New American Funding

Refinance

There are times when it makes sense to refinance your mortgage. It's important to have a clear financial objective in mind so that you're more able to choose the most appropriate loan. Ultimately, the decision is up to you to decide when it's best for you to refinance, based on your individual financial situation.

Refinance from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate
It's important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future. This means that if you have an adjustable rate mortgage (ARM), it may adjust to a rate that's higher than a fixed-rate mortgage . Now might be a good time to consider refinancing to a fixed-rate loan.

However, you must also consider the amount of time you plan on being in your home. If you're only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. If you're going to be in your home longer than seven years, it might be a smart move to refinance to a fixed-rate mortgage.

Refinance from a Fixed-Rate Mortgage to an ARM
Again, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you're not going to be in the home that long. Doing so may be costing you money. Consider refinancing to an ARM instead — you'll get a lower rate and lower your monthly mortgage payment.

Lower Your Monthly Mortgage Payment
A drop of just one half to three quarters of a percentage point in interest can lower your monthly payment. If you don't refinance, you may be paying too much every month for your loan, and that's never a good financial move.

Refinance to a Lower Interest Rate and Payment
Change the term of your mortgage. For instance, if you have a 15-year mortgage, you can lengthen the term to 30 years. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower. However, if you have a 30-year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to 20 or even 15 years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run.

Refinance to an Interest-Only Loan
Basically, with an interest-only loan, the minimum amount you are required to pay is the amount of interest for a certain period of time, though you can pay as much principal as you like. But you get the flexibility to pay less if you need or want to divert your money elsewhere, such as contributing to your 401k or saving for your child's college tuition.

Use our refinance calculators above to see how you could lower your monthly mortgage payment, change your rate or change your term.

Getting Cash from Your Home
The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance. This is usually done when you want to finance an important home improvement, pay for college or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.

Consolidating High-Interest Credit Card Debt
The difference between credit card debt and a mortgage can, financially speaking, mean thousands of dollars. Why? Because unlike your mortgage, the interest you pay on a credit card is not tax-deductible and you pay a higher rate than you would on your mortgage. Because of this, credit card debt is often referred to as "bad debt" whereas your mortgage is considered "good debt." Using your home equity to pay off your high-interest credit card debt can save you money in the long run. Using your home equity, rather than your credit cards, to finance expensive purchases can also be a smart move. Be sure to consult your tax advisor.

Deciding on when to refinance your mortgage will depend on the circumstances of your situation: how long you'll be in the home, what your financial goals are, whether interest rates are dropping, etc. It's up to you to decide if it's right for you.

Thinking About Purchasing a Home?
The following is a list of documents generally required when applying for a home loan. For a fast and easy loan process, have these items available when you're ready to complete your application.

Proof of income You'll usually be required to show original pay stubs for the last 30 days.
Copy of homeowners insurance This is to verify that you'll have sufficient coverage on the property.
Copies of your W-2 forms Last two (2) years required for each applicant. This will help your lender verify employment and income history.
Copies of asset information This includes any accounts where money may come for closing. You may need to provide statements for your savings, checking and 401K accounts; as well as investment records for any mutual funds or stocks.
Copy of title insurance This will help your lender verify the legal description of the property, the taxes, and the names on the title.

Once you've begun the loan process, one of our mortgage specialists will let you know exactly what documentation you'll need to get approved. Keep in mind - the more information you have ready before you apply, the faster your loan will close.
Want to talk to one of our mortgage specialists?

Six Simple Things to Ensure a Smooth Home Purchase
What kind of home do you want? Need? Before you get out there and start looking at houses, it's a good idea to determine not only what you want in a house but also, more importantly, what you need. It focuses your house hunting and saves valuable time not trudging through houses you wouldn't in a million years dream of living in.

Things to Think About

Where do you want to live?
Do you want to live close to your family? Or as far from them as possible? Do you need schools? How important is it to you to be close to shopping? Work? Hospitals? Entertainment? Community amenities? Traffic? Looking for a house really starts with looking for a neighborhood. Deciding where you want to live will save you a lot of time as well as miles on your odometer and is key to narrowing your search for a home.

