Common Questions for Refinancing in 2020

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Common Questions for Refinancing in 2020

Refinancing a mortgage seems straightforward…after all isn’t it easier the second time…

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Refinancing a mortgage seems straightforward…after all isn’t it easier the second time around? Still, some situations involve a mind boggling number of decisions that borrowers must navigate. While everyone’s needs are different, there are common questions that many borrowers have about refinancing options and the best time to refinance:

Should I refi to save $100/month?

Much of this decision depends on the breakeven point – which is when your $100 per month in savings equals the closing costs for the refi. Additionally, compare how much of the new payment will be going towards principal vs the existing because that determines the lifetime of the loan. These decisions usually involve amortization schedules and other more complex factors so, consult with…read more

How does it work if a court orders a refinance after a divorce?

Usually, in divorce situations, the parties are left with two options: one party has to refinance to get the other party off the loan OR the home has to be sold.

Can I do a cash out refinance while a home is undergoing significant renovation?

Getting an appraisal during a renovation, is not advisable since the goal is to achieve the highest appraisal value possible in order to lower the loan to value (LTV) for a refinance. Unfinished construction projects will not help the value of the home in these cases.

When refinancing is a high appraisal better than a low appraisal?

You want the highest appraisal value possible in order to lower the loan to value (LTV) when you get your refi. A lower LTV improves the refi terms that you’ll qualify for. Some confuse appraisals with assessments and worry that a higher appraisal leads to higher property taxes. A refinance doesn’t result in property taxes getting re-assessed.

Should I do a cash out refi if I plan to buy another home in a couple years?

If you’re able to refinance and get rid of your mortgage insurance, you should do that regardless, even if it’s not pulling cash out. If you are pulling cash out to pay off credit card debt, the good news is your scores will probably go up, so you’ll qualify for a better rate when you go to buy a new house. Read more

When refinancing a mortgage can a specific appraiser be used or will the appraisal company depend on the lender?

Lenders have to use appraisal management companies to have the appraiser assigned. They’re not able to pick and choose their own appraiser.

What determines if I can do a cash out refinance for my FHA loan while lowering my rate and getting rid of mortgage insurance?

You may be able to refinance out of your FHA loan into a conventional loan. And assuming you have at least 20% equity, you would be able to get rid of the private mortgage insurance. Depending on your credit score and other factors, you may be able to lower your rate, but when you pull cash out on a conventional loan, there is an interest rate adjustment that increases the rates. So you’ll want to talk to a loan officer about your situation.

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