Most homeowners think that refinancing one’s home to allow the mortgage interest rate to decrease is a great idea, but refinancing one’s home will only work at the right time. Refinancing of homes is often heavily contingent on the right timing.
People who opt to refinance their mortgage and move to a lesser rate actually pay an overlooked price – the closing costs. If a homeowner keeps refinancing his or her home, there is a trail of closing costs that one must not miss calculating.
Mortgage refinancing is a hit or miss venture, depending on the timing of the change. It can either work, or not, in the homeowner’s favor. This means that there are times when it is best to stay with the current mortgage rate.
Recognizing the perfect timing to refinance one’s home takes preparation and planning. It is important to first learn what the main goal for refinancing is. Having a clear goal on in mind will allow for the successful restructuring of one’s debt. Refinancing a mortgage will lead to a decrease in interest rates of the loan, as well as change the loan term. Most people opt to refinance their home so they can cut down the interest rates of the mortgage. There are homeowners, however, who aim to reduce their monthly payment by extending their loan another 30 years.
When a goal is clear, it is important to carefully calculate the circumstances and the timing of getting a different mortgage. It is wise to stay at a house for a little longer to make the most out of refinancing. It was reported that the average closing costs on a loan amounting to $200,000 would be around $3,118 as identified by the closing cost survey that was done. This amount does not include taxes, insurance, and other dues such as homeowner association payments.
Learning where one stands in their current mortgage is the best way to tell if refinancing the mortgage will work best. One’s credit score must also be considered as this will affect the kind of mortgage one will get after the home is refinanced. There are also possible prepayment penalties that one may have, it is important to have this cleared before moving on with refinancing a home.
In order to assure smooth legal transactions when refinancing one’s home, FNC Title Services LLC can provide their services to assure that the client will be well guided in their refinancing transactions.
The Department of Housing and Urban Development (HUD) of the United States has developed a federally-insured private loan referred to as the Reverse Mortgage program. The program enables elderly Americans to apply for a safe loan plan as a means to provide financial security. Reverse mortgage promises to provide funds for elders’ social security, help seniors be financially prepared in times of medical emergencies, and tries to assist elderly Americans be financially able to pay for extra expenses such home improvement endeavors.
Numerous Americans have already looked into the reverse mortgage program. It is important to learn about the basic information of the program to understand its benefits. Learning more about reverse mortgages will better enable individuals to see if the program is best fit for their needs.
Reverse mortgage simply allows homeowners who avail for the program to transfer their home equity into cash. The most attractive part of the program is that the homeowner is not required to pay for the loan while the house is the primary residence of the borrower. No other loan program carries this benefit.
HUD’s Federal Housing Administration states that the mortgage qualification is limited to certain requirements. Candidates eligible for the program are American individuals aged 64 years and older, have a low mortgage balance during the time of application which can be easily paid with the proceeds received from the home equity loan; or those who already fully own their home. HUD also requires for the borrower to be living in the home during the enrollment of the program.
HUD is not strict on the types of homes eligible for the program. It is just important that the borrowers own the home they are enrolling into the program. The house can be a detachable house, a condo, a manufactured house, townhouse, or a four-unit house. HUD also does not require the house to be mortgaged by certain lenders. To ensure the safety of the home equity loan, HUD thoroughly examines that the loan provided to the individuals will never go over the total value of the house enrolled in the program. This is considered a safety net, to make sure that the borrowers will not receive more loan than they can afford to pay.
The appraised value of the house enrolled in the program is the determining factor for the amount of money that can be loaned. Other minor factors also include the location of the property and the age of the borrower. There are services that can help individuals attain reverse mortgage loans. However, it is best to first find legal aid on attaining the reverse mortgage loan to ensure more clarity and transparency. Alexander J. Chaudhry is a well renowned lawyer with over 15 years of legal practice. Mr. Chaudhry is currently working with Ali Farahpour, CEO of FNC Title Services LLC, as a means to provide legal services to title insurance agencies and professionals. Make a visit to FNC Title Services to attain legal aid regarding reverse mortgages.