Refinancing: Let your NJ Mortgage company help
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Your New Jersey Mortgage Company loves to keep you informed about the latest information in the housing market.Refinancing your home is an adventure that can be quite grueling and difficult when trying to take it on by yourself. Fortunatly, your NJ mortgage company is here to help! Make refinancing your home a positive experience by being prepared and knowledgeable about the process. Contact your New Jersey Mortgage Company today for more details.
New Rules of Refinancing Your Home
Inertia accounts for some of the reduced traffic to loan officers—after all, if you snagged a 5% rate three years ago, you’re probably still patting yourself on the back. But a lot of borrowers face serious obstacles to lowering their rate. Six years after the housing bust, mortgage lenders are still skittish about making loans. Even the biggest banks, now enjoying record profits, worry that if their loans default, the agencies that guarantee them—Fannie Mae, Freddie Mac and the Federal Housing Administration—will find errors in underwriting and force the lenders to buy back the loans and swallow any losses.
Lenders also anticipate new mortgage rules, as yet unwritten, as required by the Dodd-Frank financial reform law. Hypercautious in the face of uncertainty, the lenders have overlaid the agencies’ stiff lending guidelines with even stiffer ones of their own. Despite rising home prices in many cities, more than one-fifth of U.S. homeowners are still underwater on their mortgages—that is, they owe more on their loans than their homes are worth. They can't refinance unless they qualify for the Home Affordable Refinance Program (HARP) or FHA Streamline.
You'll need at least 5% to 10% equity in your home to get past the application process. (You can find a rough estimate of the market value of your home at Zillow.com. Even better, ask a real estate agent, who may get your business down the road, to provide a market valuation of your home based on recent comparable sales.) To make a refi worthwhile, you must keep your house long enough for the savings in monthly payments to cover the closing costs (closing costs average 2% of the loan amount, according to Bankrate.com). Beef up your credit profile if you can, and prepare to fork over heaps of documentation.
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