The Metro Atlanta mortgage refinancing market has enjoyed months of near-record low interest rates. The rates have stayed so low for so long that many borrowers assumed home mortgage interest rates will be low “forever.” And for good reason. At the first sign of rising interest rates – regardless of how slight the expected increase – the global money markets seemed to force them downward again. Even the rumblings of a Federal Reserve increase in fed funds rates did little to change the feelings of some borrowers who watched mortgage rates remain low throughout the peak home buying months.

The majority of borrowers refinanced in the past year or so while interest rates were low. Surprisingly, however, more than 10% of borrowers throughout the nation have yet to refinance. Of the ones who haven’t refinanced their mortgages, most have home loans with rates at 5% or higher. The average rate of those borrowers in the Metro Atlanta mortgage refinancing arena who have actually refinanced is roughly 3.5%.

For technicality’s sake, experts say almost 25% of borrowers have mortgages with rates higher than 5%, but many of those homeowners cannot refinance their loans. According to CoreLogic here are the reasons why they haven’t – or are unable to – refinance to save money. For one thing, roughly half of the existing mortgages with higher rates that haven’t been refinanced are delinquent or have experienced a delinquency during the loan period. Because of that, most lenders consider the risk of granting them a new mortgage – even at a lower interest rate – too high.

In addition, existing mortgages held as part of private-label securities portfolios are generally more difficult to refinance than government-backed loans. As a result of the changes made in the aftermath of the housing crash of nearly a decade ago, the U.S. government offered refinance programs designed to be more streamlined. Those programs included a large number of borrowers who were underwater at the time – borrowers who owed more on their homes than they were worth. Again, to be technical the resulting share of borrowers not taking advantage of the interest savings is roughly 13%. Why haven’t that 13% refinanced when they could have? Let’s take a quick look.

The reluctance of the rest of the 13% of borrowers that haven’t refinanced is likely due to the remaining balance on their higher-rate mortgages. A CoreLogic spokesperson speculated that “small balances may not be worth refinancing… the savings would be too low.” And the speculation is probably spot on. Consider this: CoreLogic found that borrowers eligible to refinance with old rates above 7% have an average remaining mortgage balance of only $53,000. Borrowers with rates between 5%-7% had roughly $100,000 remaining on their principal balance. With the closing costs involved in a refinance – even with an existing lender – the question those borrowers need to ask themselves is, “Would refinancing a relatively low balance save me any money?” Closing costs for a refinance can often run 2%-3% of the loan amount, depending on whether points are involved. Let’s take a look and see if the savings are worth the effort.

The quick answer is, it depends on the original mortgage amount. For example, a borrower with an original loan balance of $400,000 can reduce his monthly mortgage payment substantially since the original payment was much higher. If that borrower is refinancing a $100,000 remaining balance, the closing costs are going to be comparatively lower. Conversely, a borrower with an original loan amount of $150,000 who currently owes $75,000 won't enjoy a significant savings on the remaining amount of interest – especially after factoring in the closing costs. In addition, many borrowers simply don't like the idea of extending the term of their loan. A borrower who’s 12 years into an original 15-year mortgage may just want to pay it off as planned instead of recasting the loan term to another 15-year term by refinancing.

As usual, each case is different, so it’s a good idea to talk to a Metro Atlanta mortgage refinancing professional. Here’s why:

Your mortgage lender can provide you with the remaining balance on your existing mortgage at the original interest rate. In turn, using the original amortization schedule – updated to reflect any principal only payments – the lender can estimate the amount of interest you’ll pay over the remaining life of the loan. Naturally, the calculation is based on the assumption that you won’t pay off or otherwise alter the loan's principle balance. Then, using current interest rates, the lender will determine what a typical refinance will cost in terms of monthly payment versus your existing mortgage payment. The interest portion of the payment when amortized over the new term will give the lender the total amount of interest you’d pay if you refinanced – again, barring any future changes to the principal amount. By simply comparing those two amounts, the lender can determine the interest cost savings. However, that’s not the end of the analysis. As mentioned, the costs of closing the loan have to be figured into the equation to determine the net savings, if any.

Closing costs, though not as high as on a new loan origination to purchase a home, can still be substantial. Though it may seem unnecessary, the lender is required to ensure the home's value is sufficient for the loan amount to be granted. Therefore, either a new appraisal (or, in some cases, an update to the existing appraisal) is required. In addition, you can expect to pay a loan origination fee and an updated title search fee. A new credit report and normal court recording costs will also be required. You may have to pay for an updated termite inspection and a home inspection. After all those costs are taken into consideration, then and only then can your Metro Atlanta mortgage refinancing lender give you an estimate on the cost savings to refinance and an opinion as to whether it makes financial sense. From there, only you can make the decision.

