Refinance A Christian Adjustable Rate Mortgage
Refinance a Christian adjustable rate mortgage loans to a fixed loan is a wise thing to do if a person or family has decided that the area presently lived in is perfect and plan to stay for a very long time. Many people, when buying a house, first choose an adjustable rate lending agreement for a couple of reasons. First would be uncertainty about the immediate future. Questions such as "How long will my job last or what if my next door neighbor is a serial dog kidnapper?" can haunt a home buyer. And besides, an adjustable is often cheaper than a fixed rate and since it is cheaper, a buyer can get just a little more house for his money. Look at some families who decided to refinance adjustable rate mortgage loan agreements to something more befitting of their situation.
The I Love the Air Force family moved to a new air base and bought a house the family loved out in the suburbs. The colonel's initial hitch was for five years and the family bought a house they really like with an adjustable rate mortgage (ARM). Two things occurred with the I Love the Air Force family to make them want to refinance adjustable rate mortgage agreements the family had made several years earlier. First, the colonel got a promotion to second in command and the house payment had begun creeping upward because of hard economic times across the country. Since a VA loan did not meet the exact needs, the family went with the bi-weekly fixed loan where half of the monthly payment is paid every two weeks, thereby paying a thirty year mortgage off in twenty one years.
The man known as the Snake Man in his neighborhood because of his twenty five reptiles he owned also wanted to refinance adjustable rate mortgage agreements he had made many years earlier. Like most ARM holders who eventually convert, higher creeping monthly loan payments were becoming an annoyance. Once his monthly payment had slithered one hundred dollars above his original payments, he decided to de-fang the situation by getting a new Fannie Mae fixed loan. For a one percent cost plus two hundred and fifty dollars, the man got a fixed fifteen year loan. When the neighbors heard he would be around another fifteen years, joy abounded. "The fool hath said in his heart, there is no God. Corrupt are they, and have done abominable iniquity: there is none that doeth good" (Psalm 53:1).
The Happy As a Clam clan had lived at the present address for only two years but had seen the ARM climb each month because of market volatility. This family also decided that the time was right to refinance adjustable rate mortgage agreements that had been made, but knew that retirement was exactly ten years away and planned to move to the mountains of Tennessee at that time. The decision was to get what is known as a Two-Step loan. This mortgage gives the Happy Clam clan a fixed rate for ten years, and then readjusts to the current fixed rate at that time. Since the majority of homebuyers in the current American market stay in homes for seven to ten years, this type of mortgage was developed. Making plans for the future are fine, but Jesus told the story of a man who made very big plans but God had others in mind. "But God said unto him, 'Thou fool, this night thy soul shall be required of thee: then whose shall those things be which thou hast provided?'"
The Silver Threads Among the Gold senior couple had one more year to pay on the present ARM loan. The high cost of living continued to rise and social security wasn't enough to pay the bills. The couple had been missionaries and never had any retirement money put aside, so the twosome needed to refinance adjustable rate mortgage agreements they had, but theirs was a whole different plan. This senior couple decided to get a reverse annuity loan. This creative loan enables the twosome to maintain ownership of their home, but pays them a monthly payment based on a percentage of the home's value. This is tax free income for as long as the two live or until the two move. There are risks involved so a financial counselor was consulted before the couple made such a move.
ARMs are extremely popular when people first buy a house. ARMs represent lower house payments than a fixed loan leaving the home buyer with more money for buying furnishings, appliances and other necessities. On the other hand, the winds of change are always blowing and that certainly include economic conditions. While most ARMs have a cap on how high the mortgage rates can go during the life of the loan, the agreements can often soar as much as eight points, meaning that a house payment could double over the period of a few years. So to refinance adjustable rate mortgage agreements to a fixed mortgage is usually the only way to stop the bleeding.
Of course, to change or refinance adjustable rate mortgage agreements made in years past means that a person's credit scores must have remained high. Since there are a number of things that go into making a good credit history, any one of them can skewer the numbers downward. Factors such as how much debt to income ratio is there presently, how close are accounts to being maxed, how often has a person allied for credit in the past year and how many late payments are on the record are all things that could have been changed since the initial ARM was granted. Can you imagine the situation a borrower could get into that wants to convert to a fixed mortgage because the ARM rates keep going up over the years? So much debt has been incurred that there is almost no money for food and gas and because of a downward spiraling credit score the owner cannot be approved for a fixed lending agreement? The Happy As a Clam Clan can quickly turn into the Three Bears.
