FAQ

Do Joonago mortgage refinance rates vary depending on your transaction type?

The rates do vary depending on whether you are refinancing your home to solely lower your mortgage rate or planning on cashing out to do home improvement or consolidate debt such as combining your first and second mortgage. Typically, the lowest refinance rates are for rate/term refinance loan where your only objective is to lower the term or the rate on your mortgage without taking any cash out. Lastly, Joonago mortgage refinance rates also depend on the loan-to-value of your home. The higher the loan-to-value of your mortgage, the higher the interest rate.

What are your options to refinance first and second mortgage?

Combining your first and second mortgage helps lower your total mortgage payment while providing you with the ease of having just one mortgage payment. Since the rate on a second mortgage is typically higher than a first mortgage, it often results in a lower mortgage payment when you combine your first and second mortgage into a new first mortgage. Whether or not the mortgage company will allow you to combine the two will depend on the type of mortgage you are applying for.

How many times can you refinance your mortgage?

You can refinance your mortgage as many times as you want so long as there is a net tangible benefit from the refinance transaction. Some mortgage lenders require that the refinance results in at least 5% lower mortgage payment than that of your current. However, it is bad to refinance your house multiple times if the cost associated with your refinance keeps on increasing your principal mortgage balance beyond a reasonable period recoupment. Typically, if you can lower your mortgage payment by 5% and recoup the closing costs in an average of 18 months, it might make good sense for your to refinance your mortgage.

Is there such a thing as mortgage refinance with no closing costs?

Yes you can refinance your mortgage with no closing costs but the interest rate is likely to be higher. A no closing cost option typically results in you getting a higher mortgage rate as the banks absorbs the costs associated with your loan. Basically, what the mortgage company will do is offer you a higher rate in order to pay for your closing costs. Depending on what your long term goals are a no closing cost refinance might be a good options. Here is a simple rule for determining if you should do a closing costs or no closing cost refinance:

  • If you plan on selling your home within the next five years, you should shop for a limited or no closing cost refinance loan option;
  • If you plan on keeping your mortgage for a long time, then you should really opt for the lowest mortgage rates with closing costs as this allows you to save more money over the life of your mortgage loans.

Do you need a refinance calculator to find the lowest mortgage rates?

Using a refinance calculator is not going to help with getting the lowest mortgage rates. You need to first shop for the best mortgage rates today and then determine if there is enough savings to justify refinancing your mortgage. A good rule for determining if the mortgage rate offered to you benefits you is to take the monthly savings in your new mortgage payment and look at how long it will take you to recuperate the closing costs associated the new lower mortgage rate.

Do you need an amortization table to determine if you are getting the best mortgage rate?

Amortization table only helps to determine how much of your monthly mortgage payment goes towards principal and interest each month based on the life of your loan. To determine the true cost of your loan, you really need to look at the finance charge disclosed on the Truth-in-Lending disclosure statement provided to you by the mortgage company. Remember, banks are not lending money for free and when you factor the time value of money/inflation over a 30 year mortgage, you are always going to pay a lot in finance charge so don’t freak out. The best use of an amortization table in my opinion is to determine what your loan balance will be at a particular year if you plan on selling your home.

Are home equity loan rates different from mortgage rates?

The answer is yes. Home equity loan rates are most often tied to the prime rate and depending on market conditions can be lower or higher than 30 year fixed mortgage rates. Also, home equity loan rates are typically adjustable rates that fluctuate monthly. If you are looking for home equity loan rates that are fixed, chances are that the rate will always be higher than a traditional first lien fixed mortgage.

Do first time home buyers receive special mortgage rates?

First time home buyers receive the same mortgage rates as someone that previously owned a home. Mortgage rates for first time home buyers vary depending on credit and percentage of down-payment. The better the credit score typically results in lower mortgage rates. First time home buyers are often advised by housing counselors to work with a local mortgage broker due to the personal attention and accessibility to multiple home financing programs. Most importantly, first time home buyers need to remember that mortgage rates fluctuate daily. So, when shopping mortgage rates keep in mind that they can fluctuate from the time you get pre-qualified, to the time you find your home.