A Homeowner's Guide to Mortgage Refinancing
If the urge to refinance your mortgage has come over you, you're not alone. Millions of homeowners have cut their interest rates, monthly payments and will save thousands of dollars over the life of their loans.
Or so they think. The truth is that for at least some of those people, refinancing will cost them plenty in the long run. They might select the wrong mortgage for their needs, might not know what options are available, or simply don't know where to begin.
Just knowing that there's really no such thing as a "no-cost refi" can help you get the right mindset to locate the best possible deal.
"Mortgage Refinancing," another booklet in HSH's "A Homeowner's Guide To" series outlines the best steps to a successful refinance, whether it's to get a better rate and payment, lower your overall interest cost or to draw equity out of your home. The 12-page booklet helps homeowners understand the costs and risks associated with swapping an old for mortgage for a new one, and includes a monthly payment table and a chart to show when a "break-even" point for recouping costs has occurred.
If you're a homeowner, "A Homeowner's Guide to Mortgage Refinancing " is for you. The booklet is available for $4 (money orders only) from HSH Associates, 51 Route 23 South, Riverdale, NJ 07457.
This booklet is also available in combination with our Homebuyer's Mortgage Kit for an additional price of $2.
To order by mail, please send a money order (sorry, no personal checks) to this address:
51 Route 23 South
Riverdale, NJ 07457
Accredited media wishing to preview a copy should request a copy. Please include the name of your media outlet, your office address, and your e-mail address.
The booklets in the "A Homeowner's Guide To" series include:
- "A Homeowner's Guide To Home Equity Loans and Lines of Credit"
- "A Homeowner's Guide To Refinancing Your Mortgage"
- "A Homeowner's Guide To Prepaying Your Mortgage"
- "A Homeowner's Guide To Private Mortgage Insurance"
More help from HSH.com
Are ten-year fixed-rate mortgages (FRM) available anywhere?Sure! Virtually all lenders who sell product to Fannie Mae or Freddie Mac will be able to offer you mortgage with a 10-year term. However, interest rates are usually the same as the lender's 15-year offerings. If you find a great lender and rate, but they don't offer a 10-year term, you can always make yourself one. Using an amortization calculator, plug in the particulars for your loan with a 10-year term; now, refinance as normal, then send in the payment you calculated for the 10-year loan. Voila! Instant shorter-term mortgage (in fact, you can shorten the term of the loan to any term you want using this method... just make the payment you calculated for the term you want).
Can we do a "cash-in" refinance?
How do I remove or add a name to a home loan?In general, the only way to remove a name from your mortgage will be to refinance or pay off the debt. This is also true when trying to add names to the mortgage. Lenders will not add nor remove names from such an obligation without the opportunity to ensure that the other borrowers have the ability to pay.
I'm an inexperienced refinancer. What can I expect?Q: I owe 56,000 on my eleven year old variable rate mortgage at 8%.I have good credit, have been in my home for 11 years and want a 15-year fixed-rate mortgage. While I have a good income, I have no cash for closing costs. Do I need to pay points and fees? Do I need an appraisal? What can I expect when I approach the bank for a refinance?A: If your credit is good and you have equity in your home, you should be able to refinance to a 15-year fixed rate. Lenders will require an appraisal of the property, but you should be able to build the cost of refinancing into the loan amount, or might be able to trade it off in exchange for a slightly higher-than-market interest rate. As the bank about your loan options, and expect that you'll need to fully document your income, debts and assets.
Is there a ten year refinance mortgage out there?Almost any lender that offers a fixed-rate mortgage will offer a 10-year mortgage. Mortgage rates for a 10-year mortgage usually aren't any better than the rates offered for a 15-year mortgage. That said, be sure to shop around to find a competitive rate. Getting a fixed-rate mortgage with a term as short as 10 years will save you a lot of money on interest costs.