Thursday, February 10, 2011

FAQs About Mortgage Refinancing

Excerpt from FAQs About Mortgage Refinancing
By Holden Lewis,

You have mortgage questions, and this article has the answers.

Bankrate senior mortgage reporter Holden Lewis recently answered borrower questions about home loans during a live chat on Bankrate is publishing the highlights of that Q&A session.

1. Should I tap my 401(k) to pay the mortgage?
Consult a financial planner on that one. Why borrow against your retirement savings to pay off a second lienholder of an asset whose value is declining?

2. Will lenders court an underwater borrower?
Yes, lenders seem reluctant to pick up underwater HARP refis. But sometimes they do it. You could try looking at the rate tables at Or, ask friends, family and co-workers for referrals to lenders. When you rate-shop during a short period, all of your mortgage inquiries are lumped together as one inquiry for credit-scoring purposes.

3. Can I refinance again after 3 months?
If anything blocks you from refinancing a 3-month-old loan, it would be the recorder's office. Back in 2003, mortgage recordings were backed up by months in many county recorders' offices, stalling refinances. As long as there's not a delay there, you should be able to refinance.

4. Why does my lender downgrade my credit score?
Ask the lender to show you the credit history part of the credit report. If there are any errors, ask the loan officer to get a "rapid rescore." There might be issues with credit card balances near the limit.

5. Does a second mortgage complicate my refinance?
The second lienholder will be reluctant to resubordinate -- that is, to agree to remain in the second lien position after you refi the first lien.

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