Refinanced Mortgage

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Refinanced Mortgage

A mortgage one repays by taking out another mortgage. Refinancing a mortgage can allow one to secure a lower interest rate; for example, one can replace a mortgage at an 8.5% rate with one at 5.5%. In the case of a balloon loan, refinancing can repay the principal if one does not have sufficient funds to do so; that is, if one has made only interest payments over the life of the loan and has not saved the principal amount when the loan comes due, refinancing can prevent bankruptcy. There are two main drawbacks to refinancing. First, there is no certainty that one will be approved for it. One thus takes a risk every time one decides to make only interest payments on a mortgage. Secondly, refinancing generally resets the repayment period; that is, if one refinances six years into a 10 year mortgage, then one generally repays the new mortgage over 10 years instead of the remaining four.
References in periodicals archive ?
Just as telling has been the drop in mortgage financing -- aACAyAround the peak (during Q1-2014) we witnessed a spike in the level of refinanced mortgages
Michael DeVito, executive vice president for default mortgage servicing at Wells Fargo Home Mortgage, noted that the roughly 13,000 completed mortgage modifications and 26,000 refinanced mortgages included in the latest report for the period covering March 2012 through March 2013 represent only a small portion of the total foreclosure-prevention actions and refinance activity done in that period.
However, the Michigan senator reported liabilities between $600,000 to $1,250,000, including refinanced mortgages and a home equity line of credit.
In all of the subrogation cases involving refinanced mortgages, whether there is a due-on-sale clause or not, the junior mortgagee has a legal right to be paid and, by definition, the borrower is in default on his or her obligation to pay.
In 2009 Senate Minority Leader Mitch McConnell proposed providing government backing for bank-issued new or refinanced mortgages at low interest rates.
About 70 percent of the values were refinanced mortgages, the bank said.
Lower scores, in turn, are preventing many homeowners from qualifying for new or refinanced mortgages under toughened underwriting standards imposed by lenders and investors such as Fannie Mae and Freddie Mac.
'Lending criteria tightened while lower interest rates increased the demand for new mortgages and refinanced mortgages. Both have contributed to longer approval times.
The program resulted in very few refinanced mortgages because it had intimidating red tape and eligibility requirements.
The program is designed to enable up to 9 million borrowers to stay in their homes through refinanced mortgages.
He also suggested that homeowners who had refinanced mortgages as fixed interest rates have decreased should refinance again to adjustable rate mortgages.
Mortgage Loans: Although the number of households that are potential targets for mortgage loans is typically smaller than that for home-equity credit, the lower mortgage rates in recent years offer a great opportunity for selling refinanced mortgages by mail.