January 22nd, 2016 7:47 AM by Jackie A. Graves, President
Though it may come as a surprise, there is no limitation to how
frequently you can refinance your home. You
can refinance as often and freely as you like so long as it financially makes
sense to do so. Here are some things to consider before you move to refinance
throwing good money after bad? If you recently paid fees on your last mortgage,
you may lose out by refinancing again just a short time later. A big payment
reduction or a lender credit refi-scenario, however, can help make things
early payoff fee is not to be confused with a prepayment penalty. A prepayment
penalty prohibits you from prepaying any of your principal without incurring a
penalty before the specified timeframe is up. An early payoff fee is paid to
the originating mortgage company on a loan that only lasts on the books for
just a few short months. An early payoff fee can generally be charged if the
loan is only up to 6 months old, but can be imposed in timeframes as short
as three months. You may be able to work with the original lender,
however, to avoid being charged as they can typically absorb any early payoff
Mortgage pro tip: Mortgage companies know financial
circumstances change as does a homeowner’s need to borrow money. If your
financial circumstances have changed, it is your right as a homeowner to
refinance your house.
accounts are set up by your lenders to pay off expenses like property taxes and
For instance, if you are refinancing your home from Feb. 1 through April 10 or
from Oct. 1 through Dec. 10, first installment property taxes will be included
on your loan estimate at the closing table. Let’s say, for example, you bought
your home in June. That same year interest rates dropped and you decide to
refinance your house just few months later. Your closing is slated for Nov. 1.
As a result, your escrow company is going to collect first installment property
taxes even though they are not due until Dec. 10. Title/escrow
companies are required to collect for the first installment and second installment
of property taxes when refinancing in those calendar months. The previous loan
transaction you may have completed earlier in the year may not have collected
for a tax installment as it may not have been due at the time.
your last mortgage transaction before Oct. 1, 2015? If it was, plan for a
different mortgage loan closing process. The Consumer Financial Protection
Bureau’s most recent change to the closing process now requires a borrower to
be more involved.
The closing process, for instance, now requires borrowers to e-consent to various consumer and financial
disclosures. Additionally, a closing disclosure is now sent by the lender three
days before your final settlement, which also must be acknowledged and executed
online. While these changes are meant to make it easier for a borrower, some
consumers might find the process of consenting to online disclosures a little
irksome. However, it’s the new way mortgage loans are originated.
are some other factors to evaluate.
decision to refinance depends on your circumstances—and your ability to make a
sound choice when evaluating them. Furthermore, it can help to stay in regular
communication with your preferred lender. Checking in every six months can be
worth the effort, as interest rates are always in flux and underwriting is
slowly beginning to loosen.
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