Chicago Mortgage Refinance- The Risks Associated with Refinancing

Chicago Mortgage Refinance Lending Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers Chicago mortgage refinance loan process for homeowners. Many homeowners refinance mortgage loans because they want to reduce their mortgage rates thus lowering their monthly payments. In this article, we will cover and discuss the benefits of refinancing a home mortgage during these times of historic low-interest rates.

Mortgage refinancing is a process in which a homeowner replaces their existing mortgage with a new one, typically to get better terms or lower interest rates.

In the following sections, we will cover some key points to consider when thinking about mortgage refinance. One of the most common reasons for refinancing a mortgage is to secure a lower interest rate. A lower rate can result in reduced monthly payments and potentially save you money over the life of the loan.

Cash-Out Refinance

Some homeowners choose to do a cash-out refinance, which allows them to borrow more than the current mortgage balance and receive the difference in cash. This can be used for various purposes, such as home improvements, debt consolidation, or other financial needs. Refinancing also provides an opportunity to change the length of your mortgage term. For example, you can switch from a 30-year mortgage to a 15-year mortgage if you want to pay off your loan faster.

Chicago Mortgage Refinance Fees and Closing Costs

It’s important to be aware that refinancing typically involves closing costs and fees, similar to when you initially purchased your home. You’ll need to consider these costs when evaluating whether refinancing makes financial sense. Lenders will assess your credit score, income, and other financial factors to determine if you qualify for refinancing and what interest rate you’ll be offered.  Lenders may also consider the current value of your home and the amount you want to refinance when making lending decisions. A favorable LTV ratio can help you secure better terms.

Shop Around for Lenders For Lowest Rates

It’s a good practice to compare offers from multiple lenders to find the best deal. Different lenders may have varying interest rates and terms. The timing of your refinance can also impact the terms you can get. Interest rates can fluctuate, so it’s essential to monitor market conditions and choose the right time to refinance.

Check your existing mortgage agreement for any prepayment penalties that may apply if you refinance before a certain time.

It’s advisable to consult with a mortgage professional or financial advisor to assess your specific situation and determine whether refinancing is a wise financial move for you. Keep in mind that the decision to refinance your mortgage should align with your long-term financial goals and considerations. It’s essential to weigh the potential benefits against the costs and requirements associated with refinancing. Find lenders for lower rates for your mortgage, click here

Save Chicago Mortgage Refinance with Lower Rates

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There are still millions of homeowners in the United States that have mortgage rates higher than 6% where they can lower their mortgage rates and lower their payments by simply refinancing their current home loans. Chicago mortgage refinance solutions would save them thousands of dollars.

Homeowners with an FHA loan can explore doing an FHA Streamline Refinance with no appraisal, income, credit. Refinancing can save tens of thousands of dollars during the course of a 30 year fixed rate mortgage loan.

The Team at Gustan Cho Associates can help homeowners with a Chicago mortgage refinance!. Unfortunately, there are a substantial of homeowners that run into problems during the refinancing process and ultimately their refinancing process comes to a halt.

Risks With Chicago Mortgage Refinance

What could be the risk of refinancing a Chicago mortgage?One of the major hurdles that stop a refinancing mortgage loan from closing is when the home appraisal comes in lower than anticipated. Recently, I had a Florida mortgage refinance loan that could not go through. This was because the home appraisal came in substantially lower than anticipated. Low home appraisals are one of the risks associated with refinancing.

The homeowner did research comps and went to websites like Zillow and Redfin. Comparable came in around the $800,000 mark: But the home appraisal came in at $650,000.

My client submitted all the proper paperwork: Her completed signed mortgage application was approved by our underwriting department and we had a clear to close. Unfortunately, her appraisal came in at $650,000. This value was well below everyone’s expectations including the lender. The low appraisal halted the refinancing process . The homeowner needed a minimum of a 75% loan to value on her Florida home in order to proceed with the refinancing. The $600,000 appraisal was pretty much worthless for her refinancing needs.

Home Appraisal For Chicago Mortgage Refinance

A home appraisal is not a science. It is the accumulation and interpretation of that raw data by the appraiser to produce a value of the subject property. If you had three appraisers value a particular home, the chances are that you will get three different values. Due to the real estate and credit market crash of 2008, new regulations were implemented in the mortgage industry that included the appraisal process. Contact us to get a mortgage in Chicago, Click here

Low Home Appraisal Can Be Issue

The bottom line is that if you are refinancing your home, you need to be prepared for a low-value appraisal. There are solutions on contesting a low appraisal. Homeowners can order another appraisal. Or can contest the appraisal. If you can get comparable of similar homes that sold in the nearby area, chances of getting appraisal contested are great. If you can find a home down the street from you that sold to the estimated value of your home, your appraisal will probably definitely be reversed to your favor.


This mortgage blog post article has been updated on January 12th, 2024.

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