Christian Refinance Loan RateRefinance loan rate quotes are advertised in many places online, in newspapers, and on bank statements with the intention of attracting homeowners to the world of refinancing. These numbers are typically lower than the regular mortgage rate to be competitive with the lending market. Most lending institutions have a refinancing department. Quotes are estimates given to individuals based on their credit history. Refinance loan rates are directly influenced by the borrowers credit report score. It is advised that a borrower present the lender with a copy of their credit report less than 30 days old.
A credit report is considered valid if pulled within 30 days. Creditors submit updates to the credit reporting agency monthly, so a credit report can drastically change in 30 days. For Example: a woman gets a refinance loan rate quote from a lender based on the credit report score of 700 that was pulled 15 days ago. The loan begins to process, and 45 days later, the promissory note to sign has a higher interest rate quoted. This woman was told that the refinance loan rate would be under 6% based on the credit score. In actuality, right before the promissory note was made available; a new credit report was pulled by the lender. This new report showed a credit score of 650.
Quotes are lower with the higher credit scores, and higher with the lower credit scores. The woman in the above situation could have just gone on vacation, racked up all the credit cards and because of the high balance on the credit cards, received a much lower credit score. She was quoted based on the credit score of 700 (which is good). Her score of 650 puts her at a credit risk, and thus her refinance loan rate could have dramatically increased. Romans 8:28 says "And we know that all things work together for good to them that love God, to them who are the called according to his purpose." This reminds Christians that prayer and dependence on God is the best way to conduct life.
Refinance loan rates are frequently subject to change, up until the time the promissory note is made available for the borrower to sign. A pre-qualifing quote is not the same as a pre-approved quote and should not be taken for granted. Rest assured that the lending institution will run a credit check the day before the promissory not is released. It is extremely important that those borrowers seeking the best deal be sure that their credit score is high, and that they refrain from using any credit until the promissory note is signed. This will ensure accuracy of the previously quoted refinance loan rates.
Refinance interest rates provide consumers with information regarding the percentage of interest that will be paid when they choose to refinance. This percentage can vary considerably from one mortgage company to another. If the consumer is researching available options for refinancing, there are many mortgage companies to choose from. Each will offer a different refinance interest rate. When a person chooses refinancing, they will be given calculations and worktables to help determine what kind of rate they will be able to achieve. Many of these calculations can be done before the individual officially completes the application process. It is important to seek quotes and information before beginning the application process.
An aspect of a consumers financial history that will affect his or her refinance interest rate is the credit score. Before applying for a loan, the individual should check his or her credit history to make sure they don't find any surprises. Sometimes, an error can show up on the credit report or the individual may even find credit items that they have never seen before. These errors and wrong reports can negatively affect refinance interest rates. It is vital to get them cleared up before going further with research so that it is possible to receive better deals from potential lenders.
Christian individuals can seek refinancing in a variety of forms. Lenders offer both fixed rate mortgages (FRM) and adjustable rate mortgages (ARM) for their loans. A FRM is a refinance interest rate that will stay the same over the term of the loan, whether that is 15 years, 20 years, or 30 years. With an ARM, however, the refinance interest rates will change. If the individual applies for an ARM, they should check to determine what basis the mortgage company uses to change the percentages. Also, it is important to research other factors affecting interest, such as the points that the lender charges and any other fees or restrictions you will incur.
The Federal Truth in Lending Law requires mortgage companies to truthfully report the APR (Annual Percent Rate) that they charge for each loan. By checking out the APR when looking at refinance interest rates, the consumer will be able to compare one company's quotes with another's. The individual will also be able to discover if a lender is charging hidden fees or up-front costs to the loan. The Internet is the greatest resource when seeking information on this and similar subjects. No matter where the individual seeks information, gathering as much knowledge on the subject will allow the consumer to make the best decision. "A wise man will hear, and will increase learning; and a man of understanding shall attain unto wise counsels" (Proverbs 1:5).