The ADvisor asked:


With the interest rates dropping I think I could really save some money every month on my mortgage if I refinance, but are banks hesitant to lend right now with the financial crisis? What are your thoughts? Thank you!

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Jane Hale asked:


Knowing when to refinance and not to refinance is difficult for every homeowner, but after bankruptcy, the decision gets even tougher. There are a lot of different things that should factor into your evaluation, including your current finances, your credit score, and your ability to get approved. Here are a few tips to help you decide whether or not you should refinance your Oklahoma mortgage after bankruptcy:

Evaluating Your Finances

There are many advantages to refinancing a mortgage after bankruptcy. You may be able to get a lower rate, a lower payment, rebuild your credit, or get cash back at closing. Unfortunately, it will cost you to refinance. On average, Oklahoma borrowers pay $3,181 to close on a mortgage loan. If you can’t afford to pay for your refinance upfront or if this amount of money won’t override the amount you will be saving, refinancing may not be the best thing you can do for your finances.

Understanding Credit and Interest Rates

Finances aside, there are two other factors that will prove to be most important when deciding whether or not it is the right time for a post-bankruptcy Oklahoma mortgage refinance. These factors are your credit score and interest rates. The rate that lenders charge you will inevitably be affected by your credit score. The lower your score is, the more the refinance will cost you in interest. Before making the decision to refinance, you need to understand exactly where you stand with your credit score and how it will affect the rate that you are required to pay.

Getting Approved

Surprisingly, getting approved for an Oklahoma mortgage refinance after bankruptcy isn’t that difficult. As long as your house isn’t worth less than the amount of your current mortgage, you shouldn’t have much of a problem. Most lenders, especially those in the sub-prime industry, will be more than happy to work with you to get you the refinance loan you’re looking for.



Arthur

Martin Lukac asked:


Refinance is one of the most convenient ways to repay a loan because refinancing means to apply for another loan to pay back a previous loan on the same mortgage. The most common mortgage is generally one’s home.

Refinance advantages -

“Refinance reduces the risk of losing ones property.

“Refinance can lower the interest rates on the mortgage and thus reduce the monthly payment of interest with the principal amount. This way the borrower can save a lot of money and utilize it in other resources. If savings increase it also helps the borrower to pay back the loan before the closing of the loan term.

“If the original loan had an adjustable loan rate Refinance helps the borrower to change the loan rate type to fixed loan rate thus reducing the risk on the part of the borrower. This process also lowers the interest rate because when it’s fixed it remains at the same level and does not change with the prime index rate of the market.

“Refinance also allows the borrower to utilize the equity accumulated in the house or any other real property in concern in the term of ownership by turning the equity into cash.

Refinance loan can be opted for at any point of time and there are no special requirements for it. The procedure of taking the loan is the same as taking any other loan in most of the banks. But still the borrower is suggested to take prior information from his bank before applying for the loan.

Refinance loan may have a fixed rate of loan interest and an adjustable rate of loan interest. It is wise enough to select a fixed rate of loan interest as the rate of interest remains static for the life of the loan thus reducing the monthly payments. The adjustable rate keeps on changing and also increases the monthly payments of interest and the borrower’s expenditure. The rate of interest may vary from bank to bank and it is profitable to do a thorough research on banks to find out which bank offers the lowest rate of interest with other facilities.

Refinance can be of two types as given below:

1.Cash out 2.No closing cost

In case of cash out refinance the monthly payments are not surely reduced but the borrower gets other advantages. The borrower can pay off credit card debts, can utilize the money for improvement of home and for medical expenses and so on. This can only happen if the equity in ones home qualifies for the applied amount of loan. Cash out Refinance lets you take an amount of money in loan which is higher than your present mortgage and thus you get the left over money from the present loan. This amount is completely the borrowers property.

No closing cost refinance is suggested only for those borrowers who can pay upfront fees i.e. paying a large part of the loan in the beginning of the term. This reduces the rate of interest of the loan for the rest of the period. Generally the upfront fees are termed as points. The more points you pay early the more beneficial it would be for you in future.



Ashley

Alan Lim asked:


Are you part of the sub-prime home mortgage refinance scenario? Then it’s time to take a good hard look at current trends.

Rising real estate costs

The real estate market has seen a steep rise in the price of houses - with the result that the average home buyer cannot afford to spend such a high sum on owning a new home. Even those persons who are making monthly payments towards the home mortgage refinance are finding it increasingly difficult to cope with rising prices. Interest rates have shot up, further tipping the scales against the homeowner’s favor.

Why the sudden rise?

There are many reasons why interest rates and associated real estate expenses have escalated. For starters, the sub prime market borrowers typically comprise those who have already been rejected as per other more stringent eligibility criteria in the prime market. This means the sub prime home mortgage refinance lenders offer them loans at relatively easier criteria – some of them may even imply lesser documentation and background checks on the borrower. Even those borrowers who have a relatively lower credit score maybe approved under the sub prime market home mortgage refinance lending process.

