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  Home Mortgage Refinancing Kit 2.0
  Putting all your ducks in a row in order to acquire the best loan deal at the lowest rates possible.



Table Of Contents:

1.  
Mortgage Refinancing Preparation Checklist
2.   Mortgage Refinancing Tips to save thousands of dollars over the life of your loan
3.   How to Refinance Guide... Includes:
         Know your Fico Score
         How to shop low rates online
         How to choose a lending marketplace
         How to interview lenders and brokers
4.   Bargain Loan shopping tips to live by
5.   Know Your Rights
6.   Lender Secrets - 30 important facts they don't want you to know
7.   Access to mortgage payment reduction calculators
8.   Live mortgage rate index
9.   Mortgage rate search tools
10. Free mortgage rate watch alert newsletter

Plus Free Bonus Tips Tools and Resources!


 

 




1.   Mortgage Refinancing Preparation Checklist

Documents Needed:

  • Social security number(s)
  • Name and address of all employers from the last two years with dates of employment
  • W-2 forms for the last two years
  • Paycheck stubs covering the most recent months pay
  • Bank statements for the previous two months.   Also include institution name, address, account number(s) and balances for all accounts.
  • Account number(s), balance(s) and monthly payment(s) for all outstanding creditors:  i.e., credit cards, car loans, student loans, signature loans, etc.
  • Previous addresses for the past two years.
  • Make and year of each automobile owned or leased, and current market value if owned.


After gathering the needed documents fill out the form below. Note: This form is not functional and therefore does not submit private information over the Internet. After completing the form highlight and print when completed. 

                        Borrower Name    Cosigner Name 
Social security number(s)      Borrower    Cosigner  
Name and address of all employers from the last two years with dates of employment



W-2 forms for the last two years  Borrower
 Cosigner
Weekly, monthly, annual salary
Paycheck stubs covering the most recent months pay
Borrower  Cosigner 
Weekly  Weekly 
Monthly Monthly
Salary    Salary   
Bank statements for the previous two months.   Also include institution name, address, account number(s) and balances for all accounts. Bank
Address
Acct#   
Bank
Address
Acct#   
Account number(s), balance(s) and monthly payment(s) for all outstanding creditors:
Credit cards   Type                     Limit                     Amount Owed


Car loans - Make and year of each automobile owned or leased, and current market value if owned.


Student loans
  Type                              Borrowed                       Amount Owed




Signature loans   Type                              Borrowed                       Amount Owed




Previous addresses for the past two years. Address
City
State
Zip
Other Address  
Address
City
State
Zip
Other 
     

 


 

 



Other Information That May Be Required:
  • If you are divorced:  a copy of complete divorce decree along with any amendments.
  • If you pay alimony or child support: a "friend of the court" letter saying payment amount and showing the account is current or 12 months cancelled checks if paying directly to recipient.
  • If you are self-employed, employed in a family business, a tradesman, your income is based on commissions or you own rental property:  You need tax returns for the past three years complete with all schedules, and a signed year-to-date profit and loss statement.
  • If your present home is for sale or sold:  a copy of the listing, purchase agreement or closing statement
  • If you have been renting during the past year: a list of names and addresses of all landlords (12 months cancelled checks will expedite your loan process).
  • If you have had a mortgage or land contract within the past year:  provide the name, address and account number of lender (12 months cancelled checks will expedite your loan process).
  • If liquidating savings bonds or stocks for closing:  provide proof of ownership. 
  • For stocks:  photocopy of most recent stock ownership statement or photo copy of stock certificates.

    If You Are Refinancing:

    • Copy of your current homeowners insurance policy showing dwelling coverage, annual premium and renewal date.
    • Property tax statement
    • Exact mortgage balance and escrow balance for current mortgage(s).
    • Owner's title insurance policy
    • If refinancing a land contract:  a copy of the land contract and address of land contract holder.
    • he most recent months pay
    • Bank statements for the previous three months.   Also include institution name, address, account number(s) and balances for all accounts.
    • Account number(s), balance(s) and monthly payment(s) for all outstanding creditors:  i.e., credit cards, car loans, student loans, signature loans, etc.
    • Previous addresses for the past two years.
    • Make and year of each automobile owned or leased, and current market value if owned.

     




2.   Mortgage Refinancing Tips to save thousands of dollars over the life of your loan

Know Your Fico Score
In the United States, a credit score is a number, based on a statistical analysis of a person's credit files, to represent the creditworthiness of a person, the likelihood that the person will pay their bills. A credit score is primarily based on credit report information, typically from the three major credit reporting agencies.

  • 35% punctuality of payment in the past (only includes payments later than 30 days past due)
  • 30% the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
  • 15% length of credit history
  • 10% types of credit used 
  • 10% recent search for credit and/or amount of credit obtained recently

A FICO score generally ranges from 300 to 850.
A new Vantage score has been offered by all three credit bureaus to creditors since spring 2006, 2007 2008 2009. 
Its range is from 501 to 990
Get your credit report. Note the credit worthy chart to match rates according to your Fico Score

FICO Score Vantage Score
Excellent 850 - 800 A (901-990)
Good 799 - 700
Fair 699 -  600 B (801-900)
Poor Below 600 C (701-800) 
Bad 500 -300  D (601-700)


Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate loss to bad debt. Lenders use credit scores to determine who qualifies for a loan, for what interest rate, and what credit limits. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system. 


