Mortgage Refinancing In Ventura County
Mortgage Refinancing is simply the process of replacing an existing home mortgage with a new mortgage. The processes and procedures of attaining a refinanced home loan are basically the same as experienced the first time around. The costs associated with refinancing includes similar closing costs such as application fees, appraisal fees, title search, title insurance, loan origination fees and other costs. The lender generally charges “percentage points” ranging from 1% to 3% or more depending upon the mortgage lender. Accumulated costs and fees can become quite high.
Therefore, unless a homeowner can refinance at an interest rate that is 2 points less than the existing home loan, refinancing is generally not a good idea. Of course it depends upon how long a homeowner plans on keeping the home and whether or not the combined expenses of closing costs and points are loaded into the new mortgage which increases principle and reduces equity. Basically you could look at it this way. If the total costs of refinancing was $7,200 and the monthly payment is lowered by $200, it would take 36 months to break even. It’s formula is more complicated, but that example gives you a basic idea.
Prudent Reasons To Refinance
If you’re in need of a cash infusion and you own your own home, a mortgage refinance may be a MUCH better idea than more expensive alternatives. Car title loans in Ventura Ca are typically a more expensive route than refinancing your home.
Assuming there is enough equity in the home to secure a replacement mortgage loan, there could be many reasons to refinance including the following:
- Take advantage of lower interest rates and lower monthly payment.
- Convert an adjustable-rate mortgage to a fixed rate.
- Borrow on equity for remodeling or a new car purchase.
- Reduce the amortization period to build equity much quicker.
- Borrow on equity to consolidate other debt. See Debt Consolidation.
Helpful Refinancing Tips
Ask your existing Ventura County mortgage lender if it would waive some of the closing costs and inquire about the possibility of just modifying the existing loan. Solicit proposals from different loan companies. Include the existing holder and let them know you are seeking multiple refinancing proposals which may motivate the existing mortgage holder to “pony-up” better terms. On the other hand, your existing loan may have a prepayment penalty condition which would increase your costs if you go with a different lender or loan broker. If you should decide that refinancing is not worth the costs and points applied, you might consider a Home Equity Loan or a Home Equity Line of Credit.