You can find more articles pertaining to Metro Atlanta mortgage refinancing and the overall mortgage market in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post daily tips, many of them related to Metro Atlanta mortgages, on Facebook and Twitter and would love for you to follow us there, too.

Technology and the digital age has certainly made an impact on the Metro Atlanta mortgage business. While roughly 90% of prospective homeowners search online for a home, less than 10% of mortgage lenders offer a comprehensive digital mortgage experience.  Now, mortgage lenders are starting to enter the 21st Century by gradually reinventing the mortgage process. Here are some ways in which important improvements are occurring.

Metro Atlanta Mortgage Business – Ushering in Technology

Some mortgage lenders still subject their prospective borrowers to the golden age of copiers, scanners and faxes to assemble and deliver loan application information and financial paperwork. And while the Metro Atlanta mortgage business has largely been overlooked when it comes to technological advances, it does appear that is changing. Here are the top five ways technology is changing the home mortgage lending process for lending institutions and borrowers.

A better borrower experience.The mortgage lending process from application to closing is, by its very nature, information driven. Some loan files can exceed 500 pages. In an effort to save time, much of the information required by lenders in the Metro Atlanta mortgage business is available digitally, and applicants can provided bank account information, tax forms and pay stubs online. This not only streamlines the application process for homebuyers, but it also makes the collection and verification steps easier for the lending institution. Since the financial data is independently verified from its source, mortgage lenders are able to more readily confirm that the information is accurate and current, thus saving time in their review and analysis.

In addition, some financial technology companies are offering mobile experiences for prospective borrowers. The mobile apps give the borrowers unique access to the mortgage lending process. The accessibility enables borrowers to stay on top of their documentation needs and requirements, ultimately giving them a better, more satisfying user experience.

Increased transparency. Since applicants don’t have access to their mortgage lenders’ internal systems, they rarely know where they stand during the loan application process. They are then forced to rely on the loan officers to communicate various requirements or updates via phone or email. Some innovative Metro Atlanta mortgage lenders are now providing information portals for prospective borrowers to be able to see the same information the loan officers do. This improvement in transparency allows borrowers to obtain a complete list of required documentation ahead of time – and to know where they stand with respect to any additional information required. This innovation enables both parties to work together for the common goal of assembling the information in order to get the loan approved and closed in a timely manner.

Making the mortgage process painless. A normal turnaround time for a borrower to receive an underwritten loan approval from a mortgage lender is about 18 days. Overall, it could take roughly 50 days to complete the loan process. Comparatively speaking, in a totally digital world where online shoppers can order an item and get it overnight, 50 days seems like forever.

Technology is helping introduce the mortgage lending process to the modern world. Using a workable combination of intuitive design and direct connectivity, loan applicants are now able to contribute to the process and receive up-to-date assistance from the lending institutions. This makes the borrowers more in control of their own destiny, as well as participating in more of a “team approach” to getting their loan approved.

Digital compliance. Following the housing crash of less than a decade ago, federal regulations required lenders to follow certain lending practices and give their borrowers more disclosure information early in the mortgage loan process. The regulations are designed to allow mortgage lenders to adhere to strict guidelines while limiting negative impact on the borrower experience.

New developments in technology have enabled lenders to automatically send the production and delivery of electronic disclosure information at certain points in time during the mortgage application process. In addition, the natural creation of a digital “paper trail” for audibility and accountability is an offshoot of the new technology.

Money-saving advantages. It’s estimated that it costs around $8,000 for a lender to complete a mortgage from start to finish. Much of that cost is for employees to perform routine, manual tasks such as translating required documentation into email form, as well as the physical tracking of various items on paper documents and forms. In turn, such work inefficiencies are passed through to the borrowers by way of higher fees and other processing or closing costs. Using modern technology can automate manual work and reduce these costs. In addition, lenders are able to increase their efficiency and productivity – passing the cost savings on to their customers.

