Low mortgage rates have been plastered everywhere by the media for what feels like forever, and every homeowner has had to think about refinancing their mortgage at least once. Believe it or not, most folks who can and should refinance their mortgage now have NOT done so yet.
What exactly is the Annual Percentage Rate (APR)?
Zillow recently conducted a survey for current and prospective homeowners on basic mortgage questions. Of all people surveyed, 34% responded they were unaware of what APR means.
When considering whether or not to refinance it is commonplace to shop around for the lowest mortgage rates. Much like shopping for a car, you wouldn’t bite on the first low price you saw without knowing how much money down was needed, would you?
The APR is a yearly rate that reflects the true cost of your mortgage and is inclusive of your closing costs, taxes, insurance and interest rate. When comparing mortgage rates between companies, you need to make sure to take note of the APR attached to the advertised rate to get a better sense of the deal.
Are All Mortgage Lenders Required to Charge the Same Mortgage Rate and Fees?
You hear on the news all the time about mortgage companies are far more governed and restrictive than they used to be. Due to this, the survey found that 34% believe that all companies must charge the same mortgage rates and fees. This one really made us giggle
Each mortgage company is allowed to charge different fees and offer different rates. It is wise to call around to a few different Lenders and Brokers to compare rates and closing costs.
Can You Refinance Your Mortgage if Your Home is Underwater?
If you owe more on your current mortgage than what your home is worth, then you home is considered underwater. Of those who took the survey, 20% believed that you cannot refinance your home if you are underwater.
This is not true, as the HARP 2.0 Refinance Program will allow you to refinance up to 150% of the value of your home, often without an appraisal. There are restrictions to this program, so see if you qualify.