A refinance provides the mortgagor the opportunity to switch to a lower interest rate or transfer his mortgage to another lending company. Transferring your home loan loan refinance is an option when the interest rates are eating up your budget or when the company is not servicing your loan the way you want it. But there are other considerations when thinking of a refinance.

Avoid Monster Companies

If you have been diligent with your monthly mortgage payment for years and the company has provided you the service it promised to deliver, there shouldn't be other reason to transfer your mortgage to another company. Lower interest rates might propel you to make a switch and if the company cannot give you a lower interest rate, getting a home loan loan refinance from another company is advised.

If your present mortgage company can provide you a lower interest rate, well and good. The process will be faster this time because the company knows your track record. It is also likely that the company will grant your request because it values your business. But if the lender cannot give you a lower interest rate, shop for another company that may be able to have a home loan loan refinance program tailor-fitted to your needs.

However, looking for a home loan loan refinance is not easy. With several mortgage companies out there, be sure you're getting one that is bound by good business ethics and not one of those monster companies that delay your application for some blurry reason purportedly to review and process your paper.

Don't be impressed with glossy advertisements of smiling men and women promising you fast and dependable service. Do your research well before doing any business with them. This is especially true when you're dealing with a company out of state. Check out the company's track record with the Better Business Bureau. If the company is littered with complaints, set your sights elsewhere.

Ask Before You Leap

Before you give any commitment, ask the companies if they charge for early loan payment and if they can give you a three-day period for rescission. Most people are not aware that they can back out of a home loan loan refinance when their gut tells them they are not getting the refinance they want.

The loan agent must tell you about this, but usually they don't. During the three-day period, you have time to review your mortgage documents after closing. You have until midnight of the third day to make up your mind. Fax them your cancellation and address this to the broker, lender, and the company. Follow this up with telephone calls just to be sure they know your decision and are informed of the faxed cancellation.

Knowing your right to a rescission takes off the pressure from the bullying tactics of monster companies. To protect your right to a rescission, do not allow the agent or the broker to force you to falsify your information. This will work against you and you'll find yourself trapped to a home loan loan refinance you will be unhappy with for years.

Be Informed

All prospective homeowners and those with mortgages should not shelve the opportunity to learn about the mechanics and processes of the mortgage transactions. Being well-informed arms you to deal effectively with loan agents and help you protect your rights as a consumer.

Getting another mortgage company then is not always about getting a lower interest rate for your home loan loan refinance. It's also about protecting yourself against the unscrupulous practices and bullying tactics of mortgage companies.

Credit card debts have spun out of control. If you are one of the millions of Americans plagued with piling debts, debt consolidation is a practical alternative. If a refinance can bail you out of this financial mess, ask a Florida refinance expert to explain the mortgage details before you put up your house as collateral.

What To Expect From A Mortgage Expert

Getting a refi to consolidate your debts is not the best reason to get a refinance. But experts can help you out. These refinance companies have several mortgage programs for every need and financial capacity.

Wherever you are, a Florida refinance expert can walk you through the different mortgages and interest rates. An online mortgage calculator can provide you with an accurate estimate of your monthly amortization for a 30, 20 or 15 year loan.

The refinance expert will offer you various mortgage programs. Before he launches his sales talk, ask the following questions:

* What is the lowest fixed mortgage interest rate that can be available in your case?

* Do they charge a penalty for early payment?

* Can you back out from the deal if you realize that the mortgage is no right for you?

* Who is going to service your mortgage when the deal is signed?

* What are the tax benefits available?

An expert is bound by ethical standards to tell you your rights as a consumer. He should honestly answer your questions. After all, it's you who will be burdened with the mortgage. So be vigilant about your rights. He will offer you both traditional and conventional mortgage schemes and explain what to expect from these types of mortgage programs.

Do Your Research

Before a meeting with a loan agent, weed out the refinance companies until you find one that can deliver the lowest interest rates. Find out if the fees are all laid out and what the company expects from day one to the closing of your refinance.

With advance knowledge of the monthly amortization of your refinance and the company's requirements, determine the overall budget after expenses and taxes. List other possible sources of income aside from your regular paycheck and make sure you have enough to cover your family's needs, or else your plans will not stand a chance.

