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To determine whether or not it is a good idea for you to refinance, you should look at your specific situation and your motivation for refinancing. The most common reasons are:
If your objective is to reduce your rate and payment, you should review your current interest rate and see how much you can save with a 0 point loan and then determine if it makes sense to pay points to reduce your rate further. Check out our Refinance Break-Even Point Calculator.
If you are converting your adjustable-rate into a fixed-rate, you may actually see an increase in your rate and payment, but you’ll get peace-of-mind knowing your rate will never increase again.
If you are using the equity in your home to consolidate debt, your overall loan balance and payment may go up, but you will save monthly because you will eliminate the monthly obligations that you are paying off. Your mortgage loan originator can run numbers for you and help you determine whether or not refinancing makes sense for you. Check out our debt consolidation calculator.
Every situation is different. It depends on what your current interest rate is and what your motivation is for refinancing. If your current rate is higher than the prevailing market rate, it probably makes sense to refinance.
To get an idea of what you could save by refinancing, check out our refinance break-even point calculator and input numbers specific to your situation or call one of our licensed mortgage loan originators for professional advice.
A pre-approval allows you to get approved for a specific loan amount prior to finding the home you want to purchase. The loan is underwritten and the lender commits to a specific loan amount. A pre-approval can provide a great advantage with a seller or realtor, if someone else is also interested in the same home.
Also, if you’re thinking about refinancing and want to payoff creditors or take cash out — but not sure you’d qualify – you can apply for a pre-approval and potentially save on the cost of getting an appraisal on your home until you know if you qualify.
Any second mortgages are generally paid off through the refinance. We will consolidate both loans into one new first mortgage and you will only have one payment each month. If you’d prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance the first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.
Fees associated with refinancing vary between lenders, but there are standard fees that are typical among all lenders. These fees include 3rd party fees such as: credit report, title, escrow, notary, and recording fees.
Other fees include the appraisal fee and lender fees such as processing and underwriting. If you are paying points to lower the rate, the cost of each point that you pay equals 1% of your new loan amount. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowners insurance (if applicable). If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.
Standard documentation collected for a refinance transaction includes information regarding your income such as pay stubs covering the most recent 30 days and W-2s for the last two years, asset information such as bank or mutual fund/stock statements covering the last 60 days and current loan information such as your most recent mortgage statement and homeowners insurance declarations page.
Depending on the reasons why your credit is imperfect, there are great loan options available, including our government programs. Call and speak with one of our licensed mortgage loan originators to determine whether or not you qualify for one of our programs. At United Northern Mortgage Bankers, Ltd. we have an in-house credit analyst who may be able to help you with your credit issues.
Most refinance transactions could take up to 45 to 60 days, based on the complexity of the loan. United Northern Mortgage Bankers, Ltd. has built a smooth and seamless process, enhanced by our paperless technology that enables us to close loans faster than the average industry turn-times. We simply ask that you do your part in delivering the documentation that we need in a timely manner.
Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend on your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first-time buyers to purchase a home with a higher value. We can help you determine exactly how much you can afford.
For most homeowners, the monthly mortgage payments include three separate parts:
Yes. We will schedule the appraisal as part of reviewing your home loan application and you will receive a copy of the appraisal at closing.
If you’re refinancing a first mortgage, and have less than 20% equity in your home, mortgage insurance, such as private mortgage insurance or PMI, is usually required. The mortgage insurance premium is typically included in your monthly mortgage payment.
You have to show proof of homeowners (or hazard) insurance at closing, so you must have insurance in place. Start shopping around early in the process to get the best deal. An experienced agent can give you some idea of how much insurance will be for different types of homes, which may influence where you choose to look for your new home or what type of home you want to buy.
First-time home buyer
Visit our Application Checklist for a full list of items needed.
The loan approval and funding time frames vary depending on the type of transaction and the complexity of your personal finances. On average, the process can take from 14 to 60 days.
The lock-in rate is the interest rate you choose and will be the interest rate used to factor your monthly payment. The lock-in secures the interest rate during the process of your loan approval. The rate holds as long as your loan is processed and closed prior to the rate expiration date. This date is given to you when you lock-in the rate.
You can lock or float your interest rate at any time during the process of your loan. One of our licensed mortgage loan originators will discuss these options with you upon taking your loan application.
The interest rate doesn’t change over the life of the loan on a fixed-rate loan. An adjustable-rate mortgage (ARM) has an interest rate that is fixed for a set number of years and then will go up or down based on a market index such as the LIBOR. Consider factors such as the length of time you plan to stay in your home.
If you plan to stay in your home for a long period of time, a fixed-rate may be best for you. An adjustable-rate might be better if you plan to sell your home before the rate becomes variable, since initial ARM rates are typically lower than fixed-rate mortgages. Consider whether you expect work promotions or a change in your family situation, such as children. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.
Depending on the state where your property is located, you can either sign in your home or at a designated settlement location such as an escrow office or attorney’s office. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier’s check to pay the closing fees and other applicable closing funds, unless you decided to finance the closing funds into your new loan.
Once the loan documents are signed and delivered back to us, your loan will close in 3 to 5 days. If you are taking cash out of the equity in your home, you will receive your funds 1 to 3 days after your loan closes.
Second / Vacation homes
It takes at least 10% down if you have a very strong application. In other instances at least 20% may be required.
Yes, a great option is a Home Equity Loan. According to The National Association of Realtors about 1/5 of buyers tap into equity from their primary residence to make the downpayment on a second home.
The credit score required for a second home or vacation home is a little higher than purchasing a primary one.
Yes. VA loans provide up to 100% financing, providing qualified veterans the opportunity to purchase a home. Speak with one of our licensed mortgage loan originators to hear how we can assist you with a VA loan.
The credit score required for a second/vacation home is a little higher than purchasing a primary one.
You can get our powerful mortgage app that simplifies the mortgage process in two ways: