Mortgage Expert Dan ‘the mortgageman’ Foster explains the risks of Negative Amoritization Loans and why the 1% Interest Rate offers that fill your mailbox are not what they seem - BUYER BEWARE - Originally broadcast live on Good Day Sacramento
Duration : 0:6:22
I’ve been looking to refinance my townhouse that i have owned for about 5yrs now. I also have an equity line of credit of 30K. I just received in the mail from my credit union that they now offer FHA loans with no closing etc.. Which loan would be more beneficial to me? a FHA type loan or conventional fixed?? I’m looking to understand my options more.
I’m not sure of my credit score but i know it’s excellent, i have no other payments besides the current mortgage. I also have a decent amount of money saved if i need to use it for the Refi.
thanks in advance!
FHA all of the way! They will lend you the most if your home appraises for less & they have great rates.
Good luck!
C.D. Davies discusses how to refinance your existing ARM in the seventh part of this series.
Duration : 0:1:38
Current rate of ARM interest is 5.125%. Would it better to go for 6.75% mortgage refinance at no closing costs, if I am planning to live in the same house for next 7 to 10 years?
DeeDee, what does your mortgage indicate? Is there a pre-payment or other penalty? Has your homes value decreased? Do you have equity in the home.
If your home is in a declining area, your lender may require a 5 percent payment available from the equity of your home. (95 percent LTV)
I would check all your paperwork and speak to your current mortgage company. None of us know what will happen to interest rates or home values in the next 18 months.
Is it time to refinance and get out of your ARM mortgage? Hear what Suze has to say…
Duration : 0:1:23
We have equity in our home and are considering a refinance to take out some of the equity for home improvement/repairs and to buy a vehicle end of lease. Credit scores are not great, 500-550ish. We have the option to either A) Do a 50-year fixed mortgage or B) Do a 2-year ARM and then refinance again in two years when our credit scores have improved. I'm not excited about paying closing costs now and then again in 2 years. We want to have the equity cash but also want to have as low a payment as we can get to minimize living expenses.
Would it be wiser to do the 50-year fixed or a 2-year ARM and then refi after 2 years for a fixed rate? Paying closing costs twice in two years seems like a lot of money to me.
Additional information: We are currently in a 30-year fixed mortgage at 6% but do not qualify for that rate on a refi due to credit changes.
The purpose of our considering the refinance is to reduce our monthly living expenses by eliminating a car payment and to get money for home repair/maintenance. We have no debt but want to lower our living expenses. Financing our end of lease vehicle is not going to get rid of the car payment, only create a new one.
What ever you do DONT! do an ARM. There have been some bad press about them. your situation does not sound bad. I know some people who would love to have your current rate. Do you really need to refi at this time?
The closing costs are different depending on the loan and the bank/lender giving the loan. Lenders settheir own closing costs. The only cost that generally stays the same is the County Record Filing fee. The filing fee is set by the local government, so it should stay the same if you are refinancing the same home that you are comparing the original mortgage costs to.
A good way to see the total cost of the loan is to look at the APR. The APR is the total cost of having the loan annually (displayed as a percentage). You'll notice that the Rate and the APR are different, this is because the rate is the actual interest you are being charged and the APR is the interest plus all the closing costs and fees.
Read the fine print or ask your lender to explain the closing costs to you. Generally there will be the filing fee and an appraisal fee plus other fees.
Good Luck!