Your Houston Refinance Resource

Houston Refinance Resource was created to give you valuable insight and to assist you whether you are thinking about the purchase of  your first house, or if you are already a home-owner and are simply looking for someone to explain refinancing a mortgage to you. We really hope you will find the information here helpful in your endeavors.

Considering that right now the national mortgage rate average is hovering in the 5% range, you need to ask yourself not only when you’re going to refinance, but how to get the best deal.

People everywhere are asking the same question; how to get in on these incredibly low mortgage interest rates and who offers the best deal on a mortgage these days. The thing is, most people aren’t even able to get through to their existing lender when they try to call. Understandably, people are getting frustrated.

Believe it or not, it could take as long as 3 months for the mortgage market to be back to working normally, according to what one expert at Fannie Mae believes. His full year outlook for mortgage rates is 4.8 to 5%. The main message here is to not panic. It will take some time to get a mortgage done, but that shouldn’t be a problem.

Some things to remember

1. Realize this is a great opportunity

Bottom line – this is a fantastic opportunity. A 30 year fixed mortgage rate is currently at, or below 5%.The ‘normal’ rate, in historical terms, is in the neighborhood of 8%.. And that is significant.

Let us have a closer look at it. First, without going into too much detail to calculate mortgage payments formula, let’s take a 30 year fixed mtg at 4.6%. If you took out a 30-year fixed loan of $170, 300 (this is about average for a home loan across the US) if your interest rate was 5%, you would be paying roughly $915.And at 8% you would pay $1,250. What’s the difference? Three hundred thirty five dollars per month; that’s about $4000 a year.

2. Be wary

Be prepared for the fact that it’s going to take longer to get through the refinance process these days. That’s just something you’re going to need to accept.Something else to be prepared for is the fact that Fannie Mae and Freddi Mac have apparently raised their fees.

So don’t be surprised to find that you’re paying one to two percent more of the loan amount in the way of fees, possibly even more than that in addition to all the closing costs normally accounted for.

3. Locate the most competetive rate

Having enough equity is one of the biggest obstacles. Today you’ll need 20% or more in equity to qualify for the best rates.

You’ll also want to be sure your credit score is as clean and high as it possibly can be. Get copies of your credit report to make sure there are no errors at annualcreditreport.com.

Talk to several mortgage lending companies to be sure you feel comfortable with who you’ll be working with as well as getting the most competitive rate possible. Put all your paper work in order beforehand. The following is a basic list of the documents you’ll need:

Your refinance application, tax returns for the past 2 years, 1 month’s worth of paystubs, 3 months of bank statements (checking, savings, mutual funds), your most recent mortgage statement and finally, a copy of your deed.

Doing these things to be ready for your Houston refinance or purchase loan should put you in great shape to get what you want out of your new mortgage.

If you are struggling to pay your Houston home mortgage loan, then now is the time to take action. You have several great options available to you today, with local Houston refinance rates still below 5%. In addition, if you are truly having problems paying your mortgage, then waiting will only exacerbate your financial problems. As such, it’s best to move forward now and get the quality advice you need to help you to keep your home. But be wary of whom you get that advice from, as this article about Caliber Funding explains.  Below we will discuss a few of the options you have in order to accomplish this goal.

Refinance Options – The Making Home Affordable Program

This program was instituted by the Obama administration last year with the goal to help Americans who are having difficult times making their mortgage payments due to financial hardships. Basically, the goal of the program is to help homeowners to either refinance or modify their existing mortgage to an amount less than 31% of their pre-tax income levels. Requirements to qualify for the program include the following:

• You must be living your home, and the home must be your primary residence
• The current payment (mortgage, insurance, taxes) need to be more than 31% of your PRE-tax income.
• You had to have purchased your home before January 1, 2009
• Are currently having a hard time paying your mortgage due to a financial hardship

There are obvious benefits to this program. First and foremost, if you qualify then you can get the help you need to lower your monthly payments via refinancing your home with a lower interest rate or by extending the term of the loan. Second, it is free. The lender and the loan servicer will pick up the tab.

Refinance Options if You Don’t Qualify for the Program

If you don’t qualify for the Government’s program then you still have a few different options. Sit down with your banker/lender ASAP. The sooner you sit down and get their advice the better, as you will have more options now versus if you put it off until foreclosure is pending. These options include:

• Traditional refinance. Just because you don’t qualify for government assistance doesn’t mean you can’t refinance your home in Houston. Of course, this can be difficult to do if you are under water on your mortgage (i.e. you owe more than the home is worth), but fortunately housing prices have not come down nearly as much in Texas as they have around the rest of the country.
• Repayment Plans. These are plans that allow you to make up your delinquent payments in small amounts over a specified time period.
• Forgiveness. This option entails the lender forgiving part of the loan. For example, if your home is worth $150,000 and you owe $165,000 the bank may be willing to modify your mortgage down to the current market price, or something closer to it in order for you to stay in your home and not go into foreclosure, which is expensive for the bank. Their can be a potential issue with this if you have a Houston home equity loan, as many times that loan would have to be written off completely in order to adjust your primary mortgage down.
• Forbearance. With forbearance, you will still owe the full amount of the loan but will be able to pay part of it back later. However, this may change your payment structure and leave you with a balloon payment due at the end of the mortgage.

Things NOT To Do If You Are Having Trouble Making Your Payments

The first thing not to do is panic. Remember two things: First, banks don’t want you to foreclose on your home just as much as you don’t want to….and this is a huge advantage that you, as the borrower, have in this situation. Second, the situation in Houston, Texas is not as bad as the rest of the country. According to the most recent Case-Shiller Home Price Index, home prices in the Texas area (we had to use Dallas data, which is fairly comparable to the Houston market), home prices are down only 5.90% from their peak:

The second thing is to not settle for a short-term fix. Many lenders will offer an immediate cash loan to help you ‘get by’ for a couple of weeks. However, even if the loan is a small $1000 loan, it’s probably not a good financial decision, will only prolong the issue at hand, and cost you quite a bit in the interim. It really is best to solve the problem now given the government programs available and the current low interest rates on Houston mortgage refinancing.