I AM LOOKING TO REFINACE MY HOUSE AND TRYING TO TAKE SOME CASH OUT BUT DONT KNOW WHICH COMPANY TO GO WITH.
I refi’d with them several years ago and I financed with them many years ago. No problems either time. Good website and online resources.
Can any one explain to me, in layman’s terms, how refinancing a home loan works and maybe when I should do it? Thanks!
There are 2 general type of refinances, 1 is a "rate-term" where you are reducing your existing interest rate and/or term or both. It is generally a rule of thumb that if your saving 2% or more of your existing rate then this type of refinance would have benefits to the average homeowner. Usually have a max loan to value of 95% (sometimes higher depending on program) 2nd type of refinance is called a "cash-out" refinance. This type of refinance gives a homeowner cash after closing that can be used for a variety of reasons like paying off credit cards, paying off HELOCS & auto loans, and even home improvements. These loan to values typically have a max of 80%. This is also a 3rd type called a "remodel" or "rehab" refinance which is used less often due to the proceeds of this type of loan must be used to remodel or rehabilitate the subject property with a usually minimum of $5000 in such improvements. There are typically draws, lien releases, construction builder approval, plans, specs and cost breakdown but do allow for higher "loan to values" and lenders can use the "subject to conpletion" value of the property.
LOAN TO VALUE= the amount of liens divided by the fait market value of the subject property. ie; 80k loan with a value of 100k=80%.
I put a couple of websites below that might provide additional information. Hope it helps!
Does loan modification cost me more than loan refinancing. Is the loan provider interested in doing loan modification.
Read any offers carefully.
A loan refinancing classically involves your having positive equity in the property and are *only* looking to lower the interest rate. If your mortgage is underwater (you owe more than it’s worth), you can’t refinance.
A loan modification usually does NOT involve principal. It may involve lowering the interest rate (great if it does) or it may lower the payments (changing a 30 year mortgage to a 40 year one). If you are late on any payments, they will be added to the end of the mortgage.
A very *few* loan modifications will lower the principal owed. This requires permission from the lender (which may not be the bank) and will permanently cost them money. You would be required to lower the basis in your home by the same amount. (If the house ever recovers, this is taxable income when you sell as it is *not* covered by the $250K exclusion rule.)
I have a home loan with IndyMac bank since summer of last year. The interest rate is 6.5%. My credit is good, mid 750s. I was wondering if banks (if you have this particular bank your info would be appreciated) refinance with their own current customers, and what the fees might be to do this.
And I want to refinance strictly for abetter interest rate. I have only paid off a few thousand of the loan, and I put zero down.
Yes banks do refinance their customers. But some banks have certain restrictions. Also some places have a period when you cannot refinance if you just did less then a year.
fees vary from bank to bank. Some banks don’t charge a fee for their customers who have accounts with them.