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Mortgage Refinance FAQs

FAQ

To refinance without equity your mortgage loan must fall under the any one of these two scenarios:

  1. Your mortgage must be owned by Fannie Mae or Freddie Mac and had to have been sold to these two entities regardless of whom your current mortgage company is prior to May 2009. This allows you to take advantage of the HARP loan program to refinance with no equity under the making home affordable enhancements to conventional mortgages.
  2. Your mortgage must be an FHA loan or a VA loan to qualify under the no appraisal streamline program. FHA and VA allows homeowners to refinance with no equity regardless of when their mortgage was originated.

Shahram Sondi   July 2, 2016  


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No, you do not need a refinance calculator. Using a refinance calculator is not going to help with getting the lowest mortgage rates.  You need to first shop for the best mortgage rates today and then determine if there is enough savings to justify refinancing your mortgage.  A good rule for determining if the mortgage rate offered to you benefits you is to take the monthly savings in your new mortgage payment and look at how long it will take you to recuperate the closing costs associated the new lower mortgage rate.

Shahram Sondi   July 2, 2016  


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The rates do vary depending on whether you are refinancing your home to solely lower your mortgage rate or planning on cashing out to do home improvement or consolidate debt such as combining your first and second mortgage. Typically, the lowest refinance rates are for rate/term refinance loan where your only objective is to lower the term or the rate on your mortgage without taking any cash out. Lastly, Florida mortgage refinance rates also depend on the loan-to-value of your home. The higher the loan-to-value of your mortgage, the higher the interest rate.

Shahram Sondi   July 2, 2016  


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You can refinance your mortgage as many times as you'd like so long as there is a net tangible benefit from the refinance transaction.

Some mortgage lenders require that the refinance results in at least 5% lower mortgage payment than that of your current.  However, isn't recommended that you refinance your house multiple times if the cost associated with your refinance keeps on increasing your principal mortgage balance beyond a reasonable period of recoupment.

Typically, if you can lower your mortgage payment by 5% and recoup the closing costs within a couple of years, it may make sense for your to refinance your mortgage.

Shahram Sondi   July 2, 2016  


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Yes. You can refinance your mortgage with no closing costs but the interest rate is likely to be higher.  A no closing cost option typically results in you getting a higher mortgage rate as the banks absorbs the costs associated with your doc stamps and title charges.  Basically, what the mortgage company will do is offer you a higher rate in order to pay for your closing costs. Depending on what your long term goals are a no closing cost refinance might be a good options.  Here is a simple rule for determining if you should do a closing costs or no closing cost refinance.

  1. If you plan on selling your home within the next five years, you should shop for a limited or no closing cost refinance loan option;
  2. If you plan on keeping your mortgage for a long time, then you should really opt for the lowest mortgage rates with closing costs as this allows you to save more money over the life of your mortgage loans.

Shahram Sondi   July 2, 2016  


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Combining your first and second mortgage helps lower your total mortgage payment while proving you with the ease of having just one mortgage payment.  Since the rate on a second mortgage is typically higher than a first mortgage, it often results in a lower mortgage payment when you combine your first and second mortgage into a new first mortgage. Whether or not the mortgage company will allow you to combine the two will depend on the type of mortgage you are applying for.  For instance, FHA loans allow you to combine your first and second mortgage up to 97% of the value of your home.  However, conventional loans typically cap you at no more than 85% of the value of your home in order to refinance first and second mortgage into one loan.

Shahram Sondi   July 2, 2016  


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If you currently owe more on your home than the value of your property, then you mortgage is considered to be underwater.  Only way to refinance mortgage underwater properties is by taking advantage of the HARP program if your loan is owned by Fannie, Freddie, FHA or VA. Common misconception is that you can only refinance with your current lender or services.  Fact is you can refinance with a mortgage broker who typically results in lower rates and closing costs than dealing with large banks.  Instead of searching Google for the term “refinance mortgage underwater”, you should consider searching for the term “HARP loan rates in Florida or any other state that you reside in”.

Shahram Sondi   July 2, 2016  


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