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PostHeaderIcon Mortgage Refi & Mortgage Questions

A mortgage refi is Refinancing is explained by the replacement of an existing mortgage loan with a new mortgage loan consisting of different terms. Refinancing is the most common consumer refinance. To refinance for a lower rate than a borrower current rate is called a rate and term. Rate and term can either be just changing your interest rate and or change the term of your loan. Loans typically come in a 10 years, 15 years, 20 years, or 30 years loans. Also while paying a mortgage a borrower builds up equity in their home, when they refinance a client can cash out some of their equity. Another common reason why people refinance their mortgage is to pay off other debt, this will make your loan amount go up but it can be very beneficial to get rid of some of that debt. When refinancing this can help a borrower by lowering their monthly payments, and since the mortgage payment is most likely your largest payment than why not try to have it as low as possible. You can obtain a lower payment by either refinancing for a lower interest rate or extending the life of your loan, like taking a fifteen year loan to a thirty year loan.

When refinancing your home their come refinance costs that come with it. These fees tend to be between two to six perfect of the loan amount. With most company fees are typically lender fees, third party fees and pre-paid items. Lender fees can consist of origination fee, points, application fees, and credit report and appraisal fee. Origination fees are what the lender charges for the work in evaluating and preparing home mortgage loan. Points are the charges given by the lender at closing to increase the lender’s yield spread and the stated interest rate on the mortgage loan. Pre-paid items are the taxes and insurance these are considered a fee since a borrower has to pay them regardless of refinancing or not. Third party fees can consists of closing costs, title and title insurance. Title and title insurance fees is the cost of examining the public record to confirm ownership of the real estate property. This fee also takes care of the cost of a policy, typically issued by a title insurance company, which insures the borrower to a specific amount for any loss because of discrepancies in the title to the borrower property. Also other refinancing costs can be because of getting into an FHA loan, there is about the same fees just one extra. This extra fee is PMI which is private mortgage insurance, this insurance is just incase the borrower defaults on the loan. FHA has this because they it’s a loan to higher risk borrowers.

There are many different types of mortgage questions. These questions can all be answered by a licensed loan originator. The most common mortgage questions are what PMI is? PMI is private mortgage insurance, this is given to all FHA loan and on conventional loans it is given if the LTV or loan to value is above eighty percent. Another most common question is what are escrows and do I have to have them included. The answer to this question is escrows are the taxes and insurance of your property and they can be including in your loan if you choose that. All other questions about your mortgage can be answered by a licensed loan officer.

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