MORTGAGE refinance is intended to help you manage your mortgage payments better. In the state of New Mexico, there are some excellent opportunities to have your mortgage refinanced, but it is advisable that you arm yourself with sufficient basic knowledge about the market and of your eligibilities for mortgage refinance before you start talking to lenders or brokers.
Mortgage Banker for New Mexico
In this article, therefore, we shall look at the important basics of mortgage refinance as applies in New Mexico and we will also see how we can ourselves get estimates of what the market has on offer for people with different credit profiles.
What is mortgage refinance
In practical terms, mortgage refinance involves the taking of a new loan to completely pay back your existing mortgage loan and then continue to pay back the new, i.e., the refinance, loan. For a loan to be considered mortgage refinance, the new loan should use the same property as collateral that was used to get the original, i.e., purchase, mortgage loan.
When to take mortgage refinance ?
Mortgage refinance is taken for one of many purposes. The basic purpose however is to manage debt better. Some people use the mortgage refinance option to consolidate high-cost debts into a single lower-cost debt. Others take it simply to reduce monthly payments. Some need cash for an immediate purpose, and use the mortgage refinance option to get the cash if the market value of their property has increased since they purchased it. Some want to increase or decrease the duration of their mortgage loan account, and they do this through mortgage refinance. Some have decided not to stay in the particular house for long, and want to minimize their monthly payments on a house whose mortgage will soon e transferred to a new buyer.
Mortgage refinance again is a way to achieve this goal. Some may just want to take advantage of a decline in interest rates, for which mortgage refinance comes handy. There are many other possible reasons for one to take a mortgage refinance loan. Suffice it to say that different people have different reasons to take mortgage refinance.
When not to take mortgage refinance ?
It is not true that mortgage refinance is always advisable to every person who has a mortgaged property. This is because refinance entails a few upfront costs which make it uneconomical. This is especially true of situations where a person’s existing mortgage account is nearing the end of its term, or if there has been no substantial appreciation of the property value in the local real estate market.
Also, though mortgage refinance is usually cheaper than second mortgage, there may be some cases in which the reverse is true. If so, you should consider second mortgage as an alternative to mortgage refinance.
What to be careful about ?
Don’t be swayed by interest rates alone. Ask for the ‘APR’ or ‘annual percentage rate’ of you loan, which takes into account all the cost-heads involved in your loan, including broker’s commission, property valuation charges, processing fees, points you might have to pay to reduce your monthly payments (1 point = 1% of the refinance loan amount), penalty for unscheduled or premature termination of your existing mortgage account, and so on.
The terms and conditions of mortgage refinance are largely the same as for purchase mortgage; the types of loans too are the same in New Mexico. One difference could be in relation to points: in purchase mortgage, you can often stagger your payment of points, but in mortgage refinance you may have to pay all the points in one slump sum.
In New Mexico, all advisory services and consultation regarding mortgage and mortgage refinance loans are without obligation. You pay only the broker through whom you accept an offer. You don’t need to pay anything to any other broker irrespective of how much time he spent on your case – unless of course if you had agreed to pay him or her regardless of outcome (avoid such an agreement, though).
How to get estimates ?
In the era of the internet, one does not have to physically run about from one office to another to get quotes on mortgage refinance. These quotes can be obtained without stepping out. Simply log in to a few mortgage websites – such as www.personalhomeloanmortgages.com, www.mortgageloan.com, www.bankrate.com, and www.erate.com – amongst many others – and use the online mortgage refinance calculators available on these sites. The people behind these websites are brokers themselves or have arrangements with different brokers, whose competitive quotes they obtain for you.
For example, www.personalhomeloanmortgages.com gets you quotes from four competitive mortgage brokers, and you choose the one best for your needs. Some sites provide instant though approximate quotes, which serve as a reasonable starting point of your face-to-face negotiations with brokers or lenders. Whatever be the system followed by different mortgage websites, the fundamental benefit is that they get you quotes without obligation from either side, free of cost, and without requiring you to visit anybody’s office.
To ensure the quotes are as accurate as possible, you must provide accurate details to the online calculator or online form that you may be required to fill in. The most decisive bits of information required are: your personal credit profile, the amount remaining to be paid back in your existing mortgage account, and the amount of refinance you want. Other required details would include: type of your house, the number of years you want to stay in the particular house, the type of loan you want (i.e., fixed-rate, adjustable-rate, interest-only, balloon loan, jumbo loan, etc), and so on.
Do not depend on any one website. Takes quotes from at least three websites – and prefer websites that bring you competitive quotes from different lenders or brokers. Pick and choose the quote that best meets with your requirements.
Concluding your deal
Once you have selected an offer made through online sources, then meet up with brokers or lenders. Most probably, the brokers or lenders you meet will be recommended by the websites concerned. Do follow their advice, but also quietly meet a couple of other brokers or lenders. Find out their location through the internet (type ‘mortgage refinance in new mexico’ as search words in www.google.com), but make sure they are not among the ones whose quotes you got through the websites. This is only to ensure that you have a larger plate to choose from. Finally, make your selection – the refinance process takes around two months in New Mexico.