California First Time Homebuyer - Advantages of Buying vs Renting

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4 Tips To Help You Get The Best Home Loan Mortgage Rate Refinance

Thanks to recent cuts in interest rates, it is once again possible for you to obtain one of the best home loan mortgage rate refinances for a low interest rate on your own home mortgage loan. Although it can be difficult to get a mortgage these days regardless of your credit, it is still possible to do so, and it may still be possible for you to get the best available mortgage interest rate when you refinance your home loan.

If you are trying to get the best mortgage refinance rate, it is important to keep the following tips in mind. It really is amazing how much money you can save with an interest rate that is even just a few tenths of a point less than normal. You could easily help your monthly cash flow situation by obtaining a lower interest rate, and the following tips should help you obtain the best rate possible.

1. Your interest rate is a reflection of your perceived risk to your lender and is based on specific detailed formulas that were developed for this very purpose. One of the biggest determinant factors in your interest rate is what your FICO score is, because your credit score is a detailed picture of your credit risk. In order to obtain the best available mortgage rate, you need to aim for a credit score of 720 or higher. If your score is much lower than this, you may not be able to refinance at all, let alone be able to score a decent interest rate.

2. Your debt to income ratio is another determining factor in whether or not you can obtain the best home loan mortgage rate refinance. Debt to income is actually often overlooked. If you have too many payments to make; cars, house, boat or credit card, you absolutely must rid yourself of some of it if you want to score a decent interest rate on your mortgage refinance.

3. When you are trying to score the best refinance interest rate, you must be willing to negotiate with your lender for a better deal. You might actually be able to receive a better interest rate and lower loan fees. You will never be sure if you do not try, so give it a shot. You may very well be pleasantly surprised.

4. Another way to ensure that you score the best rate is to obtain multiple offers before you settle on the right one. There are a large number of lenders to choose from, so you should obtain multiple offers and quotes for your refinance before you settle on one lender. Compare the fee structure, the loan amount and the rate, and then select the lender that seems to have your best interest in mind.

Keeping these pointers in mind should help you secure the best home loan mortgage rate refinance that you can. It may take time to improve your credit score or to find the right lender, but the process is worthwhile when the results are desirable. The money you save will be in your pocket and not the bank's.

Mortgage Refinance - Is Your State Super Valuable?

Property in certain states is viewed as super valuable when seeking a mortgage refinance loan.  For example, the size of the economy in the state of California is attractive to lenders that are funding mortgage refinance loans. As home to the core of the entertainment industry, and boasting prosperous agricultural, aerospace, petroleum, computer, and information technology industries, California ranks among the ten largest economies in the world.

California's scenery is diverse including lush landscapes, vast metropolitan areas, gorgeous beaches, and rolling mountains. Property in California includes single family homes, multi-family units, beach homes, mountain homes, luxury estates, downtown lofts, urban living, and some of the most sought after and exclusive gated communities in the country. With a slightly younger population than the rest of the U.S., approximately 37 million residents call California their home.

So from a lender's perspective, in a state where there is a booming economy, a relatively younger demographic, and steady population growth, real estate in California is super valuable, and becoming more and more valuable as the years go by. Because of this trend, they are willing to offer residents a mortgage refinance loan in order to be named the mortgage lender for your property... why?

Well it's like this - the mortgage company technically owns your home until you pay the mortgage loan back, which takes an average of 15-30 years. During that time, your home becomes a great asset as its value increases. It is a lender's desire to have that asset (your home) as a part of their net worth, and not their competitor's. In exchange for the opportunity to serve you, lenders will refinance your loan and offer you the lowest interest rate they are able to offer.

Use their desire to your advantage. You may not know it, but you may live in a state where lenders see real estate as being extra-valuable too.  Check on a mortgage refinance in your area. You may find that by refinancing your loan, you can save a significant amount of money.  Why give your hard earned money away to a lender that is overcharging you interest, when you simply do not have to?

-Ken S.

