Home mortgage refinance is the process of taking a mortgage on the same property which was used as collateral for another mortgage. The loan obtained on the second mortgage can be used to clear the first mortgage. This enables the borrower to convert a high-interest mortgage loan in to a low-interest loan, thus saving considerably on the monthly payment as well as overall interest. With low interest rates, many people are refinancing their home mortgages.However, refinancing is not a very good option if you are planning to move out of the house soon, or sell the house. Also, consider the other costs involved in refinancing, such as pre-payment fees for the previous mortgage, transaction fees of the new mortgage, settlement costs, discount points & so on. Ensure that these costs are lower than the actual benefits from refinancing.
There are several home mortgage refinance brokers. It is very important to use the services of only registered brokers who have experience in refinancing. Refinancing procedures and laws are different for different states. A broker would be able to provide the right guidance for getting the best refinancing deal since he works with a number of lending sources. Services include pre-underwriting, access to a variety of lending programs, professional loan processing, redirecting the loan (if necessary), and others
There are exclusive mortgage brokerage agencies as well. Most of them have links with brokers in other states, thus enabling nationwide services. A borrower needs to fill in a simple application form that includes the type of mortgage and terms of the loan, property information, and purpose of the loan, borrower information, employment information, assets and liabilities, monthly income and combined housing expenses, declarations, and other information for government monitoring purposes. These applications can also be done online. The Internet is a very good source for comparing home mortgage refinance loan rates.
Things most lenders will require include income verification, information on debts and assets, account numbers and balances for savings and investments, a title search, copy of the site survey and a property appraisal. Possible fees and charges include an application fee, title search and title insurance fees, appraisal costs, loan origination fees, discount points, and legal services fees.You can lower your rate by paying 'discount points' up front. Discounts points are essentially pre-paid interest; the more you pay now, the less you have to pay in regular monthly payments. Thus, loans with no points will generally carry a higher interest rate, all other things being equal.
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