Three Refinancing Questions For Friends

by A Good Friend

Ask Kate: Three Refinancing Questions For Friends Hi Kate, I have three questions I would recommend my friend to ask when refinancing. The questions will uncover important information regarding interest rates, type of program, and mortgage closing costs.

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1. What are the rate and term which my payment will be based upon? Depending on the reason for the refinance, will depend on the term you will be looking for...

If you're looking to reduce the term of your current mortgage you may be okay with the slightly higher monthly payment.

If the refinance is to cash out a portion of your equity to consolidate debt or do some home improvements, it may be better to apply for a program with a longer term to provide a lower payment. Rates are lower with shorter terms.

2. What type of mortgage program is it? Fixed, Adjustable Rate, Interest Only, Full Documentation, or Reduced Documentation?

This question is important because some of the current mortgage crisis has stemmed in part from consumers not knowing what type of program they are applying for along with the details of that program.

This question also goes along with the first question. Depending on the program, this will affect the rate associated with the program.

3. How much are the closing costs and prepaid fees? Depending on the lender, it may appear that you're putting another down payment on your house because the closing costs are so high.

In the end, I would advise my friend to shop around and do as much research as possible because it is a very big financial decision to leave up to what a lender tells you.

Kate Answers: Three Refinancing Questions For Friends

Hi Good Friend, Thanks for sharing your three refinancing questions for a friend.

I hope you'll come back to my website Get Your Best Mortgage Rate again in the future. So remember to bookmark Get Your Best Mortgage Rate to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice.

Best Wishes,

P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

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