© 2009

Lowest Home Loan House Refinance Mortgage Rates in The US

If you're fortunate enough to be a US homeowner, you probably know that your home is worth more money now, than when you first bought it. How can you cash in on the rising home values? Simple, the way to access the built up equity in your home is with a low cost refinance mortgage loan.

One of the great things about a refinance loan is that you can use it for anything you want. Maybe you have some high interest credit cards or high interest loans you would like to pay off. Or maybe you'd like to get a cash out refinance loan to make some home improvements or buy a summer cottage.

Whatever your reasons for wanting to refinance your current mortgage, their are lenders ready to give you the lowest possible interest rates on your new loan. All you have to do is submit one easy application, and first rate U.S. banks will be competing for your business.

Getting refinance quotes from competing lenders is the best way to get the lowest mortgage loan rate and lowest monthly payment. Your online home loan application will have lenders to bidding against each other, to give you the lowest refinance mortgage rate possible. You just pick and choose from the offers you receive.

Shopping for mortgages and home loans online has quickly become the preferred method of finding home financing and refinancing. Apply online today, and see how low your mortgage rate can go.

Refinancing for Home Improvement

You are a homeowner. You have almost everything you need except you might want to improve your home just a tad bit more. If you are considering home improvement, refinancing is a good choice.

In a typical refinance transaction, you'll start the process by applying for a second loan or first mortgage to cover the improvement costs. Home equity loans and lines of credit are viable options that you can go with in order to get some extra money into your home. Everyone wants to get a better return from their real estate investment when they sell it. You can achieve this by refinancing and doing some upgrades or improvement. Moreover, it can give you more comfort in the home, improve your credit from the new loan, and possibly additional monthly income if you were to add another bedroom and occasionally rent it out.

When deciding to refinance your home, you need to consider several factors initially. The first thing to realize is that you are not taking your home out of the market. If home values in your area are higher than your home present worth, then upgrading is a wise choice. If your home is already at the high end, then refinancing and putting in more improvements may not yield the substantial appreciation you desire. So, you should research this information and make sure it is to your advantage.

Secondly, if you are refinancing your home loan in order to consolidate debts or improve your credit; make sure that your existing finances such as income are stable enough to allow you to pay off the new mortgage loan. Since late 2005, lenders have tightened their credit lending standards which makes home financing a little more difficult to secure. Those no income verification and no doc loans are not so abundantly available anymore. However, if you are diligent enough you can find some lenders and brokers who still offer it in these times. What's required nowadays for no income loans is typically a larger down payment from five to ten percent for purchases and the same equity percentages when refinancing plus verified liquid assets in case of emergency.

ARM Mortgage Loans - The Upside and Downside

ARM mortgage loans or Adjustable Rate Mortgages are loans that have an interest rate that "adjusts" after an initial fixed rate period. How often arm mortgage loans adjust, depends on the terms of the loan.

Adjustable rate mortgages are considered to be riskier than the traditional 30 year fixed rate loans because if interests rise at the specified reset time your monthly mortgage payment will also rise. If you do not budget properly the increased monthly payment may be too high for your present financial situation causing you to default on the loan.

ARM mortgage loans are popular because they have an initial period of lower interest when compared to fixed rate loans. This often allows a borrower to qualify for "more house" than they would with a fixed rate loan. Again, the risk is that if the loan resets at the specified period of 1, 3, or 5 years to a higher interest, the monthly payments will also rise.

Eighty percent of all adjustable rate mortgages fluctuate based on a complex algorithm of indices from one of these three indexes: 1) the 11th District Cost of Funds Index (COFI), 2) the London Inter Bank Offering Rates (LIBOR) and 3) the Constant Maturity Treasury (CMT) Indexes.

Since ARM loans have the ability to reset at a higher rate than the initial fixed rate, why is this a popular loan for many borrowers? The initial low interest is one factor and another factor is that the risk can be mitigated somewhat by "caps" on the rate swings that are inherent in the loan.