Calculate how long you'll be residing in your home. If you're going to stay for 3 to 7 years, get an adjustable mortgage while the interest rates are low and adjusts later on to the prevailing rate. Get one that matches your timeframe. Ask the loan expert from the Florida refinance company about the feasibility of an ARM in your situation.

Family Collaboration Counts

If you've been building the equity of your home, a Florida refinance company should entitle you to 90% of the current value of your house. Use this money to pay your credit card debts. Use the remaining amount for emergency purchases. Remember this is not the time to splurge, but to save up for the future and to keep your house.

If your refinance has been given approval, take the new mortgage seriously. Your house is your last valuable asset and you can't live on the streets. Prepare a practical financial plan. Enlist your partner to help you and talk it over with your kids. Explain there'll be some things they have to live without like weekly movies and new gadgets. Family cooperation can make living on a reduced budget bearable and contribute to the success of your Florida refinance.

When shopping for current mortgage refinance rates the first question that comes out of any borrowers mouth when talking to their mortgage lender is usually centered around the interest rate and how low it is. But what many people forget about is picking the right loan for their situation. By picking the right mortgage loan program potential borrowers can almost guarantee themselves the lowest interest rate possible that will benefit them more by also fitting into their short and long term financial goals.

Different options To Consider For Your Refinance

Adjustable Rate: While the vast majority of borrowers want a fixed rate loan there are borrowers that could benefit from the lower rates and payments of an adjustable rate mortgage. If you know you will refinance or sell your home within the loans pre adjustment period you can expect rates around a quarter to half a percentage point less then a fixed rate..

Pay Points: If you intend to stay in your home for many years it may make sense to pay points on your mortgage to get the lowest refinance rate. Points paid for a lower interest rate are normally tax deductible so along with the lower ate you also get tax savings at the end of the year. The average amount to pay for points is one to two percent of the total loan amount, or $10-$20 per $1000 borrowed.

No Closing Cost Refi: Although the rates on a no closing cost refi are higher then normal they do allow you to refinance almost for free. You will be responsible for pre paid items like interest and taxes but the rest of the fees are paid by the lender. These loans let people that know they will refinance again within a few years or sell their home keep more equity in their property by not using it to finance closing costs.

By using the right program to refinance your mortgage you will definitely set yourself to get the best loan for your goals and finances. On the other hand if you just focus on a low rate you may be passing up a program thats right for you.

The vast majority of flexible mortgage borrowers make overpayments on their mortgages. The earlier that you make the extra payments in your mortgage term, the earlier your mortgage will be paid off. Even by making slightly higher monthly repayments will enable you to repay your mortgage loan quicker. For example, on a £70,000 mortgage charged at 6.2%, giving up your weekly large latte at £2.80 and putting that money towards your mortgage instead, would pay off the mortgage 1 year and 5 months early!

Some lenders state a minimum overpayment of £25 per month and a maximum overpayment of 10% of the outstanding balance on completion.

Overpayments can also be made by lump sum payments on an ad hoc basis.

The best flexible mortgage is one that allows you to overpay at any time without penalty.

Underpayments

Underpayments can occur when you have made some overpayments. The underpayment option of a flexible mortgage is useful if, for example, your finances have become stretched. You can then choose to underpay for a few months until your finances have settled down.

Payment Holiday

Some deals allow you to take a complete break from making mortgage payments for up to a year. This could be useful if you're thinking of starting a family or taking a sabbatical. You have to have built up sufficient overpayments to cover the period you take off and some mortgage lenders may only let you take a couple of month's payment holiday each year

Borrowing Back

Borrowing back overpayments, instead of taking out a loan, makes sense if you need extra cash for any reason. You often have to build up a reserve of overpayments against which you can borrow and there will probably be a ceiling on the overall amount you can borrow through your original mortgage. The great aspect of mortgage overpayments is that rather than putting any spare cash into a saving account and earning a small rate of interest, the amount you overpay is taken off your mortgage so you are effectively earning the mortgage rate on your savings.

Some lenders let you withdraw overpaid money directly using a cheque book or a debit card and others let you borrow money as the value of your property increases.

