Mortgage & Retirement Professor

Questions About Refinancing a Mortgage

Note: Home owners looking to refinance may have the same questions as house purchasers about loan features, loan providers and loan shopping. You can explore these topics by clicking on House Purchasers. The questions below apply only to refinancing.
What Is the Break-Even Period, and How Do You Calculate it? What Is the Most Common Mistake Borrowers Make in Assessing the Benefits of Refinancing?
Can the Costs of Refinancing Be Avoided Through a Modification of the Contract that Reduces the Interest Rate? Why Is This Not a More Widespread Practice? What Are "Streamlined Refinance" Programs?
Under What Circumstances Can My Current Lender Offer Me Lower Refinance Costs Than a New Lender? What Is the Best Negotiating Stance to Take With My Current Lender?
What Factors Affect the Relative Advantage of Taking Out a Second Mortgage in Combination With a First, Rather than Paying For Mortgage Insurance? What Type of Borrower Finds the Combination Loan Most Attractive?
Can I Include Settlement Costs in the Loan Amount When I Refinance?
What Factors Determine Whether a Person With Two Mortgages Should Refinance One or Both, and if Both, Whether They Should Be Consolidated on Not?
What Factors Determine Whether Raising Cash Is Cheaper Using a Cash-Out Refinance or a Home Equity Loan ?
In What Ways Are the Refinancing Decision and the Extra Payments Decision Related? What Factors Should Enter the Refinancing Decision? The Early Payoff Decision?
When You Refinance, What Is the Best Way to Keep the Original Term ?
Why Must a Borrower Who Wishes to Refinance a First Mortgage Get the Permission of the Second Mortgage Lender? What Are the Different Policies that Second Mortgage Lenders Have in Permitting This?
Why Would a Broker Offer You a Below-Market Deal If You Agree to Take Out a High-Rate Loan for Two Months and Then Refinance Into a Low-Rate Loan?
What Is the Scam That Has Caused Many People to Lose Homes They Have Received Under the Habitat For Humanity Program?
What Is the Scam That Leads Borrowers to Believe They Can Avoid a Prepayment Penalty by Refinancing Twice?
What Is the Scam That Leads Borrowers to Take Small Amounts of Cash in Frequent Refinances?
What Questions About Refinancing Are Asked Most Frequently? With Interest Rates so Low, Why Isn’t the Refinance Decision a Slam Dunk? How Does Making Extra Payments Affect the Decision to Refinance?
What is the Best Way to Measure the Costs and Gains From Refinancing?
Why Is the Cost of a Loan for Refinancing Higher Than the Cost of an Identical Loan Used to Purchase?
Why Is the Refinancing of a First Mortgage When There is a Second Mortgage in Place Considered "Cash-Out?"
In What Ways Do Prior Refinances Affect the Next One?
What Types of Refinancing Transactions Have the Highest Potential For Regret, on Which the Right of Rescission Should Have the Greatest Value?
What Factors Should Enter the Decision as to Whether or Not to Refinance an ARM Into a FRM?
Should Lenders Be Held Responsible if Borrowers Do Not Benefit From a Refinance?
What Is a Bad Refinance Decision, and Why Are They So Common?
Why Is It Easier to Shop For a Refinance Mortgage Than For a Purchase Mortgage?
How Can a Refinancing Borrower Enjoy the Strategic Advantages of Shopping For a No-Cost Mortgage Without Actually Taking One?
Which Borrowers Are Able to Refinance Profitably In a Stressed Market?
Under What Circumstances Can Repaying Part of the Loan Balance Substantially Lower the Cost of a Refinance?
What Are the Spurious Reasons For Not Taking Advantage of a Profitable Opportunity to Refinance?
What Is Wrong With Determining the Break-Even Period on a Refinance By Dividing the Upfront Cost By the Payment Reduction?
Should a Borrower With a Low-Rate ARM, Who Is Expecting Market Rates to Increase, Refinance Into an FRM Immediately, or Wait Until the Rate Increase Process Begins?
What Is Cash-in Refinancing, and Why Did it Become Important in 2010?
What Are the Major Shortcomings in the Refinance Programs of Fannie Mae and Freddie Mac?
How Can Borrowers Refinancing Out of a High-Rate FRM Into a Low-Rate ARM Reduce the Risk That They Will Still Have the Mortgage When the Rate Adjusts?
Does a Pending Sale of the House Increase or Decrease the Likelihood That a Refinance Will Be Profitable?
What Issues Should Refinancing Borrowers Be Wary of in Paying Off the Old Mortgage?
What Options Are Available to a Borrower Whose Application to Refinance Has Been Rejected?

Why Is It That Some Borrowers Have Profitable Refinance Opportunities That They Do Not Take Advantage of?

Is There One Place I Can Go to Price New Loans Reliably, and to Compare the Cost of These Loans to the Cost of Retaining My Current Mortgage?

Why Is It a Good Idea For Borrowers Refinancing Their Mortgage to Prepare to Rescind it Well Before Closing?
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