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The Basics of Home Mortgage Refinance Loan
Author David Schneider | Aug 29,2007
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Home mortgage refinance loans come in dozens of varieties. The loan that you select to refinance your mortgage with needs to provide you with the features you want and the payment size and options that you need. The best way to make a smart refinance mortgage loan decision is to research your options.
Interest Only Refinance Options
One of the latest financing trends for refinancing products is the interest only refinance option. This option allows you to pay only the interest for the first five to 10 years of your loan. Refinance mortgages that offer this option are generally more attractive to people who want to lower their monthly payments, who want to cash out their equity or who want to consolidate their debt.
No Doc Loans
Another popular trend in mortgage refinance loans is the no doc loan. No doc loans are popular because they don't require you to provide any documentation on your assets or liabilities. This type of loan works great for people who are self-employed, who have difficulties documenting their income or who have a spotty work history. There are a couple of drawbacks associated with this type of loan, however. For example, you will be charged higher interest rates and you will need a credit score of at least 700 to qualify.
Low Doc Loans
Low doc loans are one step up from a no doc loan. They only require that you document some of your assets and liabilities. Usually all you will need to submit are financial reports, letters of reference from your CPA and other simple to complete forms. To qualify for this type of loan you will need good to excellent credit. However, bad credit low doc programs do exist.
Mortgage Refinance Loans That Combine Your First and Second Mortgage
If you have a first and a second mortgage, then you may want to look for a mortgage refinance loan program that will allow you to combine both of these mortgages into a single loan product. These loan products come with a variety of options including interest only payment options, low doc application options and fixed rate or ARM options. This type of loan is great for people who want to reduce the interest they are paying on their second mortgage or for people who don't want to hassle with two mortgage payments each month.
Special Mortgage Refinance Loan Programs for Low-Income Families
If you are classified as a low-income borrower, then you may qualify for special mortgage refinance loan programs that will allow you to refinance 100 percent of your home's value. This is a great way to cash out your equity without having to pay a higher interest rate for a second mortgage or a debt consolidation loan. These loans come with low doc options and interest only payment options. |
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