Home Mortgage
Refinancing Kit 2.0 Putting all your ducks in a row in order to acquire the best
loan deal at the lowest rates possible.
Table Of Contents:
1. Mortgage Refinancing Preparation Checklist 2. Mortgage Refinancing Tips to save thousands of
dollars over the life of your loan 3. How to Refinance Guide... Includes:
Know your Fico Score
How to shop low rates
online
How to choose a lending
marketplace
How to interview lenders
and brokers 4. Bargain Loan shopping tips to live by 5. Know Your Rights 6. Lender Secrets - 30 important facts they don't want
you to know 7. Access to mortgage payment reduction calculators 8. Live mortgage rate index 9. Mortgage rate search tools 10. Free mortgage rate watch alert newsletter
PlusFree Bonus Tips Tools and Resources!
1. Mortgage Refinancing Preparation Checklist
Documents Needed:
Social security number(s)
Name and address of all employers from the last two
years with dates of employment
W-2 forms for the last two years
Paycheck stubs covering the most recent months pay
Bank statements for the previous two months.
Also include institution name, address, account number(s) and balances
for all accounts.
Account number(s),
balance(s) and monthly
payment(s)
for all outstanding creditors: i.e., credit cards, car loans,
student loans, signature loans, etc.
Previous addresses for the past two years.
Make and year of each automobile owned or leased, and
current market value if owned.
After gathering the needed documents fill out the form below. Note:
This form does not save. Highlight and print when completed.
Borrower Name
Cosigner Name
Social security
number(s) Borrower
Cosigner
Name and address of all employers from the last two
years with dates of employment
W-2 forms for the last two years
Borrower
Cosigner
Weekly,
monthly, annual salary
Paycheck stubs covering the most recent months pay
Borrower
Cosigner
Weekly
Weekly
Monthly
Monthly
Salary
Salary
Bank statements for the previous two months.
Also include institution name, address, account number(s) and balances
for all accounts.
Bank
Address
Acct#
Bank
Address
Acct#
Account
number(s), balance(s) and monthly payment(s)
for all outstanding creditors:
Credit cards
Type
Limit
Amount Owed
Car loans - Make and year of each automobile owned or leased, and
current market value if owned.
Student loans
Type
Borrowed
Amount Owed
Signature loans
Type
Borrowed
Amount Owed
Previous addresses for the past two years.
Address
City
State
Zip
Other
Address
Address
City
State
Zip
Other
Other Information That May Be Required:
If you are divorced: a copy of complete divorce
decree along with any amendments.
If you pay alimony or child support: a "friend
of the court" letter saying payment amount and showing the
account is current or 12 months cancelled checks if paying directly to
recipient.
If you are self-employed, employed in a family
business, a tradesman, your income is based on commissions or you own
rental property: You need tax returns for the past three years complete with all schedules, and a signed year-to-date profit and loss
statement.
If your present home is for sale or sold: a
copy of the listing, purchase agreement or closing statement
If you have been renting during the past year: a list
of names and addresses of all landlords (12 months cancelled checks
will expedite your loan process).
If you have had a mortgage or land contract within
the past year: provide the name, address and account number of
lender (12 months cancelled checks will expedite your loan process).
If liquidating savings bonds or stocks for closing:
provide proof of ownership.
For stocks: photocopy of most recent stock
ownership statement or photo copy of stock certificates.
If You Are Refinancing:
Copy of your current homeowners insurance policy
showing dwelling coverage, annual premium and renewal date.
Property tax statement
Exact mortgage balance and escrow balance for
current mortgage(s).
Owner's title insurance policy
If refinancing a land contract: a copy of
the land contract and address of land contract holder.
he most recent months pay
Bank statements for the previous three months.
Also include institution name, address, account number(s) and
balances for all accounts.
Account number(s),
balance(s) and monthly
payment(s) for all outstanding creditors: i.e., credit
cards, car loans, student loans, signature loans, etc.
Previous addresses for the past two years.
Make and year of each automobile owned or leased,
and current market value if owned.
2. Mortgage Refinancing Tips to save thousands of
dollars over the life of your loan
Know Your Fico Score In the United States, a credit score is a number, based on a statistical analysis of a person's credit files, to represent the creditworthiness of a person, the likelihood that the person will pay their bills. A credit score is primarily based on credit report information, typically from the three major credit reporting agencies.
35% punctuality of payment in the past
(only includes payments later than 30 days past due)
30% the amount of debt, expressed as the
ratio of current revolving debt (credit card balances, etc.) to total
available revolving credit (credit limits)
15% length of credit history
10% types of credit used
10% recent search for credit and/or
amount of credit obtained recently
A FICO score generally ranges from
300 to 850.
A new Vantage score has been offered by all three credit bureaus to
creditors since spring 2006, 2007.
Its range is from 501 to 990 Get your credit report.