The real estate segment is hurting

Delinquencies and default patterns are at an all time high. Foreclosure and Real Estate Owned is a common phenomenon these days in the home mortgage refinance scenario. Why this is happening can be predominantly attributed to the re-adjustment in rates. Usually the sub prime home mortgage refinance lenders attract borrowers with a low promotional rate. When this rate shoots up after the promotional stage, it’s a nightmarish situation for borrowers and lenders. The borrower finds it impossible to pay up and the lender finds it virtually impossible to recover the money. This is also known as predatory lending – it’s quite similar to hunting for a prey by luring with attractive rates of interest. Once the unsuspecting customer has been caught in the web, there’s no escape and the home mortgage refinance lender extract every possible penny from the borrower. What this means from a long term perspective is that investors lose trust in the home mortgage refinance lending company. This can affect the prime market and potentially qualifying borrowers may not qualify in the prime market. This way home sales deteriorate and real estate suffers.

Growing competition

With the recent decline in home sales, most home mortgage refinance lenders are skeptical on future profit margins. They prefer to be less optimistic about the future trends in the sub prime market. However this has not stopped lenders from fiercely competing with each other. In fact, competition has now escalated because in the dwindling home mortgage refinance market, every lender wants to make a quick buck or two.



Allison

Alan Lim asked:


A home mortgage refinance may just be the best financial decision you can make. However, refinancing is not for everyone. It is mostly a matter of right timing. This result to the unending question for homeowners everywhere: when is it exactly right to refinance?

There are many guidelines which can determine whether now the best time to get a home mortgage refinance is. However, despite all these guidelines, what actually determines “right timing” is dependent on your own financial situation. There are a number of signs which are indicative of ideal refinancing conditions. Here are some of them:

Refinancing to cut costs. When interest rates are dropping, it may be good to take on a new mortgage. The rule of thumb states that a difference of at least 2% should be followed for a home mortgage refinance to be worth it. Refinancing will result to either lower payments you need to pay monthly, or a shorter loan term to repay the entire money you owe. Either of these can save you money in the long term. However, take note that interest rates should never be the sole determining factor to influence your decision. Make sure you consider closing costs, fees and charges and find out if you will be end up paying more in the long run.

Home mortgage refinance for better loan terms. Many homeowners decide to refinance in order to get out of their current loan. If you have a pending balloon loan payment due soon but do not have the means to pay for it, or if you have an adjustable rate mortgage which is increasing, you may resort to refinancing to spare yourself of an even bigger trouble. You can choose to revert to a fixed rate mortgage to minimize risks.

The decision to take on a home mortgage refinance should also depend on how long you intend to stay in your home. If you expect to sell your home soon, refinancing may not make sense at all. Also, if you are already halfway through your existing loan, you will barely save anything with a new mortgage loan. However, if you plan to stay in your home for at least the next five years, you will probably have enough time to recoup the refinancing costs you have incurred and actually save you money.

Ultimately, finding the right time to refinance is mainly a matter of proper calculation and estimation based on your individual circumstances and parameters. It should depend on how long you will stay in your home, your financial goals, the current interest rates and good deals offered by lenders.

This is not to say that ideal conditions assure you of a risk-free decision. Refinancing does take some risk as all financial decisions do. However, as in all risks, you can minimize losses if you do your own research and make a wise assessment of how your home mortgage refinance will lead you to. Refinancing is indeed more than just a matter of timing.



Francis

boobiecat asked:


The first loan is a decent interest rate, but the second is high. Can I refinance just the one to get a lower rate?

Ruby

Cindy Heller asked:


If you are interested in learning how to refinance a home loan, then you should be familiar with that there are a number of important things you are going to have to take into consideration. In the end, in order to make intelligent choices regarding the issue of refinancing a home loan and related matters, you have to be an informed consumer, and this means making yourself as knowledgeable as you can on the matter.

Principally, refinancing your mortgage means taking out a new loan to pay off the original loan that you took out for your mortgage, and in the end the specific purpose is to save by having lower interest rates and as a result paying less in monthly mortgage payments.

It is general knowledge that to get the best in refinancing you will have to make comparisons regarding various lenders although it is also something that can cause a certain amount of misunderstanding. Nevertheless, you will still need to look at different lenders and judge against rates, points as well as fees and also be conscious that even though the rates of interest may be low, it still does not assurance the best option and may even not be the best home loan mortgage refinance.

One more main reason that people refinance home loans is to include a chance to shorten the term of their mortgage, and the prospect to tap a home’s equity in order to finance a large purchase is another common reason.

Securing a low interest rate is unquestionably the most general of all reasons, and as well the most understandable. Reducing your interest rate will not only facilitate by saving you money overall, but as well it increases the rate at which you build equity in your home, and can still reduce the size of your monthly payment, which is great, in particular if you have a lot of other bills that you have to worry about as well.

There are certain situations in which refinancing your mortgage can be amazingly beneficial, but it is essential to understand that this is not true for all situations, and so you need to think about a few different things in order to determine whether refinancing a home loan is a good idea for you or not.