The advent of workable technological advances in the Metro Atlanta mortgage business creates faster and more simplified lending interactions. Best of all, the digital “revolution” will likely continue to impact the mortgage industry and improve the borrower experience. While mortgage lending will probably never be a “one-click” process, it can continue to be better, faster and less costly. When you stop and think about it, the digital world has basically spoiled us all. We want – and often expect – goods and services almost immediately. From the digital delivery to a movie or television program on demand, to the ease of online banking, our society has come to expect speed and convenience. It’s only natural that we’d expect the same speed and delivery of improvements in the Metro Atlanta mortgage business. In addition, mortgage lenders want it, too. That’s why we will continue to anticipate and expect further advances that will make the home buying and home financing process a better experience for all parties involved.

You can find more articles pertaining to the Metro Atlanta mortgage business in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to the Metro Atlanta mortgage business, on Facebook and Twitter and would love for you to follow us there as well.

Metro Atlanta mortgage lenders are anxiously awaiting revisions to the “Know Before You Owe” mortgage disclosure rules. The Consumer Financial Protection Bureau (CFPB) – acting on a promise made this past April – recently released updates to the rules in response to the mortgage industry’s requests for better clarity on the regulations. However, there are still nagging concerns regarding the secondary market, and those concerns will inevitably affect mortgage lenders’ ability to make loans that may not qualify for sale. Here’s a closer look at Know Before You Owe and what it means to the Metro Atlanta mortgage market.

Metro Atlanta Mortgage Lenders See Challenges Ahead?

The Know Before You Owe mortgage disclosure rule (also called the TILA-RESPA Integrated Disclosures rule) went into effect in early October 2015. Almost immediately there were serious concerns about how long it would take to close mortgage loans – causing a domino effect of problems for borrowers whose contracts called for timely closings.

While most of the initial wave of problems have been solved, one remaining issue has continued to plague mortgage lenders. The secondary market – where many lenders package and sell their mortgage loan investments to third-party investors, including government entities like Fannie Mae and Freddie Mac – is still experiencing issues with TILA-RESPA. In addition to the addressed changes to the rules below, the industry, at least for the time being, will be required to follow the original intent the CFPB issued saying, “examiners will be squarely focused on whether companies have made good faith efforts to come into compliance with the rule.”

The changes made by the CFPB include the following:

Tolerances for the total of payments.  Prior to the enactment of the Know Before you Owe mortgage disclosure rule, the total of payments calculation and disclosure was arrived at by using the finance charge as part of the equation. The rule amended the total of payments calculation so that it didn’t make specific use of the finance charge. The CFPB now proposes to add tolerance provisions for the total of payments that are similar to tolerances in place for the finance charge and all disclosures affected by the finance charge.

The result?  The change makes the treatment and disclosure of the total of payments consistent with how it was shown before the Know Before You Owe mortgage disclosure rule was enacted.

Housing assistance lending.  The initial rule allowed a partial exemption from the disclosure requirements to some housing assistance loans that were originated primarily by housing finance agencies. The CFPB issued an update that would promote housing assistance lending by stating that certain recording fees and transfer taxes can be charged as a result of transactions while ensuring the partial exemption eligibility would still be in place.

The result?  More housing assistance loans will likely qualify for the partial exemption. That, in turn, will probably encourage mortgage lenders to work more closely with housing finance agencies to fund these type loans.

Cooperatives.  The CFPB proposes to have the rule’s coverage include all cooperative (co-op) units. In a cooperative, the purchaser becomes a shareholder in the corporation that owns the property. The buyer, by virtue of being a shareholder, is allowed exclusive use of a housing unit in that property. As it stands now, the disclosure rule covers only those transactions secured by real property. Real property is defined in individual states’ laws. As such, cooperatives are sometimes considered personal property and sometimes considered real property.

The result?  The CFPB plans to simplify compliance by including all cooperatives in the disclosure rule.

Sharing information and privacy.  The existing disclosure rule requires that creditors provide mortgage disclosures to the consumer. The CFPB has come under criticism and has received numerous questions regarding sharing the consumer disclosures with third parties to the transaction – including real estate brokers and sellers. The CFPB has decided it’s appropriate for creditors and others involved in the transaction to receive the closing disclosure.

The result?  The CFPB is working on a separate disclosure form to the consumer and the seller to rectify what has been deemed a problem.

Metro Atlanta mortgage lenders in conjunction with the Mortgage Bankers Association (MBA) have expressed their appreciation in the CFPB’s efforts to update various parts of Know Before You Owe. MBA president and CEO David Stevens said the “regulation has a big impact on both borrowers and lenders, so it’s important that the Bureau and stakeholders continually reassess the implementation process to ensure its effectiveness. We look forward to commenting on the rule, and continuing to work with the CFPB to gain further clarity in order to improve this and other rules and regulations.”

