How Does Refinancing Work?

By Amber Keefer,

What It Is

1. Refinancing basically means applying for a new home mortgage. When you refinance your home you are replacing your existing home loan with a new one, which may allow you to adjust the term of the loan, the interest rate , the amount of the monthly mortgage or the equity in your home. Lenders often refinance home mortgage loans in order to take advantage of lower interest rates or to free up cash for other expenses. By reducing your monthly mortgage payment or the remaining term of your loan over the long run, you can potentially save paying tens of thousands of dollars in interest.

Consider the Cost of Refinance
2. Once you decide to refinance your home mortgage, you might want to talk to your original lender first. You will be required to go through a credit check and verification of employment. It's always wise to request a good-faith estimate in writing from the lending institution, particularly if you talk to more than one lender. You will want to make certain that you understand all of the costs involved, as you compare lenders and the best interest rate each offers. It is important to remember that refinancing comes with loan processing costs as well. You will want to determine if any long-range savings will outweigh the expenses involved in refinancing the loan. Transaction fees and other hidden costs associated with refinance could diminish any savings over the long term. Depending on your situation, it might make more sense to take advantage of lower interest rates by refinancing your auto loan or credit card debt.

Compare Interest Rates
3. If you refinance with the financial institution that holds your first mortgage, ask if there are any special discounts given to established customers or if certain fees can be waived. While interest rates are important, you will want to take into account the overall cost of the loan, including loan origination fees and points. Talk to your lender about the specifics. You will want to compare interest rates using the same number of points. In general, each point you pay, or 1 percent of the loan amount, reduces the interest rate by 1/4 percent.

Ask Yourself If It Will Pay Off In the End
4. In order to determine whether refinancing your home mortgage will pay off in your case, ask yourself whether you can refinance at an interest rate at least 2 percent lower than what you are paying now. Remember, though, that if you pay a lower interest rate, you will have less interest to deduct from your income come tax time. On the flip side, some refinancing costs are tax deductible in the year that the refinance occurs.

Think About a Home Equity Loan Instead
5. If you are thinking about refinancing your home in order to consolidate other debts, you might want to consider a home equity loan instead. An equity loan allows a homeowner to borrow money by using the accumulated value of the home as collateral. While lenders typically consider a home equity loan as a low risk loan and make it easy for borrowers to get, with the recent downturns in today's real estate market, the value of some real estate actually is dropping leaving the homeowner owing more money than his or her property is worth.

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3 Options For Refinancing With FHA Mortgage Refinance!

By Al Hardy

Do you want to enjoy or need some of the money that you have invested in your home over the years or do you need to reduce your mortgage payment? Refinance loans allows homeowners to get some of the equity out of their homes and also can be used to reduce their mortgage payments. FHA Mortgage Refinance can help you to lower your mortgage payment on your FHA loan and get you a lower interest rate.

To start the refinancing process you will need additional information. You will find below 3 options of FHA home refinancing you should consider.

The FHA Cash Out Refinance Option

This option may be great for you if your home has increased in value since you have purchased the home.

The FHA Cash Out Refinance option will let you refinance your existing mortgage loan by receiving another mortgage loan for more than you currently owe. The old mortgage is paid off and you will receive the difference between the old loan balance and the amount of the new mortgage in cash, thus the name of the option (Cash Out Refinance).

This option allows you to use the built up equity to do whatever you want to do with it.

FHA Streamline Mortgage Refinance

This option is known as a streamlined refinance mortgage because you can reduce the interest rate on your current mortgage loan much faster and easier. Most of time this option does not require an appraisal.

FHA Streamline Mortgage Refinance requires less paperwork for the lender thus reducing the cost and the time required to close. A couple of requirements for this option are the original home mortgage loan must be a FHA home loan and the refinancing has to reduce your monthly interest payments.

Although you will benefit from the FHA Streamline Mortgage Refinance by reducing your monthly payments you can not receive cash back at closing like you can with the FHA Cash Out Refinance Option.

Refinancing A Non-FHA Loan To A FHA Loan Mortgage

If you do not currently have a FHA loan you can refinance it to a FHA Loan Mortgage but you can not use the FHA Streamline Mortgage Refinance option.

If your current mortgage is a conventional mortgage you can refinance it up to 96.5 LTV (Loan to Value). The Loan-to-Value ratio is the amount of the first mortgage expressed in a percentage to the current appraised value of your home.

This could allow for a sizable mortgage loan if you meet all of the requirements.

Using FHA refinancing to refinance your home mortgage loan is usually easier and quicker than using other types of refinancing.

FHA Mortgages can allow the homeowners use the equity in their home for many things such as help paying for their children college education, or take a dream vacation, or just to pay off higher interest debts. The best place to find more information about FHA Refinance Loans is the Internet. You can find many websites that will help you to decide the best option for you!

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Passing a Pre-Qualification in Mortgage

By Flynna Sarah Molina

In the advent of the ever evolving financial crises and upheavals, mortgage remains to be a constant avenue for acquiring any property. It has become an automatic option when one opts to buy a certain piece or parcel of land.

Mortgage is process of acquiring any property through loan application from any funding institution or agency. The mortgage provider pays off one's property from the property owner and developer. The buyer then settles his account with the mortgage provider. Usually, the mortgage providers are banks, financing houses and other financial institutions.