How long do you expect to live in your new home?
For instance, if you plan on living in your new home for only a few years, or if you don't have children, then proximity to schools may not be an issue, but resale value may be. On the other hand, if you plan on staying put for ten years or more and have a family, schools as well as home size will be priorities.

What don't you like about where you're currently living?
Making a list of what you definitely do not want in a home will help you weed out homes without having to waste your valuable time looking at them.

It may seem obvious, but take a good look at your lifestyle. Do you entertain a lot? Then you'll want a home that lends itself to that. Do you work from home? You'll need a home with a place to create an office. Are you a gardener? Then lot size is a priority.

Keep these things in mind as you make your list of home wants and needs. And remember, your list needs to be flexible in case you can't find a home in your price range with all the amenities you want. It's a good idea to put the list in order of importance. For instance, an eat-in kitchen may be more important to you than a fireplace.

How Much Home Can You Afford?
Few things are more frustrating than falling in love with a home only to discover that it's not in your price range. But, how do you know what you can afford? By knowing how much money you can qualify to borrow. Your New American Funding mortgage specialist will help you determine exactly how much you qualify for - and our technology allows them to do so in minutes.

Get Approved Before You Shop
Why apply for a mortgage when you haven't even started looking for a house yet? Because when you get approved before you shop, you're in a better position to negotiate because the seller knows that you're already approved for your mortgage and that your offer is good. This gives you a powerful edge as a buyer.

Unlike other lenders' "pre-qualifications" or "pre-approvals," New American Funding will make sure your credit score, income, assets and employment have all been verified and your home loan amount has been approved*. Take a look at these great advantages:

You know exactly how much home you can afford, eliminating the guesswork
You're in a better position to negotiate a lower purchase price because the seller knows your offer is good
Once the appraisal and title work's been done, you can close on a home in days not weeks - potentially saving the seller a lot of money- another bargaining chip
You're a virtual cash buyer - it's like shopping for a home with the money in your pocket
An approval is good for 2 months

Purchasing a Vacation Home?
It's vacation season. Whether you're enjoying a beachfront house, country cottage, or mountain chalet, chances are you have a vision of calling your favorite vacation spot "home" one day.

With an expected increase in demand, today's favorable interest rates, and creative home-financing options, it's a great time to invest in a vacation home. In fact, it's a wise investment. This trend will likely continue. As baby boomers begin to retire, it's expected that more than 30 million Americans will buy a vacation home within the next decade.

With rising demand in popular vacation areas, knowing your home-financing options and how much you can afford can make a big difference in getting your perfect vacation home. Many homeowners use the equity in their primary home to finance their vacation investment, or take advantage of other financing options such as interest-only and zero-down programs.
Before you begin your search, here are a few things you should consider:

Family appeal: How does it fit the needs of your family? Will there be space and activities for family members who visit?
Travel time: If it takes all day to get to your vacation home, you may not visit it as frequently. Two to three hours travel time is ideal.

Climate: What is the area like year-round, especially during off-season? What are the political and tax issues? Browse through local newspapers as a guide.

Healthcare facilities: If your vacation home becomes your primary residence one day, quality healthcare may be one of your top priorities.

It has never been easier to bring your vision of a beachfront, mountain, or lakeside property into focus. With the proper planning and home financing, your dream of owning a vacation retreat can be a reality.

Thinking About Buying Your First Home?
If you're a renter and thinking about purchasing a home, there are several things to consider:
How long do you plan on living in the home?

If you purchase a home and then get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.

The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan on staying in your home at least three to four years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.

How Long Will the Home Meet Your Needs?
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has what you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

Is Now the Right Time Financially for You to Buy a Home?
Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, New American Funding may still easily provide you with a loan.

Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it's within your comfort zone.

Down Payment
Typically homebuyers will need some money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.
The ongoing costs of home ownership

Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium or a town home, in certain communities a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.