In addition, the National Association of Federal Credit Unions (NAFCU), while appreciative of the DFPB revisiting the disclosure rule, remains concerned that the changes may not be as far reaching as they need to be. The NAFCU feels the CFPB hasn’t fully addressed the many compliance issues expressed by credit unions.

The CFPB has encouraged a wide range of input from its stakeholders – including Metro Atlanta mortgage lenders – and has invited public input on their proposal. Comments and information submissions are due in mid-October and will be thoroughly considered prior to final regulations issued.

What this may ultimately mean to the mortgage lending industry is this. In the absence of greater clarification on issues that are pertinent to the entities to which lenders sell their mortgage originations on the secondary market, some lenders will either choose to limit the number of loans they sell, or restrict their lending activity to only those loans that are easily marketable. Examples would be loans with lower LTV ratios or loans made to borrowers with excellent credit scores and high net worths.

However, most Metro Atlanta mortgage lenders remain confident the changes the CFPB will be sufficient enough to solve the nagging questions that currently remain regarding the secondary market. If that is indeed the case, the mortgage market will likely not be adversely affected.

You can find more articles pertaining to Metro Atlanta mortgage lenders and the mortgage market in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to the Metro Atlanta mortgage market, on Facebook and Twitter and would love for you to follow us there as well.

The Metro Atlanta mortgage market is abuzz with talk about refinancing. With 30-year fixed rates approaching all-time historical lows many economists say this could be the best time ever to refinance your mortgage – even if it’s only a few years old with what was a great interest rate at the time. Recent turmoil over Great Britain’s departure from the European Union caused stock markets around the globe to nosedive. When the stock market is weak, interest rates generally stay low. As one analyst put it, “Financial turmoil can be awfully good for mortgage rates.” Let’s examine why it may be a good time to refinance and where Metro Atlanta mortgage rates may go from here.

Metro Atlanta Mortgage Activity: It’s All About Refis

Uncertainty in the market is causing investors to sell off their riskier global stocks in favor of safer U.S. mortgage bonds. Mortgage bonds are considered among the the most secure in the world market because they’re made up of home loans made in the U.S. following the most stringent guidelines in decades. When the bond prices go up, the bond yields or rates go down. When this occurs, it’s usually a good time to take a look at your mortgage and consider refinancing.

As an example, just a slight rate decrease of .25% would decrease your monthly payment by $42 on a $300,0000 mortgage.

While Metro Atlanta mortgage interest rates have been low for several years, many homeowners have recently gained a great deal of home equity, thanks to fast-rising home values. Not only are they eligible to refinance, but they may choose to access some of their new-found equity. The mortgage market may very well have a refinance boom similar to that from 2008-2014, when roughly 25 million borrowers refinanced their mortgages, according to a new report from the Urban Institute.

If you’re thinking of refinancing – and we think you should be – here are a few tips we recommend.

Make sure your mortgage lender is quoting you the correct rate. Rate quotes are dependent on your loan closing and finalizing in a certain number of days. If you need a longer rate lock period you’ll likely pay a higher interest rate. Should you find a rate quote that’s lower as you’re shopping around, ask the lender about their rate lock time period. Make sure they are able to close your loan within that timeframe.

Confirm the timing. As more people elect to refinance, Metro Atlanta mortgage lenders will get very busy. Ask your lender for confirmation that they’re giving you a rate quote that gives them enough time to close your refinanced mortgage. If they can’t do that, find another lender.

Remember your second mortgage (if you have one.) If you have a second mortgage on your home – even if it’s a Home Equity Line of Credit (HELOC) – the second mortgagee has to agree to the terms of the new first mortgage before you can close the refinance.

Prepare your documentation again. It may sound crazy, but even if you’re refinancing with your existing lender, the federal regulations require them to verify and update employment, income, asset and debt information all over again. So be prepared to go through pretty much the same process you did when you took our the previous mortgage loan.

What About Metro Atlanta Mortgage Costs?

You should make a point to discuss the break even point of refinancing with your Metro Atlanta mortgage lender. Refinancing usually costs between $2,000 – $4,000 depending on your market and the lender you choose. Typically, interest cost savings as a result of a refi should mean your break even point would be sometime between 2-3 years. Another tip to remember: a “no cost” refinance isn’t really free of any costs. The borrower is being given a slightly higher rate in order for your lender to, in effect, finance the closing costs. Ask your lender to help you with cost comparison analyses to find out what your costs are compared to what your interest rate savings will be. If you’re planning to sell your home sooner than the 2-3 year average break even period, you may want to rethink your refinancing plans.

