Tips for Mortgage Refinancing

Before starting the time consuming process of a mortgage refinance, take out a piece of paper write down the 3 most important goals you want to accomplish from home refinancing.

Most people will list lower monthly payment, save money, get cash or convert ARM into a fixed interest rate home loan.

o Lower Mortgage Payment

o Save Money for Increased Cash Flow

o Get Cash & Consolidate Revolving Debt

o Convert ARM to a Fixed Rate Term

Rarely do homeowners list things like, stretching the length of the loan term or increase your mortgage debt with a higher outstanding loan balance, but often that’s exactly what some of these borrowers end up accomplishing. Remember to hold true to whatever goals you listed on paper. Make sure the loan officers and processors that you work with are well aware of your refinancing goals and hold them accountable for delivering the mortgage terms that were quoted in the loan disclosures and “good faith estimate.”

Use mortgage refinancing as an opportunity to save money by locking in lower interest rates that are fixed for the duration of the loan term. In most cases you should increase your cash flow simply by reducing the monthly mortgage payments. If you have the option to consolidate credit card debt or adjustable rate credit lines into your mortgage without the “cash-out” feature raising the interest rate, take it.

According to mortgage rate publisher, HSH, savvy applicants should shop mortgage lenders and home loan brokers in an effort to uncover the lowest rates and most significant fees reductions. Take some advice from a former loan officer, interest rates and closing costs can vary significantly, so spend a few hours researching something that could save you thousands of dollars a year by refinancing with the best fitting mortgage program from a lender that provides you cost effective home financing.

In the event that you are turned down from a mortgage company, consider a loan modification. Foreclosure prevention services have turned into a billion dollar business. You can either contact from your existing lender directly or attempt to negotiate a mortgage rate modification yourself or locate a loan modification company that will negotiate with the lender on your behalf. If you chose to hire a mortgage modification company, make sure they have a proven track record with your lender. I strongly recommend only working with attorney backed loan modification companies because attorneys appear to have more leverage and experience negotiating lower mortgage rates and principal reductions. Some loan modification lawyers have had success settling 2^nd mortgages. For example, I have heard of $150,000 second mortgages being settled for $7,000. It sounds unbelievable and unrealistic, but when you consider the other alternative for the borrower is foreclosure and with the mortgage balances significantly exceeding the fair value of the home, the 2^nd mortgage lender would get $0 if the borrower chose the foreclosure or bankruptcy options. Read more helpful articles on 2009 Home Financing Tips. Get alerted when new financing tips are published at Jason Cardiff Tips online.