Mortgage Refinancing is practical option if done at the correct time. It can help you clear your other debts as well. The money saved through refinancing can be used for expenditures like house renovation or higher education. Below are Top 20 most asked question on Mortgage Refinancing.
- Can I refinance with bad credit report or should I file bankruptcy?
Refinancing will only result in high cost borrowing, considering the risk factor involved in financing a bad credit holder, which eventually one will not be in a position to repay, hence it is a good idea to file bankruptcy under chapter 13 where a repayment plan will be developed requiring monthly installments to be paid. This will in turn help you improve your credit score, as against no payment under refinancing.
- Will I have to pay a PMI?
Fannie Mae requires borrowers to pay a PMI for conforming loans where the loan to value exceeds 80
- Can I refinance where there is a lien on the property?
It depends, the normal procedure is that you clear the lien and then go for refinancing, but again you can also file a petition to eliminate any kind of title related issues.
- Is refinancing essential for consolidating credit card debt?
It is purely optional and depends on your ability to payoff the loan liability. It is not a good advice to risk your house property, for in case of failure, your house is lost.
- Is refinancing allowed when I am in bankruptcy?
Yes, it is allowed with courts approval. You are required to submit the bankruptcy papers to the lender, fulfilling the requirement of atleast 2 years repayment under chapter 13, together with the amount of equity built during the plan is taken under consideration.
- What is meant by the term “Seasoning”?
Seasoning is a norm where the lenders insist that you to make payments on a current mortgage for a period of 12 months before permitting refinance.
- Am I allowed to refinance if my property value is less than what I purchased?
You are certainly allowed to refinance even if the value of your property is lower than the purchase cost, but ensure it is not less than what you owe. With an excellent credit report and income you certainly qualify.
- I have refinanced the first loan, is it required that I should subordinate the second one?
Subordinating the second loan is essential, otherwise it will be treated as the first lien on your property and refinance loan will become the secondary lien.
- Is refinancing option allowed after bankruptcy?
A refinance option is allowed even after bankruptcy. But yes, you are required to apply for it 2 years later to a chapter 13 bankruptcy and 4 years later to a chapter 7 bankruptcies. Any early application may not fetch optimal rates.
- Will I be permitted to refinance if I quitclaim home?
It is obvious that you will not be permitted for a refinance loan, as the property is no more yours. The new owner will be allowed to refinance the loan.
- Is the extra cash from refinancing taxed?
It is the cash out of home equity and you are the borrower, so you will be taxed for the amount of cash on refinancing.
- Is it possible to force ex-spouse to refinance after divorce?
Yes it is possible provided he/ she submits required documents such as income documentation and divorce decree etc.
- Which one to choose refinancing or reverse mortgage?
Well, the choice is yours. It is the cost factors which makes the choice visible between these two. Reverse Loans come with greater closing costs when compared to reverse mortgage.
- There is a delay in getting appraisal report prior to refinance, what can be done?
It is your right to ask the lender for an appraisal report. A complaint can be lodged with the State Department of Banking and Finance when there is no response.
- Is it possible to combine 80-20 loan with FHA loan?
Yes, it is very much possible to apply for a combined refinance FHA Mortgage Loan. Those lenders who are qualified by FHA offer loans upto 98% of the property value.
- Is a reverse mortgage refinanced for clearing a bill?
It is actually possible to refinance the reverse mortgage loan with any other loan provided the property value has increased; otherwise the processing costs incurred for raising a loan will eat up the benefits of refinancing.
- Suggest me a refinance option, where I have late payments on Adjusted Rate Mortgage?
FHA secure loan program is the best option; provided you do not have any late payments and you satisfy any other additional details required.
- Is it possible to refinance 80% first mortgage leaving out the 20% second?
Yes it is, provided you get the subordination agreement for the remaining 20% second loan.
- Can a lender foreclose the loan even after signing a refinance agreement?
Where your payments are late for close to 120 days, the lender has the option to foreclose the agreement inspite of the refinance option. Kindly opt for an expert guidance on how to appeal.
- Which is the best refinance option interest-only or a reverse mortgage?
You can opt for a reverse mortgage provided you look for cash flow in following 10 to 20 years. In any other case go for a fixed rate loan, interest only loans are never a good option.
Tags: Bankruptcy , Fannie Mae , FHA Mortgage Loan , Mortgage Lender , Mortgage Refinance , Refinance , Repayment , Reverse Mortgage 
Mortgage Rate , Mortgage Refinance 
Top 20 FAQs on Mortgage Refinancing | Bad Credit Blog…
You can refinance after bankruptcy. You are required to submit bankruptcy papers to the lender, fulfilling requirement of 2 years repayment along with equity built during the plan….
I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.
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[...] Top 20 FAQs on Mortgage Refinancing | Bad Credit Blog [...]
[...] Original post: Top 20 FAQs on Mortgage Refinancing | Bad Credit Blog [...]
Right now, my husband and I have 10% in the value of our new home (we put 10% down). Therefore, we had to borrow 90%. We have to pay a monthy mortgage insurance payment until we get the loan down to 80%. Is there any way that we can refinance and so something like get a mortgage loan for 80% of our current mortgage and a home equity line of credit for the remaining 10%. It would be so amazingly helpful if we could get rid of this monthly mortgage insurance payment!! Are there any ways that this could be done?
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[...] Top 20 FAQs on Mortgage Refinancing | Bad Credit Blog [...]
@ Brunetti, mortgage insurance payment are a sure nuisance, I agree with you completely. I would suggest you to look out for refinancing your mortgage. Start finding a good lender, although it is a tedious job as there are thousands of predatory lenders in the market who are interested in taking advantage of people suffering with bad credit by charging a high rate of interest and transaction fee.
Click to check: http://www.badcreditwhiz.com/forbeslist.html, http://www.badcreditwhiz.com/refinancingwithbad.html. I hope that should help you. Feel free to write if you need any further assistance.
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@ Tony Orlando thanks for appreciating the blog, I hope to come up to your expectations
. Anyway do write what more you want to see in Bad Credit Blog, its a newbie & your comments are more than just welcome.
Good Day!
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There is obviously a lot to know about this. I think you made some good points in Features also.
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Hey You might also be interested in this article about the TAX Credit and FHA Loans.
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I understand that FICO 08 will weigh the account balances more heavily than the previous FICO versions. It use to be a 30% weight but now it is more.
There are many factors that can lead you in a bad credit situation. However, in general, it can be said that people who accumulate a huge credit debts and unable to pay those debts will earn bad credit ratings.
A very well written article. Thanks for the good tips!
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You made some good points there. I searched this topic and found out that most people will agree with your blog.
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Very nice. Thanks for this.
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Such a useful blog
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I feel for those struggling to pay their mortgages, it’s sad
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Its nice info. Nice design.
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This is true
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