When i got my mortgage a year ago my credit wasn't very good, but since obtaining mortgage i have paid on time. does any one know how i can get interests down? if i remortgage i have to pay redemption fee makes the whole thing unapplicable.
2006-12-03 04:49:05 · 10 answers · asked by TONY S 1 in Business & Finance ➔ Renting & Real Estate
The only way is to refinance.
2006-12-03 04:52:40 · answer #1 · answered by Me 2 · 0⤊ 0⤋
Unfortunately only option is to refinance to lower the interest rate. You have an extremely high rate and I would bet your credit has gone up tremendously due to your on time mortgage history over the last year, thus your rate should drop by atleast a point if not 2 points. To me that would be enough in savings a month for your mortgage to compensate for having to pay redemption fees but that is something you need to analyze and decide. Keep in mind you could possible pull cash out and pay it or even consolidate credit cards or just take cash in hand too. I hope that answers your question or at least gives you some advice but if you any further questions or need help refinancing please feel free to email me.
2006-12-03 10:27:10 · answer #2 · answered by Dan 3 · 0⤊ 0⤋
You will need to weigh the options. Most pre-payment penalties are only for 2 years depending upon the state. If you have been in the mortgage for a year, it might make sense to wait until the pre-payment has expired. Check to see if your pre-payment penalty gets reduced over time. Calculate how much interest you will pay until the pre-payment expires.
Compare the interest you will pay to how much it would cost with a lower rate and paying the pre-payment penalty. The last option to look at is to contact you current lender. Sometimes your lender will waive the pre-payment penalty if you refinance with them. Be careful with this option because your lender will know they are the only ones who can waive the pre-pay and will offer you a rate accordingly. Some lenders will reward you for making your payments on time by reducing your rate.
Also, check on the terms of your mortgage. If your credit wasn't that good, you may be in an extended term (40 or 50 year) or interest only mortgage. If you are in these types of loans, you may not see a huge difference in your monthly payment.
2006-12-07 04:09:59 · answer #3 · answered by Mama of Four 4 · 0⤊ 0⤋
Hold the phones - there is another possibility other than refinancing, but it may not apply. Refinancing can still be beneficial even if the other option is open to you, get a mortgage broker to run a free analysis for you - I'd gladly help www.fnmshome.com, but... there may be another way.
Most don't, but a few companies will look at what your payment history has been with them and may be able to offer you a loan modification instead of a full blown refinance. This might cost you a couple hundred dollars rather than a few thousand, and could benefit both you and your current lender. They don't lose your business to a competitor and you get a lower rate without a major additional expense - it may be worth a call or two
2006-12-06 19:54:57 · answer #4 · answered by walkinandrockin 3 · 0⤊ 0⤋
Two ways.
1. You can refinance, and yes, you will have closing costs. But, remember, although you have paid your mortgage on time, many other factors come into play including payment history of revolving debt (credit cards) and installment loans (such as car payments), your debt to income ratio (how much you owe compared to how much you make). You can get a Good Faith Estimate from a lender to see if it is beneficial for you to refinance.
2. The other way (if you can afford to) make an extra mortgage payment whenever you can. The extra payment will go directly toward the principal of your mortgage (the amount you borrowed before interest). In the first few years most of your payment goes toward interest, not principal. In the long run, your interest rate is reduced. Call your current lender and they can explain it clearly and answer your questions.
2006-12-03 05:12:16 · answer #5 · answered by leslie 6 · 0⤊ 0⤋
Only way is to re mortgage.
Why not try a lender who offers cashback.
The lower interest rate combined with the cashback offer may out weigh any redemption and arrangement fees you have to pay.
West Bromwich Building Society are doing a 6 % cashback mortgage
So are Dudley Building Society
2006-12-03 05:47:03 · answer #6 · answered by angie 5 · 0⤊ 0⤋
You'll have to re-finance to get your rate down. Get quotes from local lenders and see what's the best way to go.
A year's worth of on-time payments will help, but it might not be enough just yet to get your rate down significantly unless you had a bunch of bad info fall off during the past year.
2006-12-03 05:41:16 · answer #7 · answered by Bostonian In MO 7 · 0⤊ 0⤋
It might be worth paying the redemption fee if you switch to a much lower rate. 8.49% seems high. Good luck
2006-12-03 04:54:09 · answer #8 · answered by Scotty 7 · 0⤊ 0⤋
Call a few mortgage brokers. Let them go to work for you. They should be hungry for business. Don't give any money up front.
2006-12-03 04:58:07 · answer #9 · answered by Gone Golfing 2 · 0⤊ 0⤋
Compare quotes for a possible refi
http://www.reversemortgagepage.com/topic.php?topID=18
2006-12-04 06:21:38 · answer #10 · answered by Byron W 3 · 0⤊ 0⤋