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Refinance
If one or more of the above describes you, you would most likely benefit from refinancing. However, if are planning on moving in the next few years, you will not be able to fully reap the rewards of refinancing and another type of loan would make more sense.
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Imperfect Credit
An adjustable rate mortgage is often chosen by borrowers with damaged credit
because of the following benefits:
- Lenient qualifying standards
- Low introductory rates
- Varied options for adjustment periods, allowing your rate to remain the
same for anywhere from one year to five years.
- Rate ceilings to keep your interest rate from rising to high
- Lower initial payments generally prompt lenders to approve larger loans
- When interest rate indexes fall, an adjustable rate falls as well, unlike
a fixed rate, which does not allow the borrower to benefit from dropping rates
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Home Construction Loans
Home construction loans are unique because they are often considered two loans, one for construction and one for permanent financing. However, a Construction-to-Permanent loan or a One-Time-Close loan combines the two, making the loan process simpler and less expensive for the borrower. Combining the construction financing and loan amount reduces the cost to the borrower by eliminating a second set of closing costs, as well as the requalifying process.
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Rates
There are several indexes on which interest rates are based:
- The Prime Rate is used by lenders for corporations and for their credit-worthy
applicants. It is very stable and tends not to differ from bank to bank. The
Prime Rate is used to predict the direction of rates, and the activity of
consumer loans often follows that of this index.
- U.S. Treasury Security Yields is an average of monthly rates during the
length of a one year U.S. Treasury security that is often used to set adjustable
rate mortgage and is published yearly by the Federal Reserve Board.
- The 11th District Cost of Funds is also used to set adjustable rate mortgages
and will often follow the same direction as the average of a one-year U.S.
Treasury security. Monthly, the 11th Federal Home Loan Bank District, which
includes California, Nevada and Arizona, publishes its weighted average interest
rate for the prior month.
- Federal Funds Rate is set by the Federal Open Market Committee and is the
interest rate on funds one bank lends to another overnight. This index affects
inflation and economic growth, and is decided on by the Federal Open Market
Committee.
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Mortgage Calc
Whether you want a loan to buy a new home or to refinance your current mortgage, a mortgage calc can help you decide what kind of loan is worthwhile and what cost you too much in the end. A mortgage calc can show you the difference a shorter term, a slightly lower rate, or an occasional extra payment can make on your loan and your finances. Use our mortgage calc to find out more or fill out our free short form to contact up to four lenders about finding a new mortgage or refinancing your existing loan.
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Mortgage Refiancing
Mortgage refinancing is the repayment of a current mortgage using a new mortgage. This new mortgage should have an interest rate at least 2% lower than the original rate or else it may not be worthwhile for the homeowner. By obtaining a loan with a lower interest rate, you should be able to save hundreds, if not thousands the time your loan is paid off.
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Refinancing Your Home
Some homeowners are discouraged by the thought of paying new closing costs as a result of refinancing, but these costs can often be rolled over into the total amount of the loan, resulting in little or no out of pocket costs for the borrower.
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