Note the credit worthy chart to match rates according to your Fico
Score
FICO Score
Vantage Score
Excellent
850 - 800
A
(901-990)
Good
799 - 700
Fair
699 - 600
B
(801-900)
Poor
Below 600
C
(701-800)
Bad
500 -300
D
(601-700)
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate loss to bad debt. Lenders use credit scores to determine who qualifies for a loan, for what interest rate, and what credit limits. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.
About Mortgage Rates
Rates change daily so don't expect
to keep the rate you agreed upon unless you request a "rate
lock-in".
Look for a lock-in that lasts for 60 days or more. There should be some
lenders in your area willing to offer a 60 day "lock-in" for
free. Be careful, however. The loan officer may say the lock-in is free
even when a fee or a higher rate is charged for the lock-in protection.
Tax Tips*
It is important to understand the tax rules of a refinance, or hire
someone who does. There is tax deductible interest on a mortgage, but it
won't count if you don't itemize. Or, if you refinance twice, there are
potential tax write-offs for the points that haven't been deducted from
the life of the loan that can be written off in a lump sum. There can be
lots of tax benefits for you, but you need to be certain you are complying
with current federal and state tax laws.
* The above
information is a general discussion of tax rules and not intended as a
substitute for the professional advice of attorneys, tax preparers, or
others. Your tax treatment depends on your particular circumstances,
therefore, you should consult a tax advisor or Internal Revenue Service
materials to determine how the rules apply to you.
Rate Quote Tips
It is your responsibility to ask about the conditions of the loan offered
and the rate quoted. Talk
about the kind of loan you need, i.e. cash-out, low-cost refinance, lock
period, etc. Did you know that a loan with a lock period of 15 days is
much lower than 60 days? But how many of us are prepared to go to closing
in two weeks? So be careful, and be specific.
3. How to Refinance
Guide
How to shop low rates
online
How to choose a lending
marketplace
How to interview lenders
and brokers
How to shop low rates online
A good source of interest rates quotes are individual loan officer recommended by your
sales agent.
If it is a purchase transaction. Low rate lenders recommended by other borrowers.
Request that quotes include fixed-dollar fees, and that they be sent by
e-mail or fax.
You might tell them you are soliciting three or four loan
providers.
You want to make certain that their quote is complete timely and
honest. How you determine this is simply by asking what sources they
used to determine the figure.
A second source of price quotes is Internet mortgage auction sites.
These sites provide a questionnaire including the desired loan amount,
property information, personal finances and contact information. The
information serves as a profile that is matched to select lenders when
criteria is met, usually up to four, to whom the
information is sent. The selected lenders then send mortgage rate and price quotes to you
via email or a password protected interface.
When shopping rates online make sure you compare interest rates using a
constant number of points. For example: A mortgage rate at 8 percent tied
to 2 points is more expensive than an 8 percent rate tied to 0 points.
When comparing rate and point combinations among lenders convert each
quoted rate to one based on a constant number of points and then find the
lender with the lowest rate. For example an 8 percent loan with
0 points is the equivalent to a 7.75 percent loan with 1 point.
Remember to take responsibility to ask
about all conditions pertaining to a rate ...be specific.
Note today's current rates and associated points using the live National
Average Mortgage Rate Index:
Establish monthly payments you can afford according to your budget needs using the calculator below. Note savings when adjusting interest rate.
Use the Mortgage Interest Savings Calculator to compare rates.
Lending Marketplace VS Your current Lender
Although it may seem more convenient to do business with your current
lender think twice. The current lender may not feel compelled to
give you the market price. They may actually try to minimize loss by
taking advantage of your preference to stay put and your reluctance to
shop around. They simply have not been put in a competitive position and
may not budge on fates points and fees.
How to choose a lending marketplace
A lending marketplace is an ideal arena for finding bargain loan fees
and low rates. The reason is that at lending marketplaces lenders compete
for your business. This gives you the consumer the bargaining advantage.
The key is to get lenders to beat your meet the best deal you've been
offered. How do you choose a good lending marketplace?
Criteria for choosing a good lending marketplace online:
The more complete the questionnaire, the more effectively the site can
select lenders, and the more accurately the lenders can quote prices.
Choose a site that gives borrowers with challenging features, such as poor
credit, incomplete documentation, or little cash a way to avoid
wasting time soliciting lenders who won’t deal with them.
Choose a lending marketplace that offers at least 4 mortgage rate quotes
from different lenders.
Choose a site that bounces a lender who attracts multiple complaints from
borrowers.
Choose a site that offers a way of assessing the quality of a lenders
services.
How to interview lenders and brokers
1.
To interview lenders ask these important questions? 2. How long has your company been in business? 3. Where are you located? 4. Are you a member of the Better Business Bureau? 5. Are you a member of the Mortgage Broker Association? 6. Are you an Equal Housing Lenders? 7. Do you provide flexible fee programs? 8. Do you provide incentives? 9. Do you consider yourself a consumer oriented service? 10. Will you follow up with all my call and questions? 11. Will you answer all my questions in a timely manner? 12. Do you have a list of references of satisfied borrowers
I can contact?
