Refinancing A Home

Learn about refinancing your home, and discover helpful resources to get you "in the loop"

Refinance Loan Overview

Learn about the process of refinancing a home loan
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Refinance Loan Q+A

Answers to some of the most-popular questions regarding home refinancing
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Refinancing Tips & Advice

Helpful links to related information about refinancing a loan
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Refinance Loan Overview

As a homeowner, refinancing your home loan may or may not make sense. Lately you may have heard people refinancing due to low interest rates while this is true there are also other things to consider when deciding to complete a refinance:
  • Is debt consolidation an option?
  • Does the monthly savings justify costs associated with refinancing?
  • What does the interest savings over the life the loan look like?
  • Can you pay your house off faster by refinancing?
Free Resource: Sonoma County Mortgages provides a free mortgage loan calculator to get help you calculate and compare your current loan program to other available loan programs and rates available in the marketplace, so you can decide if refinancing makes sense for you.
When you’re ready to begin your refinance, we can give you up front numbers so you can know you’re making the right financial choice. By completing an online mortgage rate quote or online pre-qualification form, we can give you loan options and interest rates so you can do your proper research.

Tell us the loan programs you’re interested in or let us suggest some loan programs for you based upon your financial situation. Choose from 30 year  to 15 year loans. We make the the researching phase easy so you can get a combination of the best possible loan terms with a competitive interest rate.

Decide on refinancing options:

  • Loan Term: 30 year fixed, maybe a 25 year fixed or even a 15 year fixed?
  • Discount Points: discount points versus no discount points cost/benefits?
  • Occupancy: primary residence, second home or investment property?
Many homeowners choose to refinance for good reasons. With today’s low mortgage rates you might be able to save money on your monthly mortgage payments. Home loan refinancing can also give you cash out to consolidate debts or even improve your credit rating. Maybe you have a first mortgage and a second mortgage on your property? Mortgage refinancing can help you consolidate your first and second mortgage into one new loan. Maybe you’re considering paying off your mortgage in full at some point? You can refinance your property into a shorter term loan to pay off your mortgage faster.
 
Whatever your reason and whenever you’re ready, Sonoma County Mortgages can help you attain all the benefits of refinancing custom-tailored to your financial situation.

Refinance Loan Q+A

Whether you’re refinancing your first home, or your 50th home, there are many questions that go along with the process. Below, you’ll find some of the most-common questions we’ve received about refinancing a home loan.
How do I make a bi-weekly mortgage payment if my lender won’t bill me that way?
This topic comes up frequently. Most lenders will not set up a biweekly mortgage payment.

Making a biweekly mortgage payment is incredibly beneficial when considering the longer term interest costs over the life of a loan. It’s not uncommon to be able to shave many years off the payoff time by simply making a biweekly mortgage payment. However as cumbersome as it may be with your servicer, to try to set up that type of payment arrangement- there is an easier way.

Make the 13th mortgage payment per year

Simple enough right? Simply doubling up a payment one month during each fiscal year, effectively that will have the affect on your interest savings and principal balance pay-down as making a biweekly mortgage payment every two weeks.

Put another way…

Make a 13th payment

For example let’s say your mortgage payment is $2500 per month,  that’s $30,000 in mortgage payments you make annually.

$2500 ÷ 12=$208.33 per month. If you were to make a payment at $2708.33 per month, that is effectively the same thing as a biweekly mortgage payment or 13th payment each year.

Looking to save money on a new mortgage? Start today by getting a complementary rate quote for your situation. We can even run scenarios for you showing you what the net tangible benefit savings could do by prepaying your mortgage over time.

Do Tax Losses on a Closed Business Hurt My Chances to Qualify for a Mortgage?
No as long as the business is actually closed it should not hurt your ability to qualify from an income standpoint. For example let’s say you opened up the side business a couple of years ago, claimed some monetary losses on http://bayarearealestatetrends.com on your tax return, but have subsequently closed the business. Lender will not need to take the losses as a liability against your income which should not have any effect on your borrowing power.

What you’ll need

  • documentation from the Secretary of State showing the business is in fact closed
  • an explanation of why the businesses closed and why the business losses were taken

However, if you presently own a business that is still running and you’re taking losses or showing lower income to avoid paying higher taxes which is customary showing larger profits, you could very well run the risk of not having enough income to qualify for mortgage loan you may desire. This is the conundrum if you will self employed borrowers deal with.

On one hand of the spectrum if you show maximum profits you’re going to pay income taxes on those profits, but at the benefit of being able to qualify for a loan substantially more easily. The other option is showing lower profits, lower income which keeps the tax man at bay, but at the expense of risking the chances of qualifying for a home mortgage.

Are you self-employed or own your own business? Been told you can’t qualify for a mortgage? Get a second opinion by getting a complimentary mortgage rate quote for your purchase or refinance today!

