- Chase Mortgage is a national and well-respected lender.
- Refinancing is a complex process and you should get multiple loan quotes.
- Shop around to get the best rate!
BILL'S ANSWER
Great question about Chase and about refinancing a mortgage in general. I'll try to give you some tips about refinancing with Chase Mortgage, and also try to get you some details about how to refinance and key considerations, regardless of whether you go with Chase or not.
Knowing whether it is a good idea or good time to refinance depends on a lot of different factors. Here are a few general questions for you to consider. What is your goal in refinancing? You say you are age 66. How far into your current loan are you? Are you going to have the income to meet the new loan's payments as you get older? How long do you plan on staying in your home? I will go into detail later on in this review about key refi considerations, but I'll also address your question about Chase Mortgage.
Chase is a national lender that operates in all 50 States. You can review the Bills.com review and get a Chase Mortgage profile to understand more about Chase. It is often a good idea to check with your current lender to see if refinancing is an option, because they have your information already, and closing costs can be lower. If Chase is your current lender, then that may make sense. At the same time, it makes great sense to shop around and see where you can find the best loan. A good place to start is to use the mortgage refinance tool you will find at Bills.com's Mortgage Refinance Quote.
Before you even start the refinancing process, it is good for you to know certain things that any lender will ask of you. Know your credit score, household income, what you spend on car payments or monthly credit card minimum payments, and the approximate value of your home. Information is power. The more information you have ready and the more confident you are in presenting it, the less likely it is that you will have someone try to take advantage of you.
Because your credit score is an important factor in the kind of loan you will qualify for, you may find that waiting to refinance until after you take some steps to raise your score is a good idea. Of course, this depends what your current score is. Here is a great article to review about Understanding Your Credit Score. If you want to receive a free copy of your credit report, there is a link within that article, in the lower right hand corner of that page.
I will also give a quick overview on how to refinance, since you asked not just about Chase, but also about how to refinance.
Refinance Overview and Refinance Tips
If you are curious about what Chase and other lenders will look at when you apply to refinance, here are the main considerations that a lender will consider:
Credit Score & Credit History
First, your credit history is a major consideration when you are shopping for a new mortgage. A favorable credit score will increase your chances of finding the best loan with a low rate and low points, since you will qualify for better interest rates than those available to people with credit problems. Currently, the average interest rate for a new 30 year fixed-rate loan is below 5.00%, and the median FICO credit score (the score where half the population is above, and half is below - more relevant than the average score) is 723. So, if your credit score is better than 720, you should expect to qualify for an interest rate of around 4.87%, or possibly lower. However, if you have had credit problems in the past, you could be forced to pay a significantly higher interest rate, which could make your monthly payments much higher.
For example, the monthly payment on a $100,000 30 year mortgage at 6.5% is approximately $630, plus insurance, taxes, etc. If the interest rate on the loan increases to 9.5%, the monthly payment increases to $840, an increase of over $200 per month. As you can see, your credit score, which is one of the major determinants of your interest rate, is extremely important when shopping for a new mortgage.
Loan to Value
The amount of equity you have in your home (or its inverse - the loan to value, or LTV), and the length of time you have been paying on your current mortgage will also be major considerations. In order to lower your payments, you must either obtain a loan with a lower interest rate than your current mortgage, find a mortgage with a longer repayment term, or borrow less than the original balance of your current mortgage. For example, if you have $60,000 left to pay on a $100,000 mortgage, you could cash out $40,000 in equity and keep the same monthly payment as the old loan, assuming the interest rate and loan term remain the same. However, if the balance of your new mortgage will be more than that of your old mortgage, you must either find a lower interest rate or take a loan with a longer repayment term if you want to keep your monthly payments the same. You build equity in two ways: when you pay down your mortgage over time, and when your home appreciates in value.
Debt to Income (DTI)
The third big variable is your debt to income ratio, or DTI. Debt to income is taken as a measure of your ability to comfortably make payments on the mortgage with your cash flow. Most lenders look at combined DTI, so the percent of your income that goes to debt payments (including mortgage, auto loans, credit cards, etc.) to make sure that you can afford the loan. Some lenders will allow stated income loans, where income is not formally verified, although given what has happened with defaults, it is more difficult to get approved for a high DTI stated income loan.
Refinance Summary
There has never been a better time to refinance, but you need to understand the process and all of the variables that impact your rate and your chances of being approved. As I mentioned before, you need to shop around with different lenders and brokers to find the loan that best suits your needs.
If you enter your contact information at the top of the page under 'Get a Mortgage Quote Now!,' we can have several pre-screened mortgage professionals contact you to discuss the Mortgage Refinance options available to you.
If you would like to read more about mortgage refinance loans, I encourage you to visit the Bills.com Home Refinance Resources page.
I hope this information helps you Find. Learn & Save.
Best,
Bill
Los Angeles, CA | August 25, 2011
August 26, 2011
Elizabethtown, KY | February 11, 2011
February 11, 2011
Please take a minute or two to fill out a mortgage lender review about Chase. Using the link I posted, you will find a page that lists different mortgage lenders. Please click on the "write review" tab next to Chase. This way, more of our readers will find your opinion about Chase.
Franklin Square, NY | April 12, 2011
April 12, 2011
North Lauderdale, FL | January 26, 2011
January 27, 2011
- Status quo: Keep paying your interest only and cross your fingers the market in your area bounces back quickly. You did not mention where you live, so I cannot comment on the viability of this option. It is unlikely the property values will bounce back soon if your neighborhood is a ghost town.
- Work out a deal. Consider a short refinance. The advantage of this approach is you do not need to find a new house and move all of your belongings. If you like your home and neighborhood, investigate this option. If you do not want to stay in the home, then pursue a short sale.
- Walk away. This is known as a strategic default. The downside to this approach is it wreaks havoc on a credit score, and opens you up to liability for the deficiency balance. This is a common tactic, as about a quarter of all foreclosures in Nevada, to pick a notable example, are strategic defaults.
There are no easy choices in your situation. It may not help you to know your situation is shared by many, but you are not alone with this decision.
North Lauderdale, FL | January 28, 2011
December 16, 2010
Mortgage underwriters look for four things in a perfect refinance candidate:
- Stable income history: You wrote you and your spouse are lawyers with good income, so I will assume your income is stable (though there are hundreds of lawyers looking for work in some areas of the country)
- Clean credit history: You mentioned twin 755 credit scores, so your credit history should not be an issue
- Equity: A perfect candidate has a loan-to-value (LTV) of 80%. If your LTV is 80% or less, then that is not the reason Chase's underwriter gave your application a thumb's down.
- Debt-to-income ratio (DTI): Loan underwriters look warily at DTIs greater than 35% (See the Bills.com article Debt to Income Ratio to learn how DTI is calculated.)
You did not mention your DTI, which may be the reason why Chase's underwriter denied your application. However, it is also possible Chase's underwriter simply made a mistake. Fortunately, you have many, many options when shopping for a refinance.
December 15, 2010
Long Beach, CA | December 15, 2010
September 30, 2010
September 24, 2010
September 24, 2010
New Hyde Park, NY | December 14, 2010
San Mateo, CA | December 29, 2010
Jersey Village, TX | January 16, 2011
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