About Mortgage Rates

Rates change daily so don't expect to keep the rate you agreed upon unless you request a "rate lock-in". 
Look for a lock-in that lasts for 60 days or more. There should be some lenders in your area willing to offer a 60 day "lock-in" for free. Be careful, however. The loan officer may say the lock-in is free even when a fee or a higher rate is charged for the lock-in protection.

Tax Tips*
It is important to understand the tax rules of a refinance, or hire someone who does. There is tax deductible interest on a mortgage, but it won't count if you don't itemize. Or, if you refinance twice, there are potential tax write-offs for the points that haven't been deducted from the life of the loan that can be written off in a lump sum. There can be lots of tax benefits for you, but you need to be certain you are complying with current federal and state tax laws.

* The above information is a general discussion of tax rules and not intended as a substitute for the professional advice of attorneys, tax preparers, or others. Your tax treatment depends on your particular circumstances, therefore, you should consult a tax advisor or Internal Revenue Service materials to determine how the rules apply to you.

Rate Quote Tips
It is your responsibility to ask about the conditions of the loan offered and the rate quoted. Talk about the kind of loan you need, i.e. cash-out, low-cost refinance, lock period, etc. Did you know that a loan with a lock period of 15 days is much lower than 60 days? But how many of us are prepared to go to closing in two weeks? So be careful, and be specific.


 

 



3.   How to Refinance Guide
  • How to shop low rates online
  • How to choose a lending marketplace
  • How to interview lenders and brokers

  How to shop low rates online

A good source of interest rates quotes are  individual loan officer recommended by your sales agent.
If it is a purchase transaction. Low rate lenders recommended by other borrowers.  Request that quotes include fixed-dollar fees, and that they be sent by e-mail or fax.

You might tell them you are soliciting three or four loan providers. 

You want to make certain that their quote is complete timely and honest.  How you determine this is simply by asking what sources they used to determine the figure.  

A second source of price quotes is Internet mortgage auction sites. These sites provide a questionnaire including the desired loan amount, property information, personal finances and contact information. The information serves as a profile that is matched to select lenders when criteria is met, usually up to four, to whom the information is sent. The selected lenders then send mortgage rate and price quotes to you via email or a password protected interface.

When shopping rates online make sure you compare interest rates using a constant number of points. For example: A mortgage rate at 8 percent tied to 2 points is more expensive than an 8 percent rate tied to 0 points.

When comparing rate and point combinations among lenders convert each quoted rate to one based on a constant number of points and then find the lender with the lowest rate.  For example an 8 percent loan with 0  points is the equivalent to a 7.75 percent loan with 1 point.
Remember to take responsibility to ask about all conditions pertaining to a rate ...be specific. 

Note today's current rates and associated points using the live National Average Mortgage Rate Index:


Daily Mortgage Statistics
 

Establish monthly payments you can afford according to your budget needs using the calculator below. Note savings when adjusting interest rate. Use the Mortgage Interest Savings Calculator to compare rates.

Lending Marketplace VS Your current Lender
Although it may seem more convenient to do business with your current lender think twice.  The current lender may not feel compelled to give you the market price. They may actually try to  minimize loss by taking advantage of your preference to stay put and your reluctance to shop around. They simply have not been put in a competitive position and may not budge on fates points and fees.



 
How to choose a lending marketplace

A lending marketplace is an ideal arena for finding bargain loan fees and low rates. The reason is that at lending marketplaces lenders compete for your business. This gives you the consumer the bargaining advantage. The key is to get lenders to beat your meet the best deal you've been offered. How do you choose a good lending marketplace?


Criteria for choosing a good lending marketplace online:

  • The more complete the questionnaire, the more effectively the site can select lenders, and the more accurately the lenders can quote prices.
  • Choose a site that gives borrowers with challenging features, such as poor credit, incomplete documentation, or little cash  a way to avoid wasting time soliciting lenders who won’t deal with them.
  • Choose a lending marketplace that offers at least 4 mortgage rate quotes from different lenders.
  • Choose a site that bounces a lender who attracts multiple complaints from borrowers.
  • Choose a site that offers a way of assessing the quality of a lenders services.


 
How to interview lenders and brokers

  1.
To interview lenders ask these important questions?
  2.  How long has your company been in business?
  3. Where are you located?
  4. Are you a member of the Better Business Bureau?
  5. Are you a member of the Mortgage Broker Association?
  6. Are you an Equal Housing Lenders?
  7. Do you provide flexible fee programs?
  8. Do you provide incentives?
  9. Do you consider yourself a consumer oriented service?
  10. Will you follow up with all my call and questions?
  11. Will you answer all my questions in a timely manner?
  12. Do you have a list of references of satisfied borrowers I can contact?



