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1-877-88ISLAND
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Island
Equity Mortgage
555 Broadhollow Road
Suite 203
Melville, NY 11747 |
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What are the reasons for
refinancing?
There are many benefits to
refinancing; it just depends
on what your objectives are.
Some of the most popular
reasons are:- To lower your monthly
payments by refinancing at a
lower interest rate.
- To convert a portion of your
equity into cash by
obtaining a new loan for a
larger balance than your
current loan.
- To switch from an adjustable
rate to the stability of a
fixed rate.
- To consolidate debt by
refinancing a higher loan
balance and using the cash
difference to pay off credit
cards, auto loans or other
debts.
- To pay off the mortgage
sooner by switching to a
shorter term.
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Call us toll-free and speak
to a personal loan consultant to find out if
refinancing is right for you.
How do I apply for a
refinance loan?
Either fill out
the application online or call us directly
and you may be approved in minutes.
What are the costs involved
in refinancing?
The closing costs, including
lender fees, tend to vary
depending on the loan amount. In
addition, you may choose to pay points in
order to get a lower rate, or accept a
higher rate in exchange for having the
lender pay some or all of your closing
costs.
What criteria do lenders use
when approving a loan?
Lenders look at three
criteria: Capacity, Credit
and Collateral.
CAPACITY
The lender will weigh your
housing expenses and total
debt against your monthly
income to determine your
ability to repay a loan.
They’ll also need proof that
you have the cash available
for down payment and closing
costs by verifying funds
from sources such as bank
accounts, stocks, bonds,
mutual funds, sale of an
existing home, or gifts from
family members.
CREDIT
To determine your credit
risk, the lender will look
at previous mortgage payment
history, rent payment
history, credit card use and
installment debt payment
history. If you pay your
bills regularly and on time,
you’re demonstrating the
integrity that lenders are
looking for in a borrower.
COLLATERAL
When you ask for a home
loan, you’re putting the home itself up for
collateral, so the lender will want to know
what the home is worth.
How much documentation will
I need to supply to verify
the information I provided
on my application?
Every situation
is different. Once you submit your loan
application online you’ll automatically
receive a customized list of the documents
you’ll need to provide. If you apply over
the phone, you’ll receive this list within
three business days.
What is Private Mortgage
Insurance (PMI) and why
would I need it?
In most cases, if your first
mortgage amount is greater
than 80% of the property’s
value, the lender may obtain
Private Mortgage Insurance (PMI)
to safeguard its investment
against the possibility of
default. PMI is collected
monthly along with the
mortgage. Within three days
after your loan application
is submitted you’ll be sent
an estimate projecting the
amount of the monthly PMI
payment. As your equity
increases, you may qualify
to have PMI removed. There
may be ways to finance your
home so that PMI is not
required. Your loan consultant can provide
you with more information.
What is homeowner’s
insurance?
Homeowner’s insurance is
designed to protect your
home. It is also known as
hazard insurance, or fire
insurance. While the lender
requires this coverage, you
determine which insurance
company will carry the
policy. Homeowner’s
insurance premiums are
either paid directly to the
insurance agency or by your
lender through an
impound/escrow account. back
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How does a refinance closing
work?
The refinance closing will
be conducted the same way
that your loan was closed
when you first purchased the
property. Soon after your
loan is approved your loan
consultant will send a list
of documents you’ll need to
bring to the closing. You’ll
also be sent an Estimated
Settlement Statement that
tells you the amount, if
any, you’ll need to bring to
closing in the form of a
cashier’s check, as well as
an outline of how the funds
from your new loan will be
disbursed. If this is a
refinance of a primary
residence, the loan won’t
actually fund until three
business days after signing
the loan documents, due to
the borrower’s right of
rescission. To find out
more, see in our Glossary.
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