This BLOG On Refinancing Mortgage Guidelines And Tips On Saving Money Was UPDATED And PUBLISHED On September 16th, 2019
Current mortgage rates are not the only reason a homeowner should consider to refinance.
- There are various refinance mortgage strategies homeowners can research and go over with mortgage loan originator
- Homeowners can explore their options to see if they can save money over the life of mortgage loan
- Or if they can reduce monthly mortgage payments
- Homeowners with equity in their homes can explore options in doing a cash-out refinance mortgage
- Borrowers can see if they can Refinance FHA Loans With Conventional
In this blog, we will cover and discuss refinancing Mortgage Guidelines And Tips On Saving Money.
Changing Terms Of Refinance Mortgage Terms
If borrowers financial situation is better than when they purchased their home and they can afford to make a higher mortgage payment than current mortgage payments, borrowers can save tens of thousands, if not over six figures depending on balance, by refinancing 30-year fixed-rate mortgage loan to a 15 year fixed rate.
- 15-year mortgage rates are much lower than 30-year mortgage rates
- 15-year mortgage terms are a few hundred more dollars a month in housing payments
- If borrowers can shorten their terms from 30 years to 15 years, mortgage lifespan has been reduced in half
- Borrowers can save tens of thousands in interest savings
The mortgage loan originator can do an analysis of the savings and new mortgage payment.
Refinancing To Lower Mortgage Payments
Another reason to refinance is if borrowers are currently struggling with mortgage payments and need to lower monthly payments.
- Borrowers who currently on a 15 year fixed rate mortgage can refinance it to a 30 year fixed rate mortgage
- Borrowers who are on a 30 year fixed rate mortgage and need to reduce mortgage payments can refinance current mortgage loan to a 5-year adjustable rate mortgage (ARM)
- mortgage rates on ARM’s are substantially lower
Eliminating FHA Mortgage Insurance Premium
Homeowners who currently have an FHA insured mortgage loan might want to consider to refinancing FHA loan into a lender paid mortgage insurance conventional mortgage loan.
- There is no mortgage insurance premium with Lender Paid Mortgage Insurance Conventional Loans
- FHA mortgage insurance premium is 0.85%% of mortgage balance amount and eliminating the MIP will be a substantial savings
On the flip side, borrowers who currently have an adjustable-rate mortgage and are worried about mortgage rates rising can refinance from an adjustable-rate mortgage to a fixed-rate mortgage. This way, they are locked with a fixed mortgage rate for 30 years.
Cash-Out Refinance Mortgage Loans
Homeowners with equity in their homes can consider cash-out refinance mortgage loans.
- With a cash-out refinance mortgage loans, homeowners can consolidate all debts they are paying higher interest on
- Cash-out refinance mortgage loans do have slightly higher mortgage rates
- It does require that homeowner have equity in their homes
Sometimes paying a slightly higher mortgage rate on a cash-out refinance mortgage loan may be well worth it if paying down higher interest rates debts such as credit cards, installment loans or automobile loans.
Lowers Rate With VA Or FHA Streamline Refinancing Mortgage
Veteran Homeowners with a current VA Loan can do either a VA Streamline Refinance (IRRRL) where no income docs are required, no credit scores required, and no appraisal required. FHA also has FHA Streamline Refinance Loans where no income, no credit, and no appraisal is required.
Most homeowners go through refinancing their current mortgage loan so they can get a lower rate and reduce their monthly payments.
- Refinancing out of current FHA insured mortgage loan into a conventional mortgage loan will save homeowners tens of thousands of dollars over the life of the loan
- FHA streamline refinancing will shorten the refinance process
- VA Streamline Refinancing Mortgage Loans shortens the VA Refinance Mortgage Process
- There are no income verification and credit scores required and no appraisal is needed on both FHA and VA Streamline Mortgages
- Homeowners can have late payments and income reduction as long as they have been timely on mortgage payments on both VA and FHA Streamline Refinancing
Homeowners who need to qualify for refinancing mortgage with a direct lender with no lender overlays on government and/or conventional loans can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org.