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Is it a good idea to refinance your 1st mortgage to include you home equity loan if there are only 4 years left on the home equity loan?
Wiki User
∙ 14y ago
It depends. You may not be able to refinance at all if you don't roll both loans in, as the second mortgage holder has to allow you to keep the second loan subordinate to the first.
The math you want to do, or have done for you, is to see which option allows you to spend the least amount on interest. The lower interest rate on the new, larger, mortgage should save you more interest than you will spend on the current mortgages, even after you consider closing costs.
Tom T.
www.startwiththehouse.com
Wiki User
∙ 14y ago
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Every person should refinance their mortgage after five years.?
Every person should refinance their mortgage after five years.
Can you get a home equity loan if you have a 1st and 2nd on your property and your escrow states that you can not refinance for 3 years?
A Home Equity loan is an additional loan from your first and second mortgage. It does not require a refinance process. However, consider if you want to saddle your home with any more debt, given that you may not have much equity. If you are paying PMI, it may also change that position.
How does one know when it is time to refinance their house mortgage?
The best time to refinance your home's mortgage is when you believe that you have paid enough on your current mortgage to try to haggle for a lower rate. Usually several years.
Where does the equity go when refinancing?
You can cash out on your equity, but your payment would be as if it were a new loan at the same amount. You can also opt to apply your equity towards your new mortgage and the result would be a lower montly payment and less debt. If you use your equity towards a new mortgage you can refinance for less time and possibly have a payment around your current payment. EX: A $60,000 @6.75 for 30 years, owned for 4 years with a payment of $540. When refinanced at 5.85% for 15 years the payment only went up to $621. The house will be paid off 11 years sooner. This is with a better interest rate and with removing the private mortgage insurance.
Can you refinance your house after getting a home equity line of credit?
Technically, yes, but the home equity line of credit is a lien against your home and will have to be paid off when you refinance the house. In reality, many people find that the unpaid balance on the HELOC, plus the unpaid balance on the original mortgage, exceeds the amount the bank will lend on the refinance. Before you apply for the refinance, just talk with your lender. They can probably walk you through the numbers on the phone and determine pretty quickly whether or not you have enough equity to refinance. If you bought your home several years ago, you may have to have an appraisal done to find out the maximum amount the bank will lend.
Every person should refinance their mortgage after five years.?
Every person should refinance their mortgage after five years.
Can you get a home equity loan if you have a 1st and 2nd on your property and your escrow states that you can not refinance for 3 years?
A Home Equity loan is an additional loan from your first and second mortgage. It does not require a refinance process. However, consider if you want to saddle your home with any more debt, given that you may not have much equity. If you are paying PMI, it may also change that position.
How does one know when it is time to refinance their house mortgage?
The best time to refinance your home's mortgage is when you believe that you have paid enough on your current mortgage to try to haggle for a lower rate. Usually several years.
Is It Time To Refinance?
The goal behind refinancing a mortgage is receive lower interest rates and to have the best lender possible. By following a few mortgage refinance tips a person can do just that. Knowing when to refinance is probably the most crucial part of successfully refinancing a mortgage. For some people refinancing proves to be beneficial, for others no matter when they choose to refinance it is not advantageous. To help a person decide if and when they should refinance they should consider the following: -How long they plan to live in the home -Whether or not the interest rate will be lower if they choose to refinance -How much the closing costs will be for financing their mortgage -How much equity they have built up in their mortgage -Deciding if they plan to do a cash-out refinance In most circumstances if a person does not intend on living in a home for more than a few years refinancing will probably not be beneficial.
Where does the equity go when refinancing?
You can cash out on your equity, but your payment would be as if it were a new loan at the same amount. You can also opt to apply your equity towards your new mortgage and the result would be a lower montly payment and less debt. If you use your equity towards a new mortgage you can refinance for less time and possibly have a payment around your current payment. EX: A $60,000 @6.75 for 30 years, owned for 4 years with a payment of $540. When refinanced at 5.85% for 15 years the payment only went up to $621. The house will be paid off 11 years sooner. This is with a better interest rate and with removing the private mortgage insurance.
Can you refinance your house after getting a home equity line of credit?
