Refinance – a better prospect than forfeiture

Posted by discuss | Mortgage | Tuesday 22 June 2010 1:58 am

If you have a number of loans taken under different heads, and of late have problems in paying up your monthly installments and a question keeps coming in your mind – should I refinance my mortgage? You don’t need to pay a fortune trying to refinance your mortgage to reduce the interest rates to manageable levels. Debtors can modify their mortgage terms by paying your lender a few hundred dollars and get the mortgage refinanced by another lender.

Should I refinance my mortgage, even if I am paying all the mortgage installments in time? Yes you should if the current interest rates are considerably lower than the prevailing rates at the time you took the loan. The present marketing scenario is presently in a state of flux. Therefore it won’t hurt if you asked for a refinance.

In a normal course a refinance is not much as regards to hassles and procedures. Once you decide to approach a lender you have to go through a simple procedure of verification and if done a few papers to sign and you get a refinance. Should I refinance my mortgage if the installments are beyond my means? Yes you can by extending the term of repayment. Refinance lenders increase the period of repayment and reduce the equated monthly installments.

The approval or disapproval of the refinance plea depends upon a few factors, notably the credit score. It is also known as the FICO Score. The FICO score is calculated using credit reports and influences. Should I refinance my mortgage with my original lender? Yes you should approach your original lender first. You can explain him the need for a refinance and then hammer a deal with a lower interest rates. Anyone who has obtained a loan and paying more than 8% interest rates should approach their lender for a refinance.

Going for a refinance with the original lender can save a lot of paperwork since you don’t need to submit your papers again. Since the mortgage rates have fallen drastically, it will be prudent on the part of the lender to agree to your request of refinance since he does not want to lose a customer.

You need to ask the right questions to the lender if you need a refinance. You need to know if you can save money on reduced closing costs. You also need to know if there an automated underwriting systems operated by Fannie Mae and Freddie Mac. Are there any special offers for existing customers?

People who are happy and satisfied with their mortgage lender should ask the first question. Sometimes the lender and the refinancer may not be the same as lender often use two different heads to collect the payments. Between these two companies a large part of the customer information is already known and documented. Therefore the lender need not hire other services to know the borrowers. The question should I go for a refinance depends on the market interest rates and your ability to pay the equated monthly installments.