4. Bargain Loan shopping
tips to live by
The greatest potential for lower settlement costs arises
where the current lender was the originating lender
Refinancing means taking out a new mortgage with a lower interest rate
to pay off your existing mortgage.
With the advent of low and no-cost refinancing, it's no
longer as important to see if you're going to stay in the house long
enough to pay back the refinancing costs.
In a traditional refinance, insist on a good-faith
estimate of the costs up front, before you give the lender a penny.
Before you refinance, check your credit report for
anything that could foul up a refinance. You don't want to lay out the
money if a credit problem is going to keep you from refinancing. LendingTree Mortgage Refinance Loan
5. Know Your Rights
KNOW YOUR RESCISSION RIGHTS
If you don't like the fees and rates printed on closing papers, consider
starting over. You have three business days from the date of closing. If
you decide to reject the deal, you must notify the lender in writing
within the three-day period. The lender then has 20 days to return your
fees.
Although loans tend to close in a timely manner you still want to do all
you can to help it along. When asked to provide information by the
lender give that information as accurately and as quickly as possible. Document
everything that has happened to show that you have completed all of your
tasks in a timely matter. By doing this you show that you cannot be held
responsible for slow loan processing and are entitled to the mortgage
rate you agreed to. If you are worried that your lock-in is going
to expire start a paper trail and show the lender who really
was at fault.
6. Lender Secrets - 15 important facts they don't want you to
know
1. You have a right of rescission.
2. Rates change daily and can drastically alter the cost of a loan.
3. You have an option to lock-in rates up to 60 days.
4. Fees vary from lender to lender so shop around
5. You can Interview your lender before they interview you
6. Lenders should have a list of references or current satisfied customers
at your request
7. You are not obligated to a loan just because you filled out an
application
8. You should screen all initial contacts by lenders and brokers using the
Better Business Bureau and Mortgage Broker Associations
9. You protect your credit score by accepting a loan shortly after
application.
10. Don't accept the first offer you get.
11. You can negotiate fees
12. No money down loans are not necessarily money saving deal.
13. No cost applications are not what they may appear to be. Expect
fees at closing.
14. Regardless of fees waived keep your eyes on the interest rate and
points.
15. When doing a “cash out refi,” don’t
raise the level or debt you have unless you’re doing home improvements.
If you do, you are at a higher financial risk and credit card companies
may increase your rates.
Mortgage Glossary
Annual interest rate:
Annual interest rate. Maximum interest rate is 20%.
Mortgage length (years):
Total length, or term, of your original mortgage in years. Most
common lengths are 30 years and 15 years.
Original mortgage amount:
The original amount financed with your mortgage, not to be
confused with the remaining balance or principal balance.
Additional monthly payment:
Your proposed extra payment per month. This payment will be used
to reduce your principal balance.
Scheduled payment:
Monthly principal and interest payment based on your original
mortgage amount, term and interest rate.
Accelerated payment:
Scheduled payment plus additional monthly payment.
Total savings:
Total amount you would save in interest if you made the
accelerated payment until your mortgage was paid in full.
7. Mortgage payoff calculator:
Find out how much interest you can save by increasing your mortgage
payment.
Use this worksheet to prepare to answer typical questions that appear on
the loan rate quote form.
This form does not save. Highlight and print when completed
New Home
Current Home
Purchase
RefinanceHome Equity
1.
What type of home do you own?
2.
When did you purchase this home?
3.
Please estimate your home's current value:
4.
The loan balance on your 1st mortgage is:
5.
How much additional cash do you wish to borrow?
6.
What is your current monthly payment?
7.
What is your current interest rate?
8.
Your current mortgage term is:
9.
Do you have a second mortgage?
Yes
No
9a.
If you have a 2nd mortgage, what is the current balance?
9b.
If you have a 2nd mortgage, how much is the monthly payment?
10.
What is your household's Gross Annual income?
11.
Please estimate your credit history:
12.
Have you had a foreclosure or filed bankruptcy in the last 7 yrs?
13.
Are you self employed?
Yes
No
Many forms now ask for physical identity and health
related information.
Be prepared
to answer the following.
Date of Birth:
(mm/dd/yyyy)
Gender:
Male
Female
Height/Weight:
/
lbs.
Smoking History:
Type of
Insurance Coverage:
Amount of
Insurance Coverage:
Insurance
Coverage Will Be:
Some forms ask about
serious health issues. Answers to these questions do not necessarily
disqualify the applicant from getting a loan, especially
where the second party has no serious longevity or health
issues
AIDS
Cancer
Diabetes
Heart Attack
Stroke
Other
serious health issues
9.
Mortgage Rate Search Tools
We surveyed the top Lending Marketplaces online and bring you our five start
winners for mortgage rate search tools.
Criteria:
Better Business Bureau
member
Equal Housing
Opportunity Lenders
These marketplaces have
successfully processed tens of thousands of mortgage requests using
state of the art secure identity protection protocols.
Fimark's Financial Planner
Home Refinancing Toolkit http://www.refinanceloanrates.fimark.net
The Financial Marketing Network, Inc.
Have questions? Contact us at support@fimark.net
