How Soon Can a Mortgage Be Refinanced?

There are many advantages to having your mortgage refinanced. Of course, the most important and obvious reason is the lower rate you’ll enjoy. When applied at the right time and opportunity, having a mortgage refinanced can save you thousands of dollars in the long run. However, since timing plays a crucial role in refinancing, it’s important that you understand the factors that can affect how successfully you can take advantage of it. So how soon can a mortgage be refinanced and should you?

The right time
Getting a mortgage is not for sissies. This type of loan, whether you’re taking it out to purchase a car or a house, is easily one of the biggest financial decisions you’ll ever make in your life.

If you’re taking out a home mortgage loan and are considering getting it refinanced later, you’ll be glad to know that you could probably do it at any time you want. But once you have a mortgage and interest rates begin behaving in a manner that is favorable to you, you shouldn’t automatically apply for refinancing.

First, the difference in the new interest rate and the current interest rate should be enough to actually give you some advantages. Second, most lenders will probably advise you to refinance only after your loan has matured for a minimum of 12 months or so.

However, it’s good to consider this only if interest rates have remained more or less the same. If, at any time after you have taken out a mortgage loan the market trend begins tipping to your advantage, you should consider refinancing your loan. Remember that interest rates are rather volatile and if you wait too long for them to dip further, you could miss out on a very good opportunity to get a good deal.

Consider the 2 percent rule.
Just because interest rates have fallen a tiny bit does not automatically justify your decision to refinance. Consider refinancing only if the new interest rate is at least 2% lower compared to the rate you’re currently paying. A 1% difference in interest is not sufficient reason to make the switch.

Remember that there are costs associated with a new loan. When you consider refinancing for your mortgage, remember that you will have to pay extra for closing fees. An interest rate as low as 1% will not cover the expense.

You have no late payments.
You could go ahead and refinance a mortgage provided you have paid your loan faithfully for the last 12 months. If you have never had a late payment during the last year, you could make the shift and have your mortgage refinanced.

You have already built up equity.
If you want to refinance a mortgage soon, try to examine if you have already built up equity. You should have a minimum of about 5% or 10% equity (depending on the lender) before you could consider refinancing as a feasible option.

So is refinancing an option for you?
Of course, you can always consider refinancing your mortgage at any time you feel most comfortable. The key is to consider the time factor, along with the type of opportunity being presented by the market. After all, refinancing is really getting a new loan. Just be prepared for the procedures and costs that you will have to go through all over again.

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In today’s tight mortgage market there is no many loan products were you can buy a home with no down payment. The good old days were anyone with a pulse could get a mortgage with no money down. But there is still one great program left that has 100% financing and that program is for rural home loans by United State Agriculture Department.

Although this type of home mortgage loan has been around for years but most people are aware of it. Mainly because it was though to be for farmers only, it was known as a “farmer loan”. The USDA home loan program guidelines permits people to purchase a home with 100% financing at competitive interest rates, 30-year fixed rate mortgage, and mortgage insurance (MI). Does this sound too good to you to be true?

Yes, this great program does exist but it is not for everyone. There are some restrictions and guidelines both on household income and property eligibility. You household income can not exceed certain income limitations and the property has to be located in certain areas (mostly rural areas). These rural home loans are guaranteed by USDA and are not available in high population areas like big cites and towns. If you like in New York City then you are out of luck. But if you live in a city or town with population of less than 25,000 people then you may be able to find a home that is in an eligible area.

There are not a lot of “no down payment” programs that are left today.  The FHA Home Loan Program requires 3.5% down payment.  There is also a HUD Home $100 Down Payment Incentive Program that only has a $100 down payment, but you have to buy a HUD home foreclosed property in order to take advantgage of the HUD Home $100 Down Payment Program.

There are a lot of benefits to the USDA Rural Home Loans program besides the no money down feature. One is the closing costs can be rolled into the loan or you can ask the seller to may all of the closing costs including prepaid items such as property taxes and homeowner’s insurance. This means it is truly no money out of your pocket type of mortgage loan.

In comparison with a conventional mortgage if you do not pay at least 20% down then you will have to pay mortgage insurance thus increasing your monthly mortgage payment. The rural home loans of USDA do not have this private mortgage insurance requirement. This is one of the best financing methods available if you are eligible.

The USDA Home Loans Program is even better than FHA mortgage loans. FHA home loan requires a 3.5% down payment and they have an upfront private mortgage insurance cost plus a monthly mortgage insurance (MI) charge. If you want to buy a home in an area that is eligible for this program and you are also within the income guidelines, this would at least made sense to check into this program.

So what do you do now? This article only provides a brief description of the USDA Rural Home Loans Program. You need to get more information to see if you qualified and if you live or the area you want to buy a home is in a property eligible area. This is a great way and may also be the only way you can buy your dream home!

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About the Author:
You can get more information by clicking Rural Home Loans and you can find out if you meet income guidelines and if you live in an eligible area by clicking USDA Home Loans!
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The total amount of money borrowed in new mortgages dropped back in April.

The Council of Mortgage Lenders (CML) revealed that £10.2bn was lent to both home buyers and other borrowers, 12% less than in the previous month, marking the lowest figure recorded in any April in the last decade.

Figures from HM Revenue & Customs also highlighted the subdued nature of the property market, showing a slight fall in completed sales in April, down 2,000 from March to 71,000.

In the first four months of 2010, Home sales in the UK were up 26% compared with the same period last year, although this is still almost half the level recorded before the banking crisis years between 2005 and 2007.

The CML pointed out that Easter falling in April this year had led to a seasonal dip in lending, but did recognise that borrowing in the mortgage market was still slow compared with previous years.

Gross mortgage lending was 6% lower in the first four months of the year compared with the same four months last year.

“There have been signs of increased mortgage availability in recent months, with higher loan-to-value mortgages becoming available and rates falling slightly,” said the CML.

“But it remains a difficult market, particularly for first-time buyers without large deposits, and lenders continue to face funding challenges.”

Brian Murphy, of the Mortgage Advice Bureau mortgage brokers, highlighted the fact that the recent general election also caused the property market to remain sluggish for the past month.

“In April, many potential buyers held off to see what colour the new government would be and what potential impact there may be on housing and interest rate policy,” he said.

The Bank of England also underlined the subdued outlook for mortgage lenders in the latest edition of its monthly Trends In Lending publication, commenting that it was unclear whether lending would show any signs of recovery this year.

“Most major UK lenders continued to expect the stock of lending to pick up moderately in the remainder of the year, though some lenders noted the downside risks to their projections,” it said.

“Data from the major UK lenders indicate that their approvals for house purchase edged lower in April,” it added.

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UK Price Comparison website http://www.which4u.co.uk Compares Credit Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals
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