Should I Pay For An Appraisal To Refinance My Home?
Yes, an appraisal is the only way to determine what your home is worth if your loan is not owned by Fannie Mae or Freddie Mac eligible for Harp 2 Refinance.

Rewind the clock a couple of years. Sonoma County homeowners had very little equity many were even upside down as real estate sales were sluggish and the demand for housing was at an all-time low. Since then homeowners have accumulated more home-equity as a more exuberant economy has emerged.

Jobs are starting to come back, unemployment is continuing to fall and housing demand has increased threefold. Many who didn’t have any home equity before now have a chance to get out of their high interest rate loan or arm set to adjust.

So…should you pay for an appraisal? Yes, so long as you can follow the paper planA good lender will want to make sure you can qualify before ordering an appraisal.

Here’s what we mean:

Apply with a mortgage lender first, and provide them your supporting financial documentation for a preliminary qualification review. You don’t want to shell out good money for a home valuation and then have a problem with income later on- granted that could happen anyway, but chances mitigated doing a preliminary qualification review.

Once it’s determined by the lender that you will qualify, then it would make sense to pay for an appraisal and move forward in the loan process.

  • Expect an appraisal to be approximately $450-$475 with most lenders for primary homes
  • Expect upwards of $650 for investment property mortgages

Considering mortgaging a primary home? How about an investment property or second home? Whichever it is, start today by getting a complementary mortgage rate quote.

Should I Be Concerned About A Light Documentation Loan Offer?
Absolutely YES, and here’s why:

On January 10, 2014, qualified mortgages took shape for the entire mortgage industry mandating lenders specifically document of borrowers ability to repay. Because of of these new regulations, if you receive a mortgage quote offering less the normal documentation (such as not needing a pay stub for example) if you are a W-2 wager, or only needing one year of income tax returns among others, this should raise questions.

The first question you would want to ask yourself is “How is this lender able to do something that others cannot?”

Mortgage lenders don’t have a monopoly on the market.

All mortgage money comes from the same place with the exception of portfolio lenders, which are usually local banks and credit unions who have niche products but still have ability-to-repay requirements (and still requires full income documentation.)

Following is the traditional list at the minimum, approved lender would request of you when determining whether or not to approve you for a mortgage:

  • Two years of tax returns
  • Two years of W-2′s
  • Thirty-day pay stubs
  • Sixty-day bank statements

Additionally, during the loan qualification process it is essential to let the mortgage lender run your credit report. There’s no way for them to issue a credit decision without a credit report in the name of the lender whom you are applying with. Credit reports are not transferable amongst lenders.

Beginning The Loan Process

  1. Put together the financials
  2. Apply with a lender
  3. Allow the lender to obtain your credit report. (Doing this will allow you to accomplish your main objective which is to determine whether or not the figures are affordable in alignment with your goals and expectations.)

Need a mortgage? Start by receiving a fast mortgage rate quote to purchase or refinance a home, it’s free!

Can I Get A Mortgage With Limited Or No Supporting Financial Documentation?
Generally, NO, and here’s why:

In order to get a mortgage these days, you must be able to support an ability to repay. An ability to repay the debt by virtue of having income to offset the liability is what home lenders look for.

When purchasing a home, plan on providing:

  • tax returns,
  • W-2s,
  • pay stubs, and
  • bank statements

When refinancing, plan the same with one caveat:

If you refinance with your lender (i.e. the servicer of your loan collecting your monthly mortgage payment), they can from time-to-time originate a new loan for you without necessarily needing financials.

In order to accomplish this feat, you will need excellent credit and an extremely low debt-to-income ratio, as well as a loan to value of 60% or lower.

For the majority of consumers seeking loans, the following information is needed to get qualified:

  • Tax returns for the most recent last two years
  • W-2s for the most recent last two years
  • 30 days pay stubs
  • Bank statements for the most recent last two months
  • Profit and loss statement if you’re self-employed with year-to-date income

Looking to get qualified for a mortgage? Try our home affordability calculator or contact Scott Sheldon today!

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Refinancing Tips & Advice

Here are some of our most-popular articles and tools relating to refinancing a home.

Making Homes Affordable Program Harp 2 Refi

See How The Harp 2: Refinance Program works, which has no Loan To Value restriction
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Does It Make Sense To Refinance?

2 tests to determine if refinancing makes sense or not.
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Discover how the refinance loan process works from start to finish

Use this free chart as guide to your refinance loan.
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Why A Second Opinion Refinance Quote Is A Good Idea

Discover why receiving a second opinion refinance is the smartest choice.
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Sonoma County Home Loan Refinance: A "How to Guide"

How to decide when to refinance your home
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The role second mortgages play in refinancing your home

If you are going to be refinancing, and you have a second mortgage loan how that component works
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How to refinance your home without starting over at 30 years

Yes it’s possible you can refinance without starting a new loan term.
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Contact Scott About Your Home Loan Questions

Please email me your question or scenario and I'll get back to the following business day. -Scott