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Whether Or Not to Refinance Your Mortgage: An Interview with David Leonard of Inlanta Mortage

By David Leonard

Please describe the background of your company and some of your qualifications.

When you need a lender that works as hard as you do, choose Inlanta. When you need a lender that works your hours, choose Inlanta. When you need a lender that offers virtually every loan program available, choose Inlanta. Hi, my name is David Leonard, one of the madisonmortgageguys.com, a loan officer with Inlanta mortgage and I would like to introduce our company and myself to you. Inlanta Mortgage is a mortgage bank in business since 1993 and currently licensed in 16 states. I have been with this office since 2001 and am licensed in three states; Illinois, Minnesota, and Wisconsin.

Inlanta Mortgage offers a full suite of Conventional, Jumbo, FHA, USDA, and VA programs, plus we process, underwrite, and finance all but a few of the loans we offer. Inlanta mortgage remains committed to extraordinary customer care and building long-lasting relationships with our clients. Honest and ethical business practices are the hallmark of our company's culture and a key driver of the success of Inlanta mortgage.

How much equity do I need to have in my home before I consider refinancing?

I would encourage anyone who hasn't refinanced their mortgage in the last couple years because they have little, if any equity in their home or have their home half paid for and feel there would be no benefit to call 2 or 3 qualified mortgage lenders and get a quote. If you have a good portion of your current 30 year mortgage paid down you are in a good position to refinance and shorten your term to a 10 or 15 year mortgage and reduce the interest rate for the balance of your loan. If you brought your home fairly recently or refinanced your home several years ago and withdrew some of your equity when home prices were high you still might qualify for a much lower interest rate. There are mortgages available for people with no equity or are substantially underwater on their current home. This means if you owe more money on your home then it would currently appraise for there might still be a mortgage for you with a lower interest rate with a HARP; Home Affordable Refinance Program; mortgage.

My credit score isn't very high, will this affect my ability to refinance?

Clients who might have had difficulties making timely payments on their current monthly obligations and feel there credit score might not be good enough should call immediately. You need to know where you stand because you might still qualify and if not you need proper direction. Sometimes the difference between qualifying for a much lower interest rate or not might be paying down the balance on one credit card instead of another. We even work with Credit Repair Companies that help negotiate with creditors on a client's behalf getting collections paid and removed from their credit report, consolidating student loans, and correcting mistakes. There is a charge for their services but it's a case of paying a little to save a lot.

What are the main reasons people choose to refinance their mortgage? Is refinancing the best option if I want to lower my monthly payments?

People refinance their mortgage for a number of reasons; lower their interest rate, shorten their term to get their home paid for more quickly, lengthen their term to reduce their monthly payment, to access their equity and withdraw funds to pay down other debt at a higher interest rate, for home improvements, to consolidate debt or to get the Private Mortgage Insurance; PMI; off of their current mortgage. A good loan officer can pull your credit report, make the calculations depending on the situation, and propose several different options for refinancing depending on what's in your best interest, and if it turns out that the benefits don't outweigh the costs to keep what you have.

Can I still refinance if I don't plan on staying in this home for a long time?

For homeowners that don't intend on living in their current residence for more than a few years in most cases it is not in their best interest to refinance their home. But they should talk to a loan officer or financial advisor to crunch the numbers for them so they can make an informed decision. You need to know at what time the benefit will outweigh the cost of refinancing.

Can I still refinance if I have a second mortgage?

If someone currently has a first mortgage and second mortgage or Home Equity Line Of Credit; HELOC; which is at or near its limit they should inquire now to see if both mortgages can be joined together into one first mortgage. The interest rate on a second mortgage is always higher than the interest rate on a first mortgage and even though the interest rate on a HELOC might currently be low, they are Adjustable Rate Mortgages that in most cases are only going to go in one direction and that's up. Now I've heard the argument that if I join the two I could have Private Mortgage Insurance; PMI; on my mortgage, that is correct, but on a Conventional Mortgage PMI drops off when you pay the mortgage down below 80% LTV, if enough is owed on the second ,and it's at a higher interest rate that is like paying PMI for the life of the loan. Again it's best to have the figures in front of you so you can make an informed decision. If there isn't enough equity in the home to join the two mortgages together in most cases the first mortgage can be refinanced if the mortgage was sold to Fannie Mae or Freddie Mac prior to May 31, 2009.

How can home mortgage refinancing affect my financial situation in retirement?

When someone gets close to retirement that is the time, while you are still working, to get your mortgage payment in line with your income. In retirement and your income is fixed and refinancing a home can be more difficult especially if you are trying to take money out. A Reverse Mortgage is an option if both borrowers are over the age of 62 but homeowners do need to have substantial equity in their home, at least 40%, to obtain a reverse mortgage. With a Reverse Mortgage instead of paying a monthly mortgage payment, that includes principal and interest, the interest on your mortgage is added to what you owe each month until you sell the home, passed away, or vacates the home for over 12 months.

What are the risks associated with refinancing my home?

There shouldn't be any risk when refinancing your home; you should work with someone that always has your best interest in mind.

What is the best way for people to get in contact with you?

If you live in Illinois, Minnesota, or Wisconsin and would like for me to calculate what you might $ave by refinancing your home I would be more than glad to sharpen my pencil and go to work for you. Feel free to call me, David Leonard, at 877 ? 240 ? 5810 or email me at davidleonard@inlanta.com. And if you or anybody you know once any information on just about every mortgage program available please visit us at: www.madisonmortgageguys.com.

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About The Author

With twelve years in the financial services industry, David Leonard is one of Inlanta...

Phone: 608-662-0860

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