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How savvy are you about mortgage financing or refinancing?

May 14

filed under: Buying A Home, Real Estate, Refinancing

Home refinanceWell according to a recent Mortgage Marketplace Survey done by Zillow, many of you may not be as savvy as you think you are. I am not going to quote the percentages of how many of you are not savvy in the various financing areas that the survey covered, but choose instead to briefly enlighten you on some definite misconceptions that you may or may not have when it comes to getting a mortgage or refinancing one.

To begin with if you are a first time home buyer, YES you may be able to get a home loan with a down payment of less than 5 percent. There are many lenders out there that will consider this type of down payment provided you have the right qualifications and you have taken the time to look for them.

If you have been pre-approved for a mortgage, no, no, no and I mean NO, you are NOT obligated to close your loan with the lender that pre-approved you. I’m sorry but whoever told you that does not know what they are talking about.  If you have another lender you want to finance your home with by all means do it, however be aware that you may need to get another pre-approval from the alternate lender you choose.

Now here is one we run into all the time. Just because you have done business with a bank for many many years does not mean you will get the best interest rates and the lowest fees on a new mortgage. There are many other lenders out there that want your business and will prove it by giving you a better interest rate and lower fees.

Yes, yes, yes and I mean YES if you are underwater on your existing mortgage you have a very good chance to refinance through the Home Affordable Refinance Program (HARP). They don’t care if you are underwater, that is what the program is all about, they really want to help you get a lower interest rate and lower your monthly payments so that you can afford to stay in your home.

Last and this is really important, it does not, and I repeat does NOT take 7 years of waiting to qualify for another home after a short sale or foreclosure. Depending on the type of loan and the size of the down payment, your wait time after a short sale may only be 2-4 years. The wait time after a foreclosure can be anywhere from 3 – 7  years. You may want to check out my previous blog on this very subject.

So if you still have some questions regarding financing or refinancing, give me a call. We have some great lending resources that we can put you in touch with. This is a great time to buy or refinance a home. You don’t want a misconception preventing you from taking advantage of the great interest rates that we are experiencing today.

Written by Howard Harris