Although yields on the 10-year Treasury bonds – which Metro Atlanta mortgage interest rates follow somewhat – will need to remain low for a while before mortgage rates drop markedly lower, it’s definitely worth watching rate activity and planning for a potential refinance.

Whether you ultimately elect to refinance your current mortgage or not, mortgage experts suggest you weigh your options carefully. If rates do continue to drop, they could possibly drop even more. Decide what rate you can best be satisfied with. Many times in falling rate markets, prospective borrowers keep waiting and waiting for rates to go lower. Then, when they begin to rise, an unprepared borrower may actually end up paying slightly more than he could have if he had acted quicker. Our suggestion: don’t be greedy. If you like the new interest rates once they fall – if they do – then refinance. If you’ve done your homework, you’ll still save money in the long run.

You can find more articles pertaining to the Metro Atlanta mortgage market in the Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to the Metro Atlanta mortgage market, on Facebook and Twitter and would love for you to follow us there as well.

Metro Atlanta mortgage holders agree, a mortgage is probably the single largest financial obligation most American homeowners will ever assume. Unlike personal loans, car loans or other consumer loans, the interest rate on a home mortgage loan can add up to a substantial amount over the life of the loan. Conversely, the lower your mortgage interest rate, the more you can save over time. For example, on a mortgage loan amount of $250,000, half a percentage point (.5%) can represent a $23,427 difference in the interest amount paid for the life of a 30-year fixed-rate loan.

Metro Atlanta Mortgage Search: Rating Rates

In today's digital lending environment, most mortgage lending institutions have made it easy and convenient for borrowers to go online to get information on interest rates, different loan programs and answers to their money questions. Of course, you may still want or need to work with a mortgage broker to assist you in the borrowing process. This is especially true if you have credit concerns, blemishes, bad credit or non-standard sources of income. Most mortgage brokers can offer options available with different lenders to find the best product and service for your specific financial situation. Plus, brokers are often able to find the best interest rates because they search a variety of sources on your behalf.

So, how do you get the lowest interest rate on the Metro Atlanta mortgage that best meets your needs? Consider these tips from seasoned mortgage brokers.

Tie up any loose ends on your personal finances.
Cleaning up your financial situation prior to applying for a mortgage will help you find a lower interest rate. If your credit score needs a little boost, plan ahead to raise your score by paying your monthly obligations promptly when due, avoiding adding new debt or additional credit accounts, and periodically checking your credit. By checking your credit report on a regular basis, you can better manage or correct any errors that may appear. It's better to address them ahead of time rather than dealing with them during the loan application process.

When it comes time to figure out how much money you qualify to borrow, the mortgage brokers offer this advice. Mortgage lenders analyze your debt-to-income ratio by calculating the relationship of your total liabilities to your gross income. So, brokers suggest, lower the amount of debt you owe by paying down or paying off credit cards, student loans, or other consumer debt to be able to afford a higher priced home. The normal accepted debt-to-income ratio for qualified borrowers is a maximum of 43%. In other words, your total monthly obligations –including the PITI payment you're seeking – should not exceed 43% of your gross monthly income.

In addition, it's important for borrowers to fully understand the relationship between their overall mortgage qualifications and the resulting mortgage interest rate and terms. Among the qualifications are income, job history and stability, other available assets, liabilities, credit score, and source of down payment. Borrowers with good qualifications are likely to enjoy the lowest interest rates available in the Metro Atlanta mortgage market. Those borrowers are considered by lenders as prime customers based on their ability to repay the debt, and are rewarded with the best rates and terms.

Make the best choice on rate type.
One important decision that most borrowers face is whether to obtain a fixed-rate loan or an adjustable rate mortgage (ARM.) While fixed-rate mortgage loans – as the name implies – have a locked-in interest rate during the life of the loan, an ARM starts with a fixed rate period that typically is lower, but after the prescribed period the rate can vary based on market volatility. The interest rate could increase or decrease.

Both loan types have their advantages and disadvantages. The low cost of ARMs offers a degree of appeal during the initial period, yet because the rates can increase it can make some borrowers uneasy. Fixed-rate loans offer greater rate peace of mind, but can be more expensive in the long run. Usually the deciding factor, according to mortgage brokers, is the length of time the borrower plans to stay in the home. If a borrower plans to own the home for a period of, say, 5-7 years, an ARM may be the best choice. For a borrower planning to stay in the home for a longer period, a fixed-rate loan could better suit his needs.