Caps on ARM loans occur on two parts of the loan: the predetermined reset periods of 1, 3 or 5 years and the life-of-the-loan term. The reset period cap restricts the amount the rates can change, up or down, in any given period of time and the life-of-the-loan cap restricts the amount the rate can change, up or down, for as long as the mortgage exists.

Adjustable rate mortgages will continue to be a popular type of loan because they are easier to qualify for and the lower fixed rates are very enticing. If interest rates only gradually increase over time and the borrower's income gradually increases there is little risk in this type of loan. If interest rates drop then this type of loan can save the borrower a significant amount of money over the life of the loan. ARM loans have proven to be a valuable resource in the mortgage industry.

It is only when a borrower procures an ARM and is at the extreme limits of his or her borrowing capacity that disaster can ensue. If the ARM resets at a higher rate than the borrower can repay monthly, foreclosure may be the result. Make sure you are completely aware of the terms of ARM mortgage loans, including planning for increased rates, before you sign a contract. If you educate yourself for all the contingencies of this type of loan then you will be prepared to benefit from its advantages.

Home Mortgage Refinancing - Why Do People Choose This Path

Overview

A home mortgage refinancing is an option open to homeowners with equity in their home that is accessible in the form of cash. Homeowners can obtain a loan which essentially means the amount of equity that is in their property can be removed in the form of cash or payoffs of debts. The additional equity funds are usually borrowed at a lower interest rate, similar to the interest rate paid on the home. This loan replaces the high interest credit card debt that would otherwise be paid. Another reason to refinance the mortgage is pay a lower monthly payment on the existing loan.

Pay off debts

Sometimes small debts add up. Maybe you purchased a new appliance on a store card when the old one broke down. You may have had to put a tooth extraction on your credit card. You took a trip to the Bahamas and spent more than you planned on food and entertainment while there. Whatever the reason, you find that your credit cards are all maxed out and the penalties and late fees are costing you hundreds of dollars each month. Some home owners use a drastic plan called home mortgage refinancing in order to pay off a number of outstanding debts that create stress each month when the income won't cover the outgo for these bills.

Put your child through college

Another great use for the cash you can obtain by a home mortgage refinancing is to educate your children. College bills are overwhelming today and in order to avoid starting off a career with thousands of dollars in college debt, many homeowners are accessing the equity in their homes to pay for the education of their children. The interest rates are equivalent between a student loan and a home equity loan, so either method is a benefit to your education debts.

Take a vacation

Sometimes you have planned a scrimped for a vacation of significance for years and it just hasn't come together for you. If the children have all left the nest and your business is doing well, a month long cruise in the Bahamas may be just the thing to start on the new phase of your life. Obtaining home mortgage refinancing through borrowing against the equity in your house to pay for your vacation is certainly less expensive than putting the costs on a credit card. If you shop for a better interest rate, you can even end up with a lower monthly payment than you were previously paying.

Remodel your home

Another good use for the cash you obtain through home mortgage refinancing is to remodel or renovate your home. Perhaps you need new carpets or a better room. The kitchen may look dated or you might have your heart set on adding a pool or a 3rd bathroom off the family room. If you use the equity in your home, you can often access the cash to do these projects with very minimal effect on your mortgage payment.

Reasons to Refinance Your Home

Many people will take whatever mortgage they can get when trying to purchase a home. Sooner or later, you will start wondering if you can get a better deal. Welcome to the world of refinance.

Reasons to Refinance Your Home

Traditional mortgages are like any other loan in one important respect. You can pay them off early, although mortgages will sometimes have prepayment penalties for the first few years of the loan. In the world of real estate, people prepay loans all the time by taking a second loan to do so, better known as refinancing. Why would someone do this? There are a variety of reasons, but here are the most common.

Purchasing a home can be a bit stressful. Between home inspections and the escrow deadline, buyers tend to feel pressure to get any financing they can. As time passes, however, they start to realize they could have obtained a better deal on their mortgage. Even a quarter point reduction in a mortgage interest rate can save thousands of dollars over the life of the loan. With this in mind, they start to look at refinancing their original mortgage to cut down on the total interest paid on the loan.

In tune with this idea, many homeowners also look to refinance to gain cash flow flexibility. Instead of looking to cut the total payments on a loan, they look to find terms that will allow them to lower the amount of the monthly payment. Saving $400 a month on payments puts an additional $4,800 in your pocket each year, which can be attractive if cash flow is a little tight on a monthly basis.

On the opposite end of the scale, many homeowners will refinance to pull cash out of the home. They have built up equity over time and wish to convert that non-liquid asset into funds that can be used for something else. Often, this can be to pay for expenses associated with an emergency situation, such as a health crisis, or to put their kids through college. The reasons vary, but the purpose is the same.

The decision to refinance a mortgage is much less stressful than originating a loan. There is no deadline to act, so you can shop for the best possible deal for your situation.

Should I Refinance My Home Loan?

Refinancing your home can help you prevent foreclosure or mortgage default. But, what is mortgage refinancing? Many homeowners are not aware of what a proper refinance can do for them. Here is a quick explanation of mortgage refinancing.

Mortgage refinancing is basically taking out a new loan, paying off the existing mortgage with the new loan money. Why would this be beneficial to a homeowner? Well, when you refinance you can get yourself into lower interest rates or a better home loan with more favorable terms and conditions. Many homeowners are paying nearly double the interest rate than is available now, and reducing the interest due every month can dramatically decrease the amount you spend every month on your home loan. Also, refinancing offers a way for homeowners to get into a stable, fixed rate mortgage and out of their ARM loans, which so many homeowners have these days.

Who should refinance?

-Homeowners who need a lower monthly payment.

-Homeowners whose credit has improved, or stayed the same, since they purchased their home.
These homeowners can get a better interest rate than they are paying now.

-Homeowners who wish to change the length of their mortgage.

-Homeowners who want to get out of an ARM loan and into a traditional fixed rate mortgage.

Refinancing into lower interest rates, or a shorter loan term, can save a homeowner a lot of money. With so many struggling homeowners across the country, millions can benefit from refinancing their mortgage. A proper refinance will truly offer a homeowner the chance to get a better home loan, interest rates, terms, and conditions.

Refinance Home Loans

Before you look at refinancing your home loan you should ask yourself a few questions, we have looked at a few of these below:

1. Work out exactly how much it will cost you to refinance your loan. Remember these aren’t just the direct costs associated with refinancing your loans, you will also have to pay for the insurance. There are many different refinance calculators on the internet that you can use to work out exactly how much your refinancing will cost you, you can then decide whether or not it’s worth it.

2. There are a number of reasons to refinance your loan, one of the most popular is to get better loan terms. You should be able to get a shorter term for example, you may be able to pay your mortgage off within 15 years, as opposed to your current 30 year loan for example. Refinancing doesn’t always save you that much money, however if you are doing it to get better terms it can defiantly be worth doing.

3. You should include all of the loans closing costs in your figures when working out the costs of the loan. You should remember that if you do not pay the closing costs upfront you will have to pay the interest on the value of these closing costs over time. Make sure you remember to include this interest in your loan calculations.

4. You should find out whether you will need your home equity line of credit to use in the future. There are great benefits of having an available home equity line of credit which is available for you to use in the future. If you don’t have any savings, then it is quite important to keep as much money available in your home equity for emergencies. If you refinance 100% of your home, and need money for anything else, then there’s nothing else you can do.

When you look into refinancing your home it’s important to ask these questions, otherwise you can run into many problems. It’s important to understand that you should keep enough money in your home in case you ever needed it in the future. If you maximize the amount of money that you borrow against your home, then it means you may be unable to borrow more.

Ideally, you should only borrow as much money as you need. Hopefully by refinancing your home loan, you will be able to get yourself out of numerous debt problems that you may be suffering from.

Remember to look hard for any of the hidden costs as well, don’t forget that if you do not pay the closing costs up front then you will be required to borrow the extra money and so you’ll have to pay the insurance on this amount.