Interest Charges

Unlike some traditional mortgages that still charge mortgage interest on an annual basis, flexible mortgages are calculated on a monthly or daily basis. This means that any overpayments you make are quickly credited against your loan, so you are immediately paying interest on a smaller amount of debt, thereby saving you money in interest charges.

The real estate market is full of bargains these days. Homes that sold for $500,000 a year or so ago can probably be picked up for less today because the housing market has become soft or has turned into what is known as a buyer's market.

So, when you're out there looking for a home, the big question is, "for my mortgage, how much can I borrow?" While the answer may be delightfully surprising, the real test comes when you figure out how much you can truly afford. Therefore, in this article we will give you the information you need to determine how large of a mortgage you can make the payments on and then you can go look for your dream house.

How much you borrow is up to you

The way the real estate mortgage market works today is anybody with decent credit can get a mortgage for just about any amount he asks for. It's really gotten crazy! Through negative amortization mortgages people have gotten mortgages for way more than they could afford and they were actually talked into this overextending of themselves by the lenders.

This is what you want to avoid. The lenders make more money for each additional dollar they lend you. Realtors have absolutely no motive to try to make sure you can make your mortgage payments because they get their percentage at closing. After that it's up to you. Personally, I believe the buyer having this information will make much better choices than a lender or a realtor would make.

The 28/36% rule

Back in the 1980's, they used to determine how large a mortgage a potential homebuyer could afford by using the 28/36% rule. Using this rule, the lender would first find out if the applicant had any debt before the purchase of the property. This debt would include car payments and credit card payments.

If the applicant had none, the lender would multiply the applicant's total monthly income by 36%. The monthly income would be the yearly income divided by 12. Though this might seem like an oversimplification, it is calculated that way instead of using 4 weekly paychecks as a month or 2 biweekly paychecks as a month because this amount would be smaller than the true monthly pay received.

So, if someone made $6,000 a month, it would be multiplied by .36, which would give an answer of $2,160 per month. This would be the amount of the monthly payment the applicant would be allowed to borrow up to. They would use this amount without adding on taxes or homeowner's insurance.

$2,160 a month would pay for a mortgage of $324,000, if the mortgage interest rate was 7% and the term of the mortgage was 30 years. The standard in the lending business is the mortgage can be up to 80% of the price of the property, so the price of the property could be as high as $405,000. Of course, the buyer would need an $81,000 down payment.

What about that car payment?

If the applicant had other monthly obligations, such as a car payment, the lender would use 28% of the monthly income. In this case, the applicant could make monthly payments of up to $1,680. If again, the rate was 7% and the term was 30 years, $252,000 could be borrowed.

I am a proponent of the 28/36% rule. It is more liberal than the old standard from the 50's, which was not to take on any larger monthly obligations than the amount of your weekly paycheck, but the 28/36% rule does give a proven guideline.

There is one last word of caution. Make sure to only apply for a fixed rate mortgage. These days, lenders will qualify people at some low introductory rate and then a year down the road the minimum monthly payment rises to well above the amount the applicant was approved for. Don't go there! Get a fixed rate mortgage only and there will be no future life ruining surprises.

What's the secret to getting the affordable property investment qoute? Just make sure that your credit history is a good one, because if you have a poor credit rating, the reputable refinance lenders who are willing to front you a home loan will be few and far between. Even if you can find a property refinance, it will be at exorbitantly high interest rates, making it even harder to meet your monthly payments. Before you apply for a home loan, do a credit history review and fix whatever you can to raise your credit rating.

Learning Your Credit Score

The first thing you'll need to do to maximize your credit rating in your bid for the matchless interest quote is to request your credit report from the three major credit reporting agencies, TransUnion, Experian, and Equifax. You are entitled to a free credit report from each of them once a year. If you wish, you can ask for your report online.

Your credit report will reveal the amount of your current debt and you untapped credit lines, and the status of each of your loans and credit card accounts. You'll also get your rating, which is what interest lenders use to determine whether or not you will get the suitable refinance rates.

You credibility rating will be somewhere between 300 and 850. Most people fall into the 100 to 650 range, and the good refinance quotes will be given to those with scores over 700. The closer you get to 850, the better your interest rates will be.

