Atlanta Refinancing: Best Mortgage Refinance Rates
Atlanta Refinancing
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Atlanta refinancing can be streamlined. The Federal Housing Association (FHA) has permitted streamline Atlanta mortgage refinance on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction.
Atlanta refinancing lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.
Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline Atlanta refinancing can also be done without appraisals, but the new loan amount cannot exceed the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.
Perhaps the most common reason for a streamline Atlanta home refinance is reducing the cost of your overall loan. If you bought your home when interest rates were high, you could be paying less interest on your house (contributing more to the principal) if you refinance. Sometimes, you can cut a 30-year loan to a 20-year loan and have the same monthly payment.
The basic requirements of a streamline refinance are:
- The mortgage to be refinanced must already be FHA insured.
- The mortgage to be refinanced should be current (not delinquent).
- The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
- No cash may be taken out on Atlanta refinancing using the streamline refinance process.
Detailed instructions to the lenders are contained in HUD Handbook 4155.1 REV-4, Change-1, Paragraph 1-12. Contact your lender to get started.
Before even starting an Atlanta refinance, there are certain issues you need to consider which may affect your decision to begin the process. First, you need to make sure you have a good reason to refinance. For example, refinancing to pay off or consolidate higher interest loans could be a good idea, but refinancing to take an expensive Hawaii vacation may be a mistake in the long-term! Common questions include:
1. How much will an Atlanta refinance cost?
Most people don’t stop to actually work out how much Atlanta mortgage refinance will cost them. They just see a lower interest rate than they’re currently paying and presume they will be saving money in the long run. However, the closing costs alone can take two to three years to amortize. There may be other costs involved as well, such as pre-payment penalties on your existing mortgage.
2. What is the real annual cost?
Mortgages have more costs than just interest charges, including commissions and fees. The total cost of a mortgage is known as an effective annual percentage rate. You need to compare the effective APR of your current mortgage to other Atlanta refinance offers because sometimes lenders appear to offer a better interest rate but the overall effective APR is either the same or even higher.
3. Do you have enough equity?
To qualify for a decent Atlanta refinance offer you need a minimum 10% equity, but if you have 20% equity, you may qualify for better rates. Besides having sufficient equity in your property, you will also need a decent credit score, as a mediocre one will only get you higher rates. In this case refinancing could end up increasing your monthly payments rather than reducing them. Lenders will also verify your employment situation, your income and your assets.
4. Should you go back to 30 years?
When signing an Atlanta refinancing contract you will probably find that you will be extending the mortgage to 30 years. It may be better to choose a shorter term for the loan as you will build up equity faster and once your mortgage is paid off, your home can be your safety net in case anything happens. Once you are the outright owner of your house, you will be able to take out a credit line on your home if you need it.
There are many reasons that Atlanta refinancing can be a benefit to you - These include getting a lower interest rate on the loan (hence a lower monthly payment), getting cash out of a home’s equity or removing private mortgage insurance (PMI) from a loan. For saving thousands, consolidating debt or tapping into your home equity, refinancing could be the solution to your problems.
Atlanta Mortgage Refinance: Most local
lenders also do refinancing. Rather than lose your business, the
company that currently holds your mortgage will often lower the
interest rate on your mortgage to the prevailing market rates
through a refinance – check online for current rates, and then
ask your lender to match them.
Atlanta refinancing Rates: Compare market interest rates to see
what result a refinance would have on your bottom line. Most
people do Atlanta mortgage refinance in order to get a
lower monthly interest rate. This leads to less total interest
paid over the life of the loan, which means more cash in your
pocket. Perhaps when you bought your house the market rate was
6%. Now market rates are 5%. Most financial advisors say in
order for a refinance to be financially viable, market rates
must have fallen 1% or more, since there are fees associated
with a refinance (attorney fees, origination fees, etc.).
Cash Out Refi: Although sometimes not the smartest financial idea, families that need fast liquid money can choose to cash out some of their home equity when completing a refinance. If you bought your house for $150,000 and it is now worth $195,000, when you refinance, the lender may let you borrow the full $195,000 and pocket $45,000 cash for immediate use.
Atlanta mortgage refinance to Remove PMI: You can save tens or even hundreds of dollars per month by removing PMI from your monthly mortgage payment. Lenders assess PMI on loans that have less than a 20% down payment. This protects the lender in the event of your default. Lenders assume once you have more than 20% of your own money invested in a house that you are less likely to run out of the loan due to the amount of personal money you have sunk into the home. Some mortgage contracts automatically remove PMI once the owner's equity reaches 20%; other contracts require a refinance and appraisal to take off PMI.
Shop around. Atlanta refinancing rates, fees and service charges vary wildly among Atlanta mortgage brokers. Always start the refinance process with your current mortgage provider, but do not feel obligated to use the company's services if they do not provide the best deal.
Atlanta refinancing will continue to be helped by the government refinance program. The Federal Housing Finance Agency has extended the Home Affordable Refinance Program by an additional year, with a new expiration date of June 30, 2011. This refinance program, set up by the Obama administration as a program part of the Making home Affordable Program, is for Atlanta borrowers who owe up to 25% more than their homes are worth. The Atlanta home refinance program lets borrowers who have paid their mortgages on time refinance to a lower interest rate to avoid potential foreclosure in the future.
Nationally, over 220,000 homeowners have refinanced their home with this program letting them save long-term dollars on their mortgage payments. The program was set up with the intention of helping 4 to 5 million homeowners.
Atlanta home refinance involves getting a new loan to replace
the existing loan. The major feature of the refinancing element
of this program is allowing the loan amount to exceed 80% of the
home’s
value. Previously no new loan could be written that was higher
than
80%, with the drop in prices this change in standard should enable
many to take advantage of the
current low mortgage interest rates.
Home Owner General Qualifications for Atlanta Home Refinance Program
The home to be refinanced is owner occupied
The home loan is controlled by Fannie Mae or Freddie Mac (it must be a conforming loan )
The mortgage payments are current (there has not been a payment more than 30 days late in the last 12 months)
There is sufficient income to support a new mortgage
The existing mortgage is between 80% and 105% of the home’s current value (This is known as the loan to value ratio or LTV)
Not all properties qualify for Atlanta refinancing under this program. Single family residential real estate that does not qualify include:
Investor Owned Properties
Second Homes
Have Loan to Value Ratios under 80%
Loans are not Controlled by Either Fannie Mae or Freddie Mac
See http://makinghomeaffordable.gov/