Consider the term of the loan.
The term of the mortgage loan is also a key component in affordability and in obtaining a lower interest rate. The shorter the loan term, the lower the interest rate. However, with the shorter term and lower rate comes higher monthly payments. For borrowers contemplating a shorter term with higher payments, consider this. If you have a personal financial emergency and are already near or at the maximum payment for which you qualify, the emergency may temporarily impact your ability to repay. Most mortgage experts recommend taking the longer term and – as additional finances permit – make additional principal payments. That way, the loan will be paid down as if it had a shorter term. Simply put, you can always pay down the loan and even pay it off ahead of schedule, but unless you refinance the entire mortgage, you won't be able to reduce your payments once you sign the promissory note.

You can find a lot more Metro Atlanta mortgage information in our Atlanta Mortgage Info section of articles to your right just below the Atlanta Real Estate Categories. We also constantly update mortgage news on Twitter and Facebook. We hope you'll check us out there, too.

The Metro Atlanta mortgage lending market experienced something unusual in the past sixty days. The Federal Reserve raised the interest rate back in December 2015. Since that time, mortgage interest rates have dropped to their lowest level in three years! Most economists and mortgage lenders pointed out at the time that an increase in the Fed Funds rate wouldn’t necessarily translate to an increase in mortgage rates. However, few saw the resulting lowering of mortgage rates in their crystal balls.

Metro Atlanta Mortgage Rates: Time to Refinance?

Mortgage interest rates usually drop when volatility fueled by uncertainty in the stock market makes investors sell their higher-risk stocks in favor of buying safer bonds. When bond prices move higher as a result of the brisk buying, the yield on those bonds go down. A quick look at the stock market over the first 45-50 days of this year shows exactly what’s happened. Investments in U.S. Treasury bonds and mortgage bonds have been strong – for the time being.

In December 2015, fixed rates on 30-year conventional conforming loans were roughly 4%. Due to increasing bond trades, interest rates on this and other mortgage products have dropped as much as .5%. To better put that in perspective, a half-point interest rate reduction can significantly reduce monthly payments. It results in an $85 savings per month on a $300,000 Metro Atlanta mortgage, $170 per month on a $600,000 mortgage and a $900,000 mortgage payment will be reduced by $253.

As if these savings weren’t reason enough to consider refinancing, according to some analysts it’s possible that rates could fall even lower over the next several months. But there’s more to refinances than just interest rates. Other factors come into play like income and assets, property eligibility, and home equity. In the past, specifically in other post-housing crisis interest rate drops, some homeowners were unable to refinance. Many people were underwater with their mortgages – they owed more than their home was worth. In addition, other problems contributed to their inability to refinance such as income instability, slow credit and changing lending policies and guidelines.

In today’s Metro Atlanta mortgage environment, refinances are more prevalent. Home prices have either leveled off or are still increasing, unemployment has dropped and income growth is on the upswing. In addition, cheap oil prices have helped keep inflation low, and mortgage lending guidelines are more flexible than during any previous post-crisis rate reduction. All these reasons and more make it easier, more conducive and a smarter move to refinance than perhaps ever before.

Let’s take a look at the reasons home owners refinance. First and foremost, of course, is to lower their interest rate, which lowers the monthly mortgage payment. However, there are other reasons to take into consideration when you’re contemplating refinancing.

Reduction of loan payoff term.
Borrowers looking to reduce the length of time they have to pay on their mortgage should consider refinancing a 30-year loan to a 15-year loan. Naturally, a shorter term loan carries with it higher payments – though the interest rate is usually lower. With today’s even lower interest rates, it may be surprising at how affordable a 15-year loan term can be.

Cash accessibility.
As your home equity builds over time and as a result of higher home values, the nest egg your home represents can be substantial. A “cash out” refinance can give you access to your home’s equity to do with it as you wish. Many homeowners refinance their Metro Atlanta mortgages to make investments, purchase additional real estate, pay for college expenses for their children, or make home improvements.

Debt consolidation.
For qualified borrowers, non-housing related debt can be included into a home refinance. These debts could include auto loans, credit card debt, student loans and other consumer debt. Debt consolidation can help improve a credit score by showing that certain accounts have been paid in full. In addition, by rolling existing debt into a mortgage the borrower is able to deduct that additional interest, converting non-tax-deductible debt into tax-deductible debt.

