DuPage County Mortgage Lender lists 10 things you NEED to know about a Refinance

I was on my way to sleep and had the TV on the Discovery Channel, I hear the announcement of what I think is a new show.  10 things you need to know, not the 10 things you should know, but the 10 things you need to know.

So it go me thinking....I am going to start a series of 10 things you NEED to know about Mortgages.  There are so many different things you need to know about mortgage and so many different aspects of the mortgage industry, that unless you live it, sleep it, work it, eat it you can not possibly know them all.

I am going to start with

10 things you NEED to know about refinancing your loan

1. Your principal balance on your statement is not your pay off amount.  - Interest is paid in arrears on your loan, so the principal balance does not reflect the amount of interest due from the time of that statement to the time of the payoff. 
2. You do not have to increase the pay off balance of your loan when you refinance you existing loan. - Your new loan can be the exact amount of your payoff if you want to pay the closing costs, title charges, escrow amounts and interest at closing.
3. You can refinance for a lower amount than your current payoff. -  If you have additional money you would like to apply, you can lower the amount of your new loan by the amount of money you want to lower the balance by.
4. You do not have to wait until the rates are 1% or more lower than your current rate to refinance. - If you have PMI (mortgage insurance), want to lower your balance, change from an adjustable rate to a fixed rate, or take cash out, it may not matter if the rate is more than 1% lower than your existing rate.
5. If your loan is more than 80% of the value of your home, you will have to escrow your taxes and insurance into the mortgage.  - This applies to standard conventional and FHA loan, sub-prime loans do not apply.
6. Your house may not appraise for thousands more because you have painted and put new carpet in the home. - The value of the home from the appraiser's analysis is based on the homes that have sold in your neighborhood within the last 6 months and that are similar in sq footage, and style. 
7. You can pay off a home equity loan or line of credit when you refinance your 1^st mortgage or you can leave it in 2^nd position. - If you have a 2^nd mortgage, it may not have to be paid off and closed depending on the loan to value of the home.
8. If you choose to have an escrow account, you will have to establish a NEW escrow account your current mortgage company will not transfer the money to the new lender. - Most escrows will be refunded to you within 30 days of closing, few will deduct it from the payoff of your loan.
9. You do not always have to come to closing with money. - If you are able to raise your loan amount a little more than the payoff, you can roll in the closing costs and the amount for the escrow (if establishing an escrow account)
10. A new title will need to be pulled for a refinance. - Title is done everytime a new loan is taken on the home to ensure no additional liens since the time of the original loan. 

You can get a FREE analysis of your mortgage to see if refinancing is an option for you in Illinois.  Servicing DuPage, Kane, Lake and Cook Counties. 

Kim Murphy    1st Advantage Mortgage