Repairing Your Credit Score

If you aren't happy with your credit score, then you can take steps to raise it and make yourself eligible for the best interest rates. This doesn't mean that you will have to completely eliminate your debts; but you should at least establish payments plans for any accounts in which you may be delinquent, and stay with them for a few months before you look for a mortgage.

Doing so will establish that you are serious about meeting your financial obligations, and will boost your credibility to get a loan. By staying current on your payments and keeping small balances on your credit cards for a while, you will fix your rating so that you are a candidate for the best rates.

While home ownership is one of the foundations of the American dream, it is out of reach for some people. simply because their poor loan payment capacity denies them access to the best refinance terms. If you have received your credit report from the credit reporting agencies and know it is good, you can shop for the better home loan rates with confidence.

With the availability of the Internet it is very easy for a would be borrower to apply for a mortgage online in hopes of getting the best deal available. However what most people do not know is that there are many negatives involved with online loan applications that you need to be aware of as a consumer.

Apply Once Get 100 Calls: The truth of the matter is that a large percentage of mortgage application websites on the Internet today are not really mortgage lenders. Instead they are mortgage lead companies that will sell your contact information to mortgage companies that pay them for this information. To make matters worse lead companies often sell to each other making what was one application turn into months of annoying phone calls.

Remote Lenders: If you do apply for a mortgage online and receive a rate quote that makes you happy you will still be dealing with a company that could located on the other side of the country. This may not bother some borrowers but a local mortgage company almost always gives better more personable service to local borrowers and reduces the possibility of identity theft.

Information Security: By entering your social security number and other sensitive information when you apply for a mortgage online you are taking a risk that could wind up costing you alot more then you bargained for. Even with all the security measures in place and a secured website, hackers can and do gain access to companies databases and steal valuable information. You also really have no clue where your information is going after you hit the send button, is it going to a real mortgage company or a site set up to steal information?

While some people have had a great mortgage experience from online lenders many do not. The only guaranteed way to make sure that you mortgage company is going to keep your information private and confidential is to choose a local lender and walk into their office and talk face to face with your loan officer. That can only be done with a local lender and is not possible you apply for a mortgage online.

One prominent factor that will determine whether a borrower will get a prime interest rate or a subprime interest rate is their income.

A borrower will receive the best interest rates available only if:

Their income can be documented

They have had the same job for a minimum of 2 years or have been in the same line of work for a minimum of 2 years.

There are no gaps in their 2 year employment history

Their total GROSS income (before taxes) represents 45% or less of their TOTAL MONTHLY DEBT. This is known as the debt to income ratio (DTI). Monthly debt includes the principal and interest , property taxes and insurance of the new projected loan at the new interest rate, as well as all credit card debt and any other revolving debt, (i.e. car payment, boat payment, timeshare payment, etc).

Credit card and other revolving debt is added to the debt to income ratio by adding up the minimum monthly payment required to satisfy a creditor, not the total debt owed. For example you might owe $4,000 on a credit card, but the minimum monthly payment required is $64. Only $64 will be added to the total monthly debt when determining your debt to income ratio.

Sometimes other compensating factors will allow the DTI to exceed 45%, but it's a good rule of thumb

Exceptions to these stipulations are:

Income may not have to be documented if your credit score is over 680 points and you do not want cash.

Income may not have to be documented if your credit score is over 680 points and you want cash but are borrowing less than 75% of the total value of your home.

In these cases a 680 point credit score is the absolute minimum for the opportunity to not document one's income and still retain the best interest rates. It will be much easier for a borrower to qualify for a loan and not have to submit income documentation if their credit score is well above 700 points.

However, having said all that, other factors may apply and ultimately deny the borrower the opportunity to not document one's income. Oftentimes this qualification can only be determined on a case by case basis.

If one is employed in a salaried job the documentation of the income is not a significant factor as a w2 will indicate exactly the annual, and through simple division, the monthly income the borrower has received that year. This is a much more important factor for those that are self-employed and are taking Schedule C deductions.

By now you must realize that your loan scenario is unique and should always be analyzed by an experienced professional. If you wish to find out more about YOUR specific loan situation you can go to my website and put in your information. I will receive your request by email and contact you soon afterwards.