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Refinance Loan Rights
Refinance Loan Jargon
Money Personality
Refinance Loan Credit Facts
Refinance Loan
Home Refinance Loan Advantages
Refinancing Options
Timing A Refinance Loan
Cutting Cost To Refinance
Loans To Avoid
Credit Protection Act and the FICO Score
 

Timing a Refinance Loan

How do federal legislations mandate how mortgage companies extend credit considerations to consumers?

Generally, the majority of home purchases entail a "federally related mortgage loan." In other words, the federal Real Estate Settlement Procedures Act (RESPA) applies to the mortgage transaction.

The Department of Housing and Urban Development (HUD) has devised a settlement sheet. While RESPA does not set specific prices for services rendered during the mortgage process, the standardized settlement sheet is designed to outline the fees and charges associated with processing a loan and its closing costs.

Americans should pay close attention to the annual percentage rate (APR). The APR represents the interest rate on the loan. It is calculated by counting the interest to be paid coupled with any other fees that are added into the mix, i.e. points and administrative costs. More relevantly, when a consumer makes a mortgage loan decision, it is important to compare APRs from a variety of lenders for both new homes purchases and refinanced loans.

What is the rule of thumb when a homeowner is considering refinancing their mortgage? The basic rule of refinancing is to make sure that a homeowner’s property is worth ten percent more than the loan amount. For example, if your home is worth $375,000 and you have already paid $38,000 on the home, refinancing is ideal. Moreover, for the home owner who purchases private mortgage insurance (PMI), they may be able to get by with only five percent.

In summation, refinancing does not always warrant a substantial savings. As the monthly savings can enhance a consumer’s overall bottom-line, starting over on a home loan measures up to paying more in interest than the consumer would otherwise have paid in their loan. Particularly, it is true for the home owner show have been paying their loan for several on your loan for quite a few years.