Elimination of mortgage insurance or cancellation of a second mortgage.
Homeowners who purchased homes with a mortgage with less than a 20% down payment were probably required to carry mortgage insurance. Mortgage insurance protects the lender from the borrower defaulting on the mortgage loan payments. If the home’s value has appreciated enough to where the loan-to-value ratio (LTV) is 80% or less, a borrower can refinance the mortgage and eliminate the mortgage insurance requirement. For borrowers who have a second mortgage on their homes, refinancing is an excellent way to combine both the first and second mortgages into a new first mortgage.

Now that you know the reasons homeowners typically refinance, let’s examine the steps in the actual process itself.

Decide on a Metro Atlanta mortgage lender.
While your existing lender may be a good place to start, there are a variety of lenders offering similar interest rates and refinancing options. Choose the one that best fits your needs. Most rate quotes are based on a refinance being closed within 30-45 days. If you need to lock in your interest rate for a longer time period before you close, you can expect the rate to be slightly higher. Therefore, it’s important to get your lender the needed documentation and paperwork as soon as possible.

Assemble the documentation.
When it comes to documentation, a refinance is really no different than a purchase money mortgage. Federal lending regulations require that mortgage lenders have current employment and income verification, asset and liability statements and an updated credit report.

Appraise your home.
There are two parts to the refinance equation: one is the borrower, the other is the collateral on which the mortgage is made. Of course, the borrower must qualify, but the home has to, too. Your Metro Atlanta mortgage lender will require an appraisal to determine the value of your home. They then use that appraisal amount to decide whether the loan amount you’re seeking is within their guidelines concerning the LTV ratios for refinances.

Closing costs.
Refinancing is always an exercise in comparing the total payment savings against the costs of closing the loan. While closing costs vary according to loan size and lending market, they typically range from $2,500-$4,000. If you paid to refinance and rates dropped lower you’d risk losing money. Enter the no-cost refinance.

A no-cost refinance carries with it a rate that is slightly higher. If rates dropped, however, you wouldn’t be wasting money if you elected to refinance at the new lower rate. Discuss this option with your lender and see if it’s right for you.

Lock in your interest rate.
Work with a lender that will pre-approve you for the refinance. That way, you can be assured you’re being locked into a program and a timeline your lender can meet. Plus, once pre-approved, it’s easier to lock in a rate when they may fluctuate day to day.

Because rates change almost daily, if rates drop after you agree to your rate lock, most lenders have policies allowing you to renegotiate to the lower rate prior to closing.

We have a lot more Metro Atlanta mortgage information for you in our Atlanta Mortgage Info section of articles to your right just below our Atlanta Real Estate Categories. We also update the mortgage situation constantly on Twitter and Facebook. Check us out there as well.

Metro Atlanta homeowners are enjoying higher home values and are using their equity to take cash out of their properties by refinancing. Surprisingly, however, they are doing it conservatively –– more than any other time in recent history. A closer look reveals why that may be the case.

"Take Only What You Need" – Metro Atlanta Homeowners

In earlier times, such as the years leading up to the housing crash in 2008, homeowners regularly used their properties like ATM machines, taking as much cash out as their lenders would legally allow. With values inflated and equity almost non-existent, the amount they refinanced for was high compared to the home's worth. That and other actions led to millions of American homeowners being "upside down" or "underwater" on their mortgages. Ultimately more than 7 million homes ended up in foreclosure.

Since then, lending practices have been shored up dramatically to safeguard against the same thing happening again. In addition, today's borrowers are considerably more risk conscious – and are slower to add debt they don't need. Homeowners are still borrowing against their equity, with 42% of refinances in 2015 being for the purpose of taking cash out, not just refinancing to get a lower interest rate.

For most recent refinances, the average cash-out amount was slightly more than $60,000 and the average LTV ratio was 67%, the lowest level in history. The total amount of equity received through refinances in 2015 topped the $64 billion mark, the highest amount for any 12-month period since 2008-2009. Despite the record amount, homeowners showed remarkable fiscal restraint by not tapping into the remaining equity.

Economists say consumers are saving more now than they did during the years immediately after the housing crash. According to the Commerce Department, the savings rate in December 2015 climbed to the highest level in over three years. In addition, the borrowers refinancing to get cash enjoyed an average credit score of 748 – high for homeowners seeking refinances. This reinforces the position of mortgage lenders being risk-averse, but it's also a sign borrowers are taking only what they need. Simply put, they're leaving money on the table.

