Are You Considering a Refinance?

Homeowners who are considering re-financing their home may have a wealth of options available to them. However, these same homeowners may find themselves feeling overwhelmed by this wealth of options. This process doesn’t have to be so difficult though. Homeowners can greatly assist themselves in the process by taking a few simple steps. First the homeowner should determine his refinancing goals. Next the homeowner should consult with a re-financing expert and finally the homeowner should be aware that re-financing is not always the best solution.

Determine Your Goals for Re-Financing

The first step in any re-financing process should be for the homeowner to determine his goals and why he is considering re-financing. There are many different answers to this question and none of the answers are necessarily right or wrong. The most important thing is that the homeowner is making a decision which helps him achieve his financial goals. While there are no right or wrong answer to why re-financing should be considered there are, however, certain reasons for re-financing which are very common. These reasons include:

• Reducing monthly mortgage payments
• Consolidating existing debts
• Reducing the amount of interest paid over the course of the loan
• Repaying the loan quicker
• Gaining equity quicker

Although the reasons listed above are not the only reason homeowners might consider re-financing, they are some of the most popular reasons. They are included in this article for the purpose of getting the reader thinking. The reader may find their mortgage re-financing strategy fits into one of the above goals or they may have a completely different reason for wanting to re-finance. The reason for wanting to re-finance is not as important as determining this reason. This is because a homeowner, or even a financial advisor, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the homeowner.

Consult with a Re-Financing Expert

Once a homeowner has figured out why they want to re-finance, the homeowner should consider meeting with a re-financing expert to determine the best refinancing strategy. This will likely be a strategy which is financially sound but is also still geared to meeting the needs of the homeowner.

Homeowners who feel as though they are particularly well versed in the subject of re-financing might consider skipping the option of consulting with a re-financing expert. However, this is not recommended because even the most educated homeowner may not be aware of the newest re-financing options being offered by lenders.

While not understanding all the options may not seem like a big deal, it can have a significant impact. Homeowners may not even be aware of mistakes they are making but they may here of friends who re-financed under similar conditions and receive more favorable terms. Hearing these scenarios can be quite disheartening for some homeowners especially if they could have saved considerably more while re-financing.

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Can I Buy a Home?

The idea of owning a home seems like a dream to many who have spent their lives renting and leasing houses, apartments, and condominiums. However, applying and qualifying for a loan does not have to be as complex as most people seem to think or try to make it. In fact, with a little research and preparation, getting a mortgage loan can be as easy as finding the right lender. What exactly is involved in applying for a mortgage loan, and what qualifications do you need to meet to be approved?

When loan officers are determining whether or not someone qualifies for a mortgage loan, they consider several factors, not the least of which are actual income and debt to income ratio. However, credit scores, previous record of payment, and willingness to meet the loan requirements and make payments are also considered. Previous payment records and any delinquencies on your credit report affect your credit score. An overextended credit ratio can also negatively affect your credit.

However, these are not the only factors taken into consideration in applying for a mortgage loan. The game is all about numbers. The more satisfactory numbers you can provide, the more likely you are to qualify for a loan or receive a larger loan upon approval. Two separate income ratios are used to determine your level of qualification for a mortgage loan.

The first is the housing expense ratio, which compares your level of income to the expense involved in paying the mortgage, mortgage insurance, property taxes, and hazard insurance. A maximum percentage is set for this per month. Though maximum rates vary by area and loan program, a typical maximum percentage of 30% of your monthly income may be spent on these costs. In order to meet this goal, a house of a lesser price may be the best option, should you not qualify on the first attempt.

The second ratio is the total expense ratio, which involved the relation of your current debts to your income. These expenses may include car payments, monthly utility bills, and other revolving debts or monthly expenses. Again, while maximum allowances may vary, a typical maximum percentage for this ration may be approximately 35%. These minimum qualifications are just the first step in the process.

Another “number” that must be considered is the amount of cash in hand for a down payment. A typical down payment requirement is 10%, meaning that a house sold for $300,000 would require cash in hand totaling over $40,000, after closing costs and other fees. If an individual does not have a satisfactory down payment, a mortgage loan may be denied. If you are significantly within the range of one of these two ratios but slightly above the other, the lending agent may be able to adjust their risk factor and approve your loan application anyway.

Olympic Northwest Mortgage	Bremerton, Wa Real Estate
Va Home Loans	Silverdale, Wa Real Estate
Olympic Northwest Insurance	Wholesale Lenders