phone, is secure and will not be used for spam or any other kind of mass marketing. Refinancing can save you thousands of dollars a year so don’t take this lightly as we don’t and we do our very best to formulate the very best loan scenario for your financial situation that will save you the most over the long run.
What do you need? If we are not doing a FHA Streamline you will need to gather your Federal income taxes for the last 2 years and W2s, your current mortgage statement, your home owners insurance declaration page, bank statements for the last 2 months, and your last 30 days of pay statements. Will do the rest for you, like open escrow, order an appraisal and process the paperwork. It does not matter who your existing lender is, we are completely refinancing that old loan and you will have new mortgage company that you will make your payments to. You might ask if it would be better to go to your existing lender to refinance your home, and in most cases it is no better and in some cases, I have seen the existing lender charge more and you end up with a slightly higher interest rate. It is always good to get a few quotes, but make sure you talk with someone who can actually give you an accurate quote. The interest rate on your new loan is based on several variables such as equity, credit score, loan program, and whether you are taking cash out to pay off a second mortgage or other debt. So it is always best to have the rate calculated for you based on your situation. Lenders and Brokers all have to go to the same places to get the rates for you, so rates should not vary that much from lender to lender, but the fees charged can.
So what happens when once you decided to start the process? Once you have supplied the paperwork we have requested, we are tasked with providing you with disclosures that spell out all the charges and the payment on the new loan. We will go to an Escrow or Title Company and order a preliminary title report to make sure there are no liens on the property that you did not know of. We will order the appraisal (if necessary). We will do all the necessary verifications of your employment, credit, and assets (if necessary). Once we have everything back we submit the file to underwriting. When the loan is approved we draw the loan documents and send them to the Escrow or Title Company and have you sign them. Most of the time we can arrange that you sign in our offices, if that is more convenient, or we can have a notary come to your home, or you can go to the Escrow or Title Company to sign them. Once you sign the documents, they are set back to the lender to be reviewed. Then the new loan is funded and the old loan is paid off through the Escrow. You new first payment will be the following month.
What will this cost me? In most cases we make the new loan where you have no out-of pocket expenses. This is done either within the interest rate you decide to take or included in the loan amount or both. This is done upfront before you make a decision to refinance and is part of the analysis we do to make sure it will be a good investment to refinance. A general rule I like to follow is to find out how long you plan on being in the home and fit the loan that plan. An example would be if it costs $5,000 to refinance, either included in the loan or paid in cash, and you save $250 a month in your payment, it will take 20 months to recoup that amount to make it worth the refinance. But if you plan on selling your home in that time frame it is not worth it. On a FHA Streamline the loan amount can’t be raised so the analysis is easy, if you save money it is worth it to do.
So how do you get started? Well that is easy simply give us a call, it is free, and could save your thousands of dollars. Our phone number is (916) 672-6130 or Click Here and fill in the simple questions and we will contact you. We can only refinance California properties as that is where we are licensed to do business.