Steps to Take Before You Refinance Your Home

Rates are excellent right now and refinancing into a lower rate to lower your monthly payments might be a great idea for you. Before you call your mortgage broker or your bank you will want to follow a few steps first:

1. Take a look at your mortgage statement and find out what your current balance is and what your current rate is.

2. Pull up this website - http://finance.yahoo.com/q?d=t&s=%5Etnx – Historically and on a typical day you can take this index, the 10 Year Treasury Note, add 2% to this rate and it will give you the par rate for a 30 year fixed rate mortgage. So today the rate is 2.76%. Add 2% to 2.76% and it gives you 4.76%. This will be close to the par rate for a 30 year fixed rate loan. This is not an exact science, but it will give you a good idea. And this is the par rate so your rate will probably be a little higher if you meet all of the qualifications. This rate will be for the most qualified individuals.

3. You need to get an idea of your homes value. Pull up these two sites: www.zillow.com and www.cyberhomes.com. All you need to do it put your address in and these websites will give you an estimate of your home’s value. You can also pull up your local county property appraiser’s website and get recent sales in your area. For Hillsborough County the website is http://www.hcpafl.org/www/search/index.shtml#. This site is fantastic!

4. Now you will take your current balance on your mortgage, your second mortgage too if you have one, and divide it by the value your received from www.zillow.com or www.cyberhomes.com.

a. For an FHA loan you want your mortgage balances/home value to be 94% or less.
b. For a conventional loan you want your mortgage balance/home value to be 87% or less.

These are just a few of the steps you want to take before you call you mortgage broker, lender or bank. When you do call you mortgage person check out www.thebriteway.com.

Rates right now are excellent and if it makes sense you should look into refinancing your loan. I highly recommend a mortgage broker when you do decide to refinance…shocking huh? Considering I am a mortgage broker.

But I do have my reasons. A mortgage broker has many more options than a bank when completing a refinance or a purchase. When you contact a bank directly you only have access to their rates and programs. A mortgage broker has access to a number of different lenders and thus to a number of different programs and rates. You will be doing yourself a favor if you contact a mortgage broker.

Even better – contact both and see who can get you a better deal!

Have a great Thursday!