• Reduce Monthly Mortgage Payments
• Security of a Fixed Rate Home Loan
• ARM (Adjustable Rate Mortgage) Savings
• Take Cash Out
• Eliminate Mortgage Insurance
• Reduce Monthly Mortgage Payments

Home mortgage refinancing can be a great way to lower monthly mortgage payments. There are two prime ways to accomplish mortgage refinancing. The simplest reason for home mortgage refinancing with a new home loan is because most lenders are offering a lower current interest rate than your existing mortgage. In fact, a drop of just a half to three quarters of a percent in mortgage refinancing can lower your payment significantly.

You can also lower your mortgage payments through mortgage refinancing by changing your mortgage term. Switching from a 15 to a 30-year home mortgage refinancing term can significantly lower your monthly payment. If long-term savings is your prime goal with home mortgage refinancing, you may be able to save thousands of dollars over the life of your loan and pay off your loan much sooner by reversing this process and switching to a shorter loan term with mortgage refinancing.

With rates near historical lows, this may be a perfect time to save with home mortgage refinancing. To have one of our lending partners help you evaluate potential savings with mortgage information, simply fill out our 1 Step Mortgage Home Loan Request Form.

Security of a Fixed Rate Home Loan

The benefit of an adjustable rate loan is the reduced interest charge. Conversely, the danger is that when interest rates rise, the borrower may be forced to pay significantly higher rates. While fixed rate loans will usually have a higher rate than an adjustable at the outset, they aren’t subject to shifting market conditions. With rates at near historical lows, this may be time to secure the “peace of mind” provided by locking in a rate for the term of your mortgage.

Your security may be even further enhanced if you expect to be in your home for a long term. To have one of our lending partners help you evaluate Fixed Rate Loans under the currently favorable market condition, simply fill out our 1 Step Mortgage Home Loan Request Form.

ARM (Adjustable Rate Mortgage) Savings

It may make sense to refinance your mortgage into an ARM if you plan on being in your home for only a few years. After all, why pay the higher current interest rate on a 15 or 30 year fixed mortgage, when you can pay a lower rate (Usually, but subject to greater risk) for the shorter period of time you’ll be living in the home? If, however, you decide to stay for a longer timeframe, you may choose to consider the fixed rate loan.

If you already have a fixed rate mortgage and are considering moving within the next few years, it may make sense to consider refinancing into an ARM. Not only can this lower your monthly payment, but by choosing certain loan types, you can refinance your home loan with no out of pocket expenses.

To have one of our lending partners help you evaluate how refinancing into an ARM may be right for your situation, simply fill out our 1 Step Mortgage Home Loan Request Form.

Take Cash Out

Would you like to have money to pay off credit cards and other high interest debt, finance home improvements, buy a new car, finance a second home purchase, pay a college tuition or even go on vacation? If so, perhaps a cash-out mortgage refinance is for you.

Typically, you may be able to take out up to 75% of the value of your home, but with some options this may rise to 90%. Also, unlike borrowing on credit cards, which utilize compound interest calculations, mortgages use simple interest, which may save you significant interest. Moreover, interest paid on mortgages is tax deductible (see your tax professional to evaluate) and this may result in additional savings.

To have one of our lending partners help you evaluate how to CASH OUT, simply fill out our 1 Step Mortgage Home Loan Request Form.

Eliminate Mortgage Insurance

If you purchased your home with less than 20% down, you probably have a monthly mortgage insurance payment along with your principal and interest. But, since your purchase, you probably have increased your equity percentage. In fact, because of rising home values, you may have exceeded the 20% figure simply because your home has become more valuable. Unfortunately, you may not be able to cancel your mortgage insurance yet.

A home loan refinance to eliminate mortgage insurance should be designed to not only get a loan without mortgage insurance, but also to find a rate that is lower than your current loan. The ideal situation would be to reduce your rate by more than just the cost of your monthly mortgage insurance payment alone.

To have one of our lending partners help you evaluate how you might be able to eliminate mortgage insurance and reduce your rate, simply fill out our 1 Step Mortgage Home Loan Request Form.

Some lenders permit or may require borrowers to pay for additional costs above and beyond the principal and interest on the mortgage loan and usually includes real estate taxes and property hazard insurance. The estimated yearly cost for taxes and insurance is divided into monthly amounts and added to the cost of principal and interest on your mortgage loan. The amount collected monthly for taxes and insurance is placed into an account called an escrow account and is paid once a year when due. When escrow is used, a monthly payment is often referred to as a PITI payment (Principal, Interest, Taxes, Insurance).

Some lenders may require an additional payment for private mortgage insurance. Whether or not your mortgagor will require you to pay for PMI will depend on the type of mortgage you have and how much vested interest, equity, you have in your home.

How to Qualify for a Loan

When considering your application, mortgage lenders are primarily concerned with your ability to repay your mortgage. To determine if you qualify for a loan, they will consider your credit history, your monthly gross income and how much cash you will have for a down payment (most lenders will require anywhere from 5 percent to 20 percent of the purchase price of the home). A mortgagor will calculate your debt to income ratio when considering your mortgage application. There are two ways to do this. Generally, your monthly mortgage payment (including principal, interest, taxes and insurance) should not exceed 28 percent of your gross monthly income. Additionally, all of your debt (including car loans, mortgage payment, child support or alimony, credit cards, student loans, etc.) should not exceed 36 percent of your gross income.

Types of Mortgages

Lenders offer several types of mortgages, but the most common are fixed-rate mortgages. These loans feature fixed rates and set monthly payments, generally for 15-year and 30-year periods. They’re popular because managing a monthly budget is easier with set payments and they are affordable when interest rates are low. However, if you are planning on owning your home for a short period of time (less than five years) or if interest rates are high when purchasing your home or refinancing and you think they will fall, then an adjustable rate mortgage (ARM) might suit your needs. Adjustable rate mortgages differ from fixed rate mortgages because after an initial fixed rate period, the interest rate on an ARM will fluctuate as the market interest rates change. Adjustable rates start lower than fixed rate mortgages but there is the risk of higher rates over the years. Adjustable rate mortgages are available with different initial fixed-rate periods that range from one year, three years, five years, seven years and even up to ten years before the rates will adjust. Borrowers do have some protection from extreme interest rate increases because adjustable rate mortgages come with caps that limit the amount by which the interest rate can change.

Additional Mortgage Types

Other, less-often used mortgages include: Jumbo mortgages, which exceed the loan limits set by Fannie Mae and Freddie Mac; Two-Step mortgages, which combine elements of both fixed and adjustable rate mortgages; Biweekly mortgages, which are fixed rate mortgages in which payments are made every other week instead of monthly; Balloon mortgages, which give borrowers lower rates and payments for a specific period of time with a large lump sum principal balance payment due at the end of the balloon period; Assumable mortgages, which permit homeowners to “hand-off” the loan to a buyer instead of paying it off at the time of sale; Subprime mortgages, which are generally approved for home buyers or owners with less than perfect credit; and Construction mortgages, which are issued to people to build their home instead of purchase an existing home.

LendingLeaders will match you with lenders who will work with you to help decide what mortgage options are right for your situation. To have one of our lenders contact you, simply fill out the 1 Step Mortgage Home Loan Request Form.