When closing your refinance there are a few basics you need to know in advance.
Your “payoff amount” is always higher than your remaining principal balance.
Your balance is the amount of remaining principal owed. Your payoff amount is the balance plus prorated interest from the last payment received until the loan is actually paid off.
The funding date is usually different from the closing date.
The government mandates a three-day rescission period for refinances of primary residences. Loan payoffs will not occur until the fourth business day post-closing. This will affect the payoff amount, the final payment date and the release of any cash.
Don't count on your existing escrow funds for closing.
If you have an escrow account for taxes and/or insurance, these funds will be held there until the current loan is paid off. Accordingly, unless funds for taxes due and/or a new escrow account are covered by the new loan, be prepared to advance this money at closing. It will typically take several weeks before your current escrow account funds are returned to you, so it pays to plan ahead.
As always, we’re here to help you with your transaction and to answer your questions. We want you to be comfortable with the process and understand it fully. Never hesitate to reach out.
After a string of record-breaking low mortgage rates last year, 2021 has ushered in a new direction for rates. Unfortunately, that direction is up.
It’s not all bad news though. Rates are rising due to expectations that trillions in new economic stimulus will spur a faster economic recovery.
The downside of recovery is inflation. And the investors that influence mortgage rates through the purchase of mortgage bonds really hate inflation. They’ll be less likely to buy the bonds, the bonds’ value will drop, and rates will rise.
Rates are moving from the lowest point ever. Even if they’re a little higher than last year, they’re still low by historical standards. If you’ve been waiting to secure a still-low rate for a home purchase or refinance, now may be the time to do so.
Want to see how your rate stacks up to national average rates and how much you may be able to save? Click here or on the image below. Remember, rates will vary based on your specific situation. You might even get a better rate than the average.
Things can change quickly, so reach out today and let’s discuss what may work for you. 908-489-4658.
Interest rates will eventually start to climb. When rates rise your affordability dwindles. This can hurt both buyers and sellers.
In fact, rising interest rates can make the difference between locking in the home of your dreams TODAY or being locked out tomorrow.
Take for instance this example here:
A $1,000 monthly principal and interest payment finances less and less as rates rise.
As you can see, the corresponding loan amount for a $1,000 principal and interest payment dwindles as rates increase.
Think we’ll see higher rates?
History is rife with many examples of cyclicality in rates. Many economists expect inflation and interest rates to rise significantly once the real impact of all the monetary stimulus (money printing) is realized.
Locking in a rate at today’s low levels and owning assets like real estate and other commodities may safeguard you from rising rates and prices in the future.
COVID hit a lot of people hard, both personally and financially. If you needed to exercise Mortgage Forbearance, here are some tips to help you get back to financial wellness.
Don’t Lose Hope! Forbearance is there for people who need to use that option. Conversely, do not use forbearance if you do not need it.
Purchasing or Refinancing a Mortgage after Forbearance is Possible. The Cares Act prevented lenders from reporting late payment histories to the credit bureaus. That said, lenders will want to see that you have been able to make your payments after the forbearance, before refinancing, or purchasing another home. Most loan programs require you to make 3 timely payments after the deferment period.
Options: How your Mortgage Forbearance is handled is dependent on your type of loan and lender. Lenders will review your present financial situation to see what options may work for you.
Modifying the loan terms through a loan modification. This may mean that a lender adds the unpaid mortgage payments to the principal owed on the mortgage or extends the term of your loan.
Adding a second mortgage to the property for the missed payments.
Requiring the borrower to make up missed payments either all at once or with an increased monthly payment over time.
When Getting Back on Your Feet, Focus on One Bill at a Time. For many people, this means securing their living arrangements, which is their home mortgage. Once that is achievable, then start working on your other responsibilities.
If You are Self-Employed, be Prepared for Additional Scrutiny! The pandemic may impact even long-established businesses, so lenders are considering fluctuations in income and the probability of continued income.
No matter your situation, Greenway Mortgage is here to answer all your questions.
It’s always been a little tougher for self-employed borrowers to obtain a home loan then it is for regular W-2 employees. And, since the COVID-19 pandemic, self-employed borrowers are now required to provide even more information to prove their income to the lender. For instance, a self-employed borrower will now need to provide a profit-and-loss statement as well as their 2 most recent months’ worth of business deposit account statements at the time of application.
Many lenders are implementing temporary eligibility requirements for self-employed borrowers based on announcements made by Fannie Mae and Freddie Mac which will remain in effect until further notice. Fannie Mae issued a lender letter in March 2020 that has since been updated several times describing new documentation requirements for self-employed loan applicants. Greenway Mortgage continues to monitor the situation to keep everyone informed and updated.
If you are self-employed and are currently looking for a mortgage, here is a checklist that you should refer to, to ensure you’ve got everything in order for a smooth mortgage process. In addition to the standard tax return requirements, the following documents must be provided:
Online Mortgage Applications
Virtual open houses are sometimes available
Unaccompanied home inspections
Physical closings have become rare if not impossible in some areas. Fear not, Greenway Mortgage has the ability to perform e-closings!