The GPM is another alternative to the conventional adjustable rate mortgage, and is making a comeback as borrowers and mortgage companies seek alternatives to assist in qualify for home financing. Unlike an ARM, GPMs have a fixed note rate and payment schedule. With a GPM the payments are usually fixed for one year at a …
Category Archive: Refinance
Articles on Refinancing
Trade Your ARM for a Fixed Rate
By switching to a fixed rate loan, you will not only reduce your payment, you will also likely lock in an attractive rate for as long as you own your home. In fact, while one year ARMs currently offer tempting introductory rates, most experts recommend avoiding them, because you could easily find yourself facing sharply …
Paying Points for a Lower Rate
In refinancing, a mortgage company usually offers a range of interest rates at different amounts of points. A point equals one percent of the loan amount. For example, three points on a $100,000 mortgage loan would add $3,000 to the refinancing charges. Analyzing various interest rates and associated points may save you money. As a …
HARP is Getting a Necessary Boost
The Federal Housing Financing Agency (the government agency responsive for regulating Fannie May and Freddie Mac) has published a news release on October 24, 2011 explaining key changes to the Home Affordable Refinance Program that is expected to help 1.8 million borrowers take advantage of today’s lower rates. The original program, has stalled with its …
PMI Payment Options
Private mortgage insurance can be paid on either an annual, monthly or single premium plan. Premiums are based on the amount and terms of the mortgage and will vary according to loan-to-value ratio, type of loan, and amount of coverage required by the mortgage company. Under an annual plan, an initial one year premium is …
Standard Adjustable Rate Mortgages and the Differences
A few options are available to fit your individual needs and your risk tolerance with the various market instruments. ARMs with different indexes are available for both purchases and refinances. Choosing an ARM with an index that reacts quickly lets you take full advantage of falling interest rates. An index that lags behind the market …
Should I Pay Points?
A point, which equals 1% of the total loan amount, is an upfront fee that reduces your monthly interest rate and total interest due over the life of a loan. This means that a one point loan will always have a lower interest rate than a no point loan. Paying points is in essence a …
Streamline Refinancing for FHA Mortgages
FHA has permitted streamline refinances on insured mortgages since the early 1980′s. The word streamline refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are: The …
Appraisal Needed To Obtain Loan
Usually, individuals applying for a loan are only interested in obtaining the loan and unfortunately are not worried about the prudence of buying the property at the agreed price. In fact, many purchasers will try to encourage appraisers to increase the appraised value so that they can purchase the home regardless of its value.The …
Refinance Considerations
When you’re making your decision, there are several things to keep in mind. If your current interest rate is significantly higher than today’s lowest rates, you may be able to roll your loan costs into the loan and still get a lower rate than you have today, thereby reducing your interest payments and saving money …
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