Technically, yes, but the home equity line of credit is a lien against your home and will have to be paid off when you refinance the house. In reality, many people find that the unpaid balance on the HELOC, plus the unpaid balance on the original mortgage, exceeds the amount the bank will lend on the refinance. Before you apply for the refinance, just talk with your lender. They can probably walk you through the numbers on the phone and determine pretty quickly whether or not you have enough equity to refinance. If you bought your home several years ago, you may have to have an appraisal done to find out the maximum amount the bank will lend.
On average, how long does it take to complete a refinance of an existing mortgage loan?
On average, it takes about one to two years to complete a refinance of an existing mortgage loan. Read more at www.mortgageloanplace.com/refinancing.html
Taking Advantage of Refinance Mortgage Companies?
With interest rates as low as they are, now may be an excellent time to refinance your mortgage. While many mortgage lenders have tightened their underwriting standards, there are still many refinance mortgage companies that are willing to give out a refinance mortgage. To get your mortgage refinance through one of these companies, there are various underwriting criteria that should be met. The first piece of underwriting criteria that should be met in order to have your mortgage refinanced is to have a good credit score. While in years past many mortgage refinance companies were willing to refinance a mortgage for anyone with a credit score over 620, the high rate of default for people with bad credit has tightened their underwriting. Today, getting a better interest rate from one of these refinance companies will require you to have a credit score of 740 or better. However, those with scores between 680 and 740 could still be approved for a mortgage refinance, but they will pay a higher rate. The second piece underwriting criteria that should be met in order to have your mortgage refinanced is to have a sizable down payment. When underwriting standards were looser, many borrowers were able to get mortgage loans with as little as 0% down. Today, mortgage refinance companies will require at least 10% equity in the home. Since housing prices have fallen across the country, you may have a hard time getting a mortgage refinanced even if you used to have equity in your home. To get approved for the refinance, you may need to put forth another down payment. The third piece underwriting criteria that should be met in order to have your mortgage refinanced is to have a low debt to income ratio. A debt to income ratio is a measurement of your monthly housing debt divided by you monthly gross income. In years past, a person could be approved for a mortgage if their debt to income ratio was less than 40%. Due to the tightened underwriting standards, the debt to income ratio requirement has dropped to around 30% for most lenders. This may require you to purchase a cheaper home.
What should I know about bankruptcy and mortgage refinance?
You can refinance your mortgage, even after a bankruptcy. Refinancing can even help restore your good credit in about two years! Sit down with your lender and talk about a refinancing plan.
What are the differences between refinancing a home and a home equity loan?
Refinancing a loan is replacing the original mortgage with a new mortgage. After the process, there will only be one loan outstanding. A refinance can only be undertaken if the home has enough appraised value to cover the outstanding principal on the original mortage. Many people refinance their mortgages to either take advantage of a lower interest rate (the rule of thumb states the rate must be at least 1% lower than the current mortgage rate) or to unlock equity derived from the increasing value of a house. When a refinance is complete, there will only be ONE loan outstanding after the transaction has been completed. Most refinanced loans last 15 to 30 years. Taking out a home equity loan is acquiring a second loan (sometimes known as a second mortgage) based on the estimated residual value of the home after taking into account the first mortgage's outstanding principal. Typically, home equity loans are taken to do home improvements, support debt consolidation (as most home equity loans, up to a certain loan to value ratio, can have interest written of on taxes), etc. The interest rates on home equity loans tend to be higher than those on first mortgages by 1% to 4%. When a home equity loan is taken, there will be at least TWO loans outstanding after the transaction has been completed. Most home equity loans last 10 years.
If you have been in a relationship for 12 years and bought a home together and you now want to leave who is responsible and how does one come off of the mortgage?
Sell the house, split the equity. To get your name off of the loan and house you'll need to have an appraisal and refinance, sell it so you can enjoy the 12 years of built up equity. Contact a local realtor for specifics. Good Luck.
Reasons to use a Refinance Mortgage Rate Calculator?
Over the past few years, the poor economy has helped keep mortgage rates at a historically low level.� Since rates are so low, most people could benefit by refinancing their mortgage.� However, prior to going through the process of refinancing your mortgage, it would be a good idea to use a refinance mortgage rate calculator. � A refinance mortgage rate calculator will take all of your personal and mortgage information and determine how much money you will save each month through the refinance.� The calculator will also factor in how much you will have to spend in fees and it will determine how long it will take for you to break even on the refinance.