4.   Bargain Loan shopping tips to live by

  • The greatest potential for lower settlement costs arises where the current lender was the originating lender
  • Refinancing means taking out a new mortgage with a lower interest rate to pay off your existing mortgage.
  • With the advent of low and no-cost refinancing, it's no longer as important to see if you're going to stay in the house long enough to pay back the refinancing costs.
  • In a traditional refinance, insist on a good-faith estimate of the costs up front, before you give the lender a penny.
  • Before you refinance, check your credit report for anything that could foul up a refinance. You don't want to lay out the money if a credit problem is going to keep you from refinancing.


5.   Know Your Rights

KNOW YOUR RESCISSION RIGHTS

If you don't like the fees and rates printed on closing papers, consider starting over. You have three business days from the date of closing. If you decide to reject the deal, you must notify the lender in writing within the three-day period. The lender then has 20 days to return your fees.

Although loans tend to close in a timely manner you still want to do all you can to help it along.  When asked to provide information by the lender give that information as accurately and as quickly as possible. Document everything that has happened to show that you have completed all of your tasks in a timely matter. By doing this you show that you cannot be held responsible for slow loan processing and are entitled to the mortgage rate you agreed to. If you are worried that your lock-in  is going to expire start a paper trail  and show the lender who really  was at fault.


6.   Lender Secrets - 15 important facts they don't want you to know
1. You have a right of rescission.
2. Rates change daily and can drastically alter the cost of a loan. 
3. You have an option to lock-in rates up to 60 days.
4. Fees vary from lender to lender so shop around
5. You can Interview your lender before they interview you
6. Lenders should have a list of references or current satisfied customers at your request
7. You are not obligated to a loan just because you filled out an application
8. You should screen all initial contacts by lenders and brokers using the Better Business Bureau and Mortgage Broker Associations
9. You protect your credit score by accepting a loan shortly after application. 
10. Don't accept the first offer you get.
11. You can negotiate fees
12. No money down loans are not necessarily money saving deal. 
13. No cost applications are not what they may appear to be. Expect fees at closing. 
14. Regardless of fees waived keep your eyes on the interest rate and points.
15. When doing a “cash out refi,” don’t raise the level or debt you have unless you’re doing home improvements. If you do, you are at a higher financial risk and credit card companies may increase your rates.



Mortgage Glossary

Annual interest rate: Annual interest rate. Maximum interest rate is 20%.
Mortgage length (years): Total length, or term, of your original mortgage in years. Most common lengths are 30 years and 15 years.
Original mortgage amount: The original amount financed with your mortgage, not to be confused with the remaining balance or principal balance.
Additional monthly payment: Your proposed extra payment per month. This payment will be used to reduce your principal balance.
Scheduled payment: Monthly principal and interest payment based on your original mortgage amount, term and interest rate.
Accelerated payment: Scheduled payment plus additional monthly payment.
Total savings: Total amount you would save in interest if you made the accelerated payment until your mortgage was paid in full.

 


7.   Mortgage payoff calculator: Find out how much interest you can save by increasing your mortgage payment.

Mortgage Payoff Calculator


8.   Loan Application Worksheet

Use this worksheet to prepare to answer typical questions that appear on the loan rate quote form. 
This form does not save. Highlight and print when completed

             New Home Current Home
            Purchase Refinance        Home Equity
         
1. What type of home do you own?
2. Date of purchase
  
3. Estimate your home's current value:
4. Select loan balance on your 1st mortgage.
5. Choose additional cash do you wish to borrow.
6. Select your current monthly payment.
7. Current interest rate?
8. Current mortgage term is:
9. Second mortgage?
Yes No
9a. Current balance of 2nd mortgage.           
9b. 2nd mortgage monthly payments. 
10.
Household's Gross Annual income?  
11. Estimate your credit history:
  
12. Have you had a foreclosure or filed bankruptcy in the last 7 yrs?
13. Are you self employed?  
Yes No      

Many forms now ask for physical identity and health related information. 
Be prepared to answer the following.
Date of Birth: (mm/dd/yyyy)
   
Gender:
Male Female
Height/Weight:
/  lbs.
Smoking History:
Type of Insurance Coverage:
Amount of Insurance Coverage:
Insurance Coverage Will Be:

Some forms ask about serious health issues. Answers to these questions do not necessarily disqualify the applicant from getting a loan, especially where the second party has no serious longevity or health issues

AIDS
Cancer
Diabetes
Heart Attack
Stroke
Other serious health issues

 


9. Mortgage Rate Search Tools

We surveyed the top Lending Marketplaces online and bring you our five start winners for mortgage rate search tools. 

Criteria: 

  • Better Business Bureau member
  • Equal Housing Opportunity Lenders
  • These marketplaces have successfully processed tens of thousands of mortgage requests using state of the art secure identity protection protocols.
  • Serving the community for over seven years

    see LendingTree, GetSmart and LoanWeb links below or go to http://www.refinanceloanrates.fimark.net
    http://www.bcpl.net/~ibcnet/

10. Free mortgage rate watch alert newsletter
http://www.refinanceloanrates.fimark.net


Refinance home loan rates

Fimark's Financial Planner
Home Refinancing Toolkit 
http://www.refinanceloanrates.fimark.net
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Phone: 434 683 1406

 


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