Refinancing Your Mortgage Explained Plus A Free Download For You

Posts Tagged ‘refinancing’

Refinancing Your Mortgage Explained Plus A Free Download For You

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Q: My question is; what is the process for refinancing your home for a lower rate and can you add on some of you existing loans on to the refinance? For instance, auto loan and personal loans and also credit cards. I just want to know what are the qualifications for refinance?

A: When you refinance a mortgage you are basically taking out a whole new home loan. The new mortgage will completely replace the old loan you got when you bought your house a year ago. So yes, ALL of the debt from your existing home loan will be converted into the new mortgage when you refinance.

However, lenders generally do not let you wrap in other debt, such as personal loans, credit card bills, etc. into your home loan. That’s because your mortgage is a “secured” loan, and it’s backed by collateral — the house itself. If you don’t pay your mortgage, the bank can foreclose on the house and take ownership of it. However, personal loans and credit cards are “unsecured” loans. The bank doesn’t know what you bought when you charged on your credit cards or spent money on that personal loan. Also, those debts have nothing to do with the value of your house. So they won’t qualify to be folded into a mortgage.

The qualifications to refinance a home are essentially very similar as those for getting a first mortgage. In terms of things you should think about, I want you to read a free excerpt from my book, Your First Home: The Smart Way to Get It and Keep It.

This information comes from the chapters in the book where I discuss what to look for in a mortgage, how to pick a lender, which loans to stay away from, questions to ask about a mortgage, as well as some do’s and don’ts of refinancing.

I hope this info helps you. Good luck!

Refinancing Tips If You Are Under Water

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Author: The Money Coach

Q: My husband and I purchased our home a little over 5 years ago. We were looking at refinancing since the rates are low now. We have run into a couple of problems. First, we have two mortgages on the house since they would not cover the full amount of the loan for just one mortgage. Second, we owe more than the house is worth? The loan company we were going to work with suggested that we call the first loan company and see if we could negotiate a lower rate, which in turn would lower the payment. Is this something that you think we should try and do you have any other suggestions.

A: We asked mortgage expert Ray Kuplaste to help us answer your question. Here is what Ray told us:

There are several solutions to this problem depending on the type of loan they have and who the lender is:

Option 1: If the 1st loan is a Fannie Mae loan, you can refinance 1st loan only as a DU refinance plus, even if you are upside down.

Option 2: Call the 1st and 2nd loan note holder separately and try to lower the rate/payment.

Option 3: Call the 1st and 2nd loan note holder and try to negotiate a short payoff to be able to refinance.

Please note that options 2 and 3 will require some type of hardship in order to get the note holder to work with you.

Also note, for all FHA loans, you are able to do a Streamline refinance without an appraisal or income verification.

Ray Kuplaste is Vice President of Sales at UC Capital Lenders, a mortgage brokerage based in Philadelphia that specializes in residential and commercial mortgages. You can call Ray at: 1-267-334-2500 or reach him via email: ray(AT)uclenders.com.

Here are 5 Easy and Creative Ways to Save More Money

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Author: The Money Coach

During a recent interview on ABC News NOW, Lynnette Khalfani-Cox, The Money Coach gave viewers the following 5 easy to use tips to help them save more money.

Save on Your Car: Many people don’t realize that you can refinance your car loan just as you can refinance a mortgage. A car refinancing is faster, simpler to do and costs virtually nothing. Average savings: $1300 over the life of the loan.

Save on Utilities: You can save up to 10 percent on your energy bill just by unplugging appliances when they aren’t in use. So unplug that toaster, coffee pot, or any other small item that may be on your kitchen sink when it’s not being used.

Save on Everything Online: Hop on the Internet for the best money-saving deals. Not only can you comparison shop for everything from clothing to electronics, but you can also learn how to save from savings-oriented websites like EndangeredSavers.com.

Save on Medicine and Prescriptions: Just buying generics can save big bucks. The average name brand prescription costs $100. The generic version of the average pill/prescription usually costs just $30 – a 70% savings!

Save on Household Items: We all need toothpaste and deodorant, right? Save money by buying these products in the right form. For toothpastes, reach for the tubes, not the pumps. Tubes offer more bang for your buck. With deodorants, go for the stick or roll-ons, not aerosol cans, which get used up much faster and are less effective.

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I can’t refinance my house without my husband’s signature. What should I do?

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Author: The Money Coach

Q: A bank won’t let a woman refinance her house without her husband’s signature. The problem is that the woman and her husband separated after being married for just one year, and the current mortgage is in her name only. What should she do?

A: I have a question from a reader who wanted to know about refinancing her home loan. She said, “I wanted to refinance my house in order to consolidate all my bills. I got married last year and now I’m separated. I bought my home alone without a co-signor but I was told by my bank recently that could not refinance my home without him. Him, I guess, being her estranged husband. She wanted to know what she could do. And also, is this legal?”

Well, the question is a good one because frankly, lenders have to abide by federal law which dictates what they can and can’t ask you with regards to getting a mortgage. Sometimes you might think that some of these questions are particularly intrusive or not relevant but in the lender’s mind, oh yeah, they are plenty much relevant.

For example, I suspect that your lender was saying you can’t “refinance without your ex” for one of two reasons. Either, one, they are saying to you that you don’t qualify on your own in terms of the debt to income ratio that might be different now than it was before when you first bought your home. Perhaps they’re saying also though that they are worried about the financial predicament in which you might find yourself post-separation and ultimately, post-divorce, if a divorce does in fact take place.

Obviously, a divorce is a personal matter but it also has major financial implications. So, it is not uncommon once you tell a lender that you’re separated or divorced for them to want to know some details about it. After all, divorced people, many of them actually go through bankruptcy subsequent to the separation. So, they’ll want to know things like – Are you getting or receiving alimony or paying alimony? Is there child support involved here? Which liability did you guys jointly rack up? Those kinds of things.

So it’s not uncommon for lenders to try to get information about your financial situation as it pertains to your spouse, your estranged spouse or your recently divorced spouse. So, what I would do is, seek a little bit of clarity from lender and because they certainly can’t or shouldn’t be saying to you as a woman that you cannot refinance or get a mortgage just because you’re a woman and because you need to have a man, or your husband or any other person on the loan. I suspect there are some other reasons why they’re saying you don’t qualify to refinance that home loan. Do find out what their credit score requirements are, how much equity that they say you need to have in the house, what kind of a debt to income ratio they want you to have. In other words, the percentage of bills that you are paying versus the amount of income that you are bringing in by yourself. All of those factors will matter greatly when it comes to approving that home loan you want and need.

Ask The Money Coach

Posts Tagged ‘refinancing’