Homeowners Should Consider Refinancing Due To Low Rates

This article is about Homeowners Should Consider Refinancing Due To Low Rates

Homeowners Should Consider Refinancing Due To Historic Low Rates. Refinancing May Save You Thousands:

• Mortgage rates are still at an all-time low and homeowners should seriously consider refinancing their current mortgage loans to see if there is a net tangible benefit
• Many homeowners do not realize that their homes have drastically appreciated in the past few years
• Many homeowners are able to do a cash-out refinancing mortgage loan
• Homeowners can use the excess cash to pay down high credit card debt, use it as reserves, use it for a vacation, do the necessary home improvement that you have been waiting many years for, start a college education fund for your children
• Or use it for investment where you can multiple your investment returns instead of keeping it in the bank
• Homeowners can just do a rate and term refinancing mortgage just to reduce their monthly payments and save thousands on the lower interest rates from their new refinance mortgage loan

In this article, we will discuss and cover Homeowners Should Consider Refinancing Due To Low Rates.

Homeowners Should Consider Refinancing Due To Many Benefits

There are rules and regulations for a mortgage loan originator to refinance your mortgage loan.

• A licensed mortgage loan officer can only refinance your mortgage if and only if there is a net tangible benefit to you as a homeowner
• By net tangible benefit, you as a homeowner needs to have at least a 5% or more reduction of your housing payment after the refinancing mortgage
• The first and main reason why homeowners do refinancing on their home loans is due to the mortgage rate reduction
• By doing a rate and term refinance, many homeowners can save hundreds of dollars in interest expense and can greatly reduce their monthly housing payments

This can mean tens of thousands in savings over the life of the mortgage loan.

FHA Streamline Refinance Mortgage

If you currently have an FHA insured mortgage loan at a rate of 4.75% or higher, you may do an FHA streamline refinance mortgage loan:

• With an FHA streamline refinance, no appraisal is required, no income verification is required so the debt to income ratios will not be an issue
• No credit minimum is required so you can have bad credit as long as you have been timely on your mortgage payments for the past 12 months
• FHA has also lowered the FHA annual mortgage insurance premium from 1.35% to 0.85% on FHA 30 year fixed rate mortgage loans
• This new rule on the FHA annual mortgage insurance premium reduction is effective January 26, 2015

This is a huge saving for FHA borrowers.

Homeowners Should Consider Refinancing With Cash-Out Refinance

Homeowners with equity in their homes can do a cash-out refinance mortgage loan.

• Cash-out proceeds from a refinance mortgage are tax-free and you can use the proceeds to pay off high-interest credit cards, high-interest debt, investments, start up a child education fund, or other ways that may suit you with no questions asked
• The maximum cash out on an FHA insured mortgage loan is up to 85% loan to value
• You need to wait six months to do a rate and term refinance FHA loan from the home purchase date

You need to wait one year from the home purchase date to do a cash-out FHA refinance mortgage loan.

Waiting Period To Refinance After Home Purchase On Conventional Loans

With a conventional loan, the waiting period is six months from the date of purchase to either do a rate and term refinance mortgage loan or a cash-out conventional refinance mortgage loan.  A maximum loan to value for a cash-out refinance conventional loan is 80% loan to value.

For more information about this topic, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or mail us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.