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PostHeaderIcon Refinance Value, Refi Calculator & Refinance Tax

Refinance value is a very important factor in refinancing your home mortgage. Value of the property will most likely determine the type of loan program that a client can qualify for.  The value and the amount you owe is how a lender determines that type of risk is being taken on. Value is determined through an appraisal, which is done by a certified real estate appraiser. This is how you will get the accurate value of your home. Most mortgage companies have their own certified real estate appraiser that come out and do an accurate appraisal. Value in a loan is also known is the LTV meaning the loan to value, which is the difference between your new loan amount and the appraised value.

A refi calculator determines weather it is beneficial to refinance your home mortgage. What a refi calculator does is it breaks down what your new payment will be. It’s a good way to see your current home mortgage rate and payment compared to a new loan rate and payment.

Refinance taxes are only included when a client decides to have escrow’s included in their payment. If your loan is 80% loan to value or under you have the option of including your taxes, this is only if it’s a conventional loan. If your loan to value is above 80% you must include your taxes, this also is rule for an FHA refinance. If a client wants or has to go the FHA route on a refinance their taxes must be included.

PostHeaderIcon Refinance Tax, Down Payment Insurance & Refi Rate

Refinance tax is a tax deduction due to a refinance. If a client got charged points these points can be deducted up not in one lump sum, they must be deduced little by little.  Another tax that is referred in a refinance is that of an escrow account. If a client does a refinance they are eligible of setting up an escrow account, which is money held by the lender for future insurance and property taxes. In most counties the taxes are due twice a year and a lender sets up an escrow balance so that the borrower doesn’t have to worry about sending the insurance and taxes.

The down payment insurance is when a borrower puts down less than 20 % on a purchase. If this is the case than a borrower will obtain private mortgage insurance (PMI), this is a way for the lender to be safe if the client defaults on the loan. Also if a client is putting down 3.5% for an FHA loan, they will have PMI on a 30 year loan. PMI is beneficial for people who only put 3 to 10% down, because they can still get the low interest rate while the lender is still protected just in case of the borrower not being able to may the payments and defaulting on the loan. A way to avoid private mortgage insurance is by putting twenty percent or more down, or paying for it up front. If doing a refinance a client might also get PMI because they do not own more than twenty percent of their home. This will be known once an appraisal is done.

Refi rate are the rate that a clients obtains after a refinance. Once a borrower does a refi they have a new interest rate. When a client does a refi it’s usually for a new lower rate that will lower their monthly payments. Refi rates all depended on the client’s credit score, loan to value and their purpose to refinance. Some purposes to refinance are to reduce the monthly payments, reduce the life of the loan, debt consolidation or cash out equity. These are all factors on the rates that a borrower can get during a refinance.

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