There are therefore, pre-qualification procedures before any mortgage is approved. The pre-qualification for a mortgage is responsible for conducting series of background investigations of applicants for loans based on a set of standards. It is also a system responsible for appraisals of all submitted collaterals, if needed and required for evaluation. Usually it takes a certain period of time before a real estate mortgage is approved. Certain considerations are taken into prior to approval. But what is indeed the role of any pre-qualification of mortgage. Here are some of them:

The pre qualification mortgage procedure usually starts with the conduct of preliminary interviews of all loan applicants upon submission of documentary requirements. Most often, there are prescribed documents prior to mortgage application. Hence a validation on submitted documents such as Certificate of Employment, audited financial statements, income tax returns, bank statements, property titles through coordination with credit groups, must be conducted.

For special cases, the pre-qualification of mortgage may require the conduct of physical and character background investigation through ocular inspection, character and loan reference interviews based on the basic criteria of credit/lending operations: Character - Reputation, integrity, word of honor of any applicant; Capacity refers to the earning capability and profit generation ability of the applicant; Capital, referring to the applicant's stability of assets; Collateral (if needed and required) property of asset that the borrower can make available to the creditor to guarantee the payment of loan; and, personal condition which are external factors over which the lender does not have control, such as health of the applicant;

The prequalification likewise performs and validates property appraisal after ocular inspection and documentary validation with respective state agencies based on zonal and market evaluation in accordance with the credit guidelines. A mortgage application report is then drafted which reports through the provision basic information and other relevant information based on the findings on the investigation conducted.

The bottomline of the conduct pre-qualification of mortgage is basically, ensuring that a prospective applicant of any mortgage in real estate or any other loan has the capacity to fulfill his obligations according to the stipulated policies and guidelines. This is very important fact that should be established, prior to any approval of mortgage application. Payment of mortgages is very important as this keeps the company resources coming and going.

The key therefore in a successful mortgage application is passing the pre-qualification mortgage procedures. Passing the pre-qualification, entails submission and complying all authentic documents required by the different mortgage providers. Honesty and accuracy in all required information is very important.

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Residential Property Management and Vacation

By Andrew Stratton

In popular vacation destinations, like Orlando, Florida, people may choose to purchase homes in neighborhoods to use as personal vacation properties. Often these homeowners use these homes two or three times a year. The rest of the year, the home sits empty. If you own a vacation home, residential property management can turn it into a source of residual income by renting it to vacationers looking for homey accommodations away from the hotel scene.

A residential property management company will handle many aspects of renting your home for a few weeks at a time to vacationers. For instance, guests will call the company, rather than you, to make reservations. They will also contact the company if they need help or have questions about their stay. While guests are in the home, the company is available to take care of any urgent needs that arise. For instance, if you live in another state, there is little you can do if the toilet starts overflowing in the middle of the night while your guests are at the home. With one of these companies as part of your professional team, the guests will call the manager and explain the problem. The manger will contact a local plumber to come to the home and fix the toilet. You do not even have to know there was a problem.

Owners who live in another state often struggle to maintain their vacation homes while they are away. When they return to the home, rather than enjoying a vacation, they must spend time sprucing up grounds, mowing the lawn, and cleaning the interior. A residential property management firm will take care of maintenance and upkeep needs, ensuring that the home looks great for both perspective renters and the home's owner. They often partner with local maintenance and cleaning services to keep the home in excellent shape.

The company also handles the legal aspects of renting out a vacation home. Because these companies are experts in rental, they know the legal disclaimers and liability issues that a lease should cover. They can arrange all of the paperwork, collect payment, and send receipts to guests. Basically a residential property management company takes care of all of the details surrounding renting your home. You have little work to do, yet you will collect a check when the guests are finished with their stay.

Unless you live near the home you plan to offer as a vacation rental, hiring a residential property management company to help you lease it out is the only practical option. Doing so ensures the needs of your guests are met during their stay and all paperwork is handled properly and efficiently. With the help of the right company, you can turn your vacation home into an ongoing source of residual income.

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Don't Rent Your Property Without a Rental Checklist

By Adam Stevenson

This article will discuss briefly why you should not rent your property without a rental checklist and tenant walk through, what to look for in a rental checklist, and where to find a good rental checklist.

Why you need a checklist
If you're a landlord or a property manager, it's important that you have a checklist and complete a tenant walk through before renting your property. By 'Rental checklist', we're really just referring to a document that specifies the condition of individual areas when the tenant moves in and moves out. Without completing this simple step, you could become liable for any and all damage caused by the tenant. Likewise, without this agreement the landlord would have a hard time proving damage, and could lose their right to the security deposit. This agreement is put into place to protect both parties, and can be completed any time before the tenant occupies the premises - even right before moving in.

Things to look for in your checklist

There are several key areas that need to be covered in the document:
1) Interior walkways and high traffic areas. This is the most likely area to receive accidental damage from tenants during the lease.
2) Plumbing, bathroom areas, showers, etc. These areas are also likely to receive damage and are often modified by the tenant.
3) Flooring and carpeting, tile, etc. These areas are subject to spills, stains, burns, etc.
4) Appliances and fixtures. These areas are used extensively and are subject to wear and tear. Also, major appliances can be expensive to replace or repair - check these areas closely.

5) Signatures and dates for all parties. This is very important.


Where to find a rel=nofollow [http://www.rentaljam.com/]rental checklist template
So you know what you need, but where do you start? There are a few different options:
1) Look online. There are many different websites that offer rental checklist stock documents and templates, so it shouldn't be hard to find one that works for you.
2) Check at your local library. Look through real estate or property management books or ask a librarian.
3) Walk through and draft one yourself. Take your time to ensure that everything you want covered is included in the document.

Conclusion:
It can be tempting to skip this important step - don't do it! Take a few minutes to find a document, and spend 10-20 minutes with your tenant walking the premises and checking off the items before they move in. You'll potentially save yourself thousands of dollars and it's great for the peace of mind.

Don't forget your [http://www.rentaljam.com/]Rental Checklist