For example, refinancing a home loan would be favorable for you if purchased your home at a time where interest rates were higher and you are now considering refinancing at lower rates. This is for the reason that you will end up saving money by doing so, and so obviously it would be advantageous to you.

Everyone who is interested in refinance loans ought to know about how best to reduce the amount that needs to be paid because it will help you to save money in the process. In consequence, you need to take a peek at your own credit report, see about your current loan, exercise caution about the loan that you agree to, ensure that there are no closing cost refinance loans which frequently belie the claims made by lenders, stay away from paying for appraisal fees or even application fees particularly if your credit history is good, and in conclusion, makes sure that your repayment does not last longer than the lifetime of the product that you buy.

A significant step you need to take when taking into account refinance loan is to have your credit report copy on hand so that you can fix any errors present in the credit report and so lower how much the loan is going to charge you. Subsequently, you must peruse your documentation that accompanies your existing loan and find out if there are charges for prepayment penalties since some companies may ask you to pay fees for leaving them despite the fact that many will also not enforce this clause when you refinance with them.

In any case, prior to selecting refinance loan be certain that you don’t agree to loans that have accompanying pre-payment penalties because there are many refinance loans that do not have such conditions. Along with, be careful not to accept tempting offers that have need of that you accept pre-payment penalties because of the accompanying lower rates of interest offered. It is at all times better to make an informed decision and veering towards the deal in which there is visible profits to be made will always be a better idea.

In addition, there are clear to be closing cost refinance loan which will usually mean higher rates of interest as this is a means for the lender to create money which is why they generally make use of pre-payment penalties. Another feature you should consider regarding refinance loan is that if your credit history is good in that case there should be no need to pay application as well as appraisal fees, and in case a lender asks you to pay these fees, you would be better off looking for refinance loan from elsewhere because there are many lenders who will not charge you other than the recording fees that are merely a small amount that you should not mind paying.

Last but not least, it is by no means a good idea to borrow for longer than the product you want to purchase will last you since otherwise you will end up paying for something that has lost its worth.



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Cindy Heller asked:


Capitalizing on a refinance opportunity can help you save money and it is rather common for mortgage refinance best rates to be lower than the original loan which will be evident when you actually start to compare rates. The tip is that when refinancing a home mortgage, you are receiving a new loan that is of about the same value still you can expect to get mortgage refinance best rates because the refinance rates are going to be lower and will therefore benefit you better and which should see you affect considerable savings.

If you are searching to get a refinance mortgage rate, in that case one of the first things you are going to want to do is find out about what is actually involved in this process. Then you need to take some time and judge against and contrast between the different mortgage brokers so that you can find the best possible deal and value.

There are moderately a few reasons why one ought to refinance loans on homes among which is that it allows you to take advantage of lower rates of interest and it as well allows you to create equity on a home much faster. As a result, before jumping in and choosing refinancing mortgage loans you must first off determine whether it is worth it or not, and in this regard it pays to reflect on reasons for refinance mortgage interest rate.

A refinance mortgage rate is to some extent that is very important to learn about if you own your own home, and unquestionably you have already heard about it before, by a friend or neighbor. By finding a refinance mortgage rate and refinancing your home, you can benefit from lower monthly mortgage payments, and this can cause a big deal of stress to be removed from your life.

While you are looking to refinance, home mortgage rates may be different as much as two percent from different lenders in the same market. Depending on the worth of the property, the neighborhood in which it is situated as well as the credit rating of the homeowner are the most important factors contributing to the refinance home mortgage rates made available to the borrower. Many lenders claim they can offer a loan to everyone, in spite of of their credit history, but the refinance, home mortgage rates may be increased up to the maximum acceptable in the state, which can be up to 30 percent.

There may be special reasons to rationalize trying to refinance, home mortgage rates going down, getting out as of under an adjustable rate mortgage or to get some additional cash for vacation or school. Making home improvements to boost up the property’s value is perhaps the best as once the improvements are made, the value of the home may greatly increase the home’s value as well as up the equity presented.

Regrettably, there are homeowners who will take out a home equity loan just because they can, exclusive of regards to the refinance, home mortgage rates being charged and end up incapable to make the monthly payments. With the equity in their property now owned by someone else, it is doubtful that can have needed funds that may be needed to get out of a financial dilemma.

If an individual purchased their home by means of a variable rate mortgage, when the prime rate increases they may find it unworkable to make their monthly obligation. By taking out a refinance home mortgage, rates may be manageable that are lower than the original loan rates and refinancing may be able to get the payments down to where they are manageable as well as providing a little extra cash for some improvements or a few extras.

On the other hand, if the rate on the original is set and manageable, looking for lower refinance home mortgage rates can repeatedly supply the extra money required to buy a second home or reducing the monthly payments on the first home. The money accessible will depend on the equity in the home plus the amount of the further monthly payment that be absorbed by the available income.

If the homeowner can get refinance home mortgage rates low enough it may be likely to pay down the principal at the same time putting some extra cash in the bank for other purchases.



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