While Metro Atlanta homeowners still have most of their equity intact, they seem to be just fine with that. The memories of financial crises like the housing crash or even the Great Depression has had a lasting, memorable effect on a generation who vows not to go through it again. Plus, since interest rates on savings accounts have been so low, many baby boomers are staring at retirement wondering how they'll manage. Other workers of all ages have learned to look at their finances more cautiously. They've seen high unemployment, and they know the horrors of losing a home to foreclosure.

As a result, Metro Atlanta homeowners in today's economy take out only what they need when they refinance or get home equity loans. They begin paying it back almost immediately every month. For home equity loans, some banks require amortized payments, but not all do.

Borrowers typically are using their cash equity for home improvements, college tuition and rising health care costs. This is in stark contrast to the borrowers of just a decade ago, when home equity was used to purchase luxury items like boats, RVs, vacations and other extravagances.

We have a lot more mortgage related tips and information for you here.. just click on the Atlanta Mortgage Info section of articles below Atlanta Real Estate Categories to your right. We also post mortgage related information frequently on Facebook and Twitter. Be sure to find us there as well.

If you have a Metro Atlanta mortgage and didn't make at least a 20% down payment, you probably have private mortgage insurance (PMI.) PMI protects the lender if the borrower is unable to make the mortgage payments. Because PMI premiums are paid monthly in the mortgage payments, they can add up. So, how can you avoid PMI or drop it later?

Avoid Metro Atlanta Mortgage Insurance

The first way is easier said than done. To avoid PMI make sure you borrow 80% or less of the home's value. In other words, put 20% down when you purchase. Some people – even if they have the money – are hesitant to wipe out their savings or spend the money they were planning to use to make improvements to their new purchase.

Sometimes, your mortgage lender will pay the PMI for you. Lender-paid PMI involves the Metro Atlanta mortgage lender paying for the insurance in exchange for a slightly higher interest rate. The lender pays the PMI company directly, while the borrower "repays" the premium in higher monthly principal and interest payments. Many homeowners like that because they can deduct all the interest paid, while the PMI premiums are not deductible. One word of caution, however: while you can request the mortgage insurance requirement be dropped in time, the higher interest rate will remain until you sell the home, pay off the mortgage or refinance.

Lenders are required by the Homeowners Protection Act to remove PMI once the mortgage loan balance has dropped to 80% or less of the home's original sales price. That could take a while, but there's a way to remove it more quickly. By watching the marketplace you can get an idea of your home's value. As your home appreciates, the remaining loan amount you owe is a lower percentage of your home's new value. This ratio – called the loan-to-value ratio, or LTV – will over time be at or less than 80%. When that happens, request that your lender drop the PMI requirement.

For documentation, your lender may require an updated appraisal of your home and will require you to pay for it. But remember, only approach your lender when you're confident your home's value qualifies for the 80% or lower LTV. Consult a real estate agent or use the Internet to monitor comparable homes in your neighborhood. An appraisal will probably cost $300-$500, so make sure you qualify to remove the PMI before you contact your Metro Atlanta mortgage lender. Lastly, some lenders require the borrower to keep the PMI coverage for a minimum of two years. Check with your lender to find out what they require.

Sometimes, simply asking your lender to do away with PMI won't work. An FHA loan, for example, requires PMI for the entire loan term. In that case, you'll need to refinance – either with a non-PMI required FHA loan or a conventional loan. However, be smart. Refinancing just to get rid of the PMI insurance premium probably isn't a good idea since closing costs aren't cheap. It may cost more out of pocket than it's worth. Consider refinancing only if it makes good financial sense.

Get more mortgage tips and information in our Atlanta Mortgage Info section of articles to your right just below Atlanta Real Estate Categories. And check us out on Facebook and Twitter as well.

Metro Atlanta mortgage experts say 2016 may bring greater borrowing opportunities for homebuyers. Although you still have to qualify for the amount you want to borrow, more lenders are reporting a loosening of credit standards. Fannie Mae says loan underwriting is expected to ease in the near future. Let's examine why this may be the case and what the effect may be.

Metro Atlanta Mortgage Industry to Aid Housing

Relaxed credit requirements will likely help the housing market. Tight credit standards and a short supply of affordable homes for sale have been cited as reasons for the housing market's slow recovery. In a recent survey of Fannie Mae lenders, 16% said they expect a relaxation of credit standards in 2016. Lenders expecting a tightening of standards dropped to 2%. The survey was conducted by Fannie Mae and represented a cross-section of nearly 200 lending institutions.

While credit may improve, affordability for first-time home buyers will remain a challenge. With the number of starter homes on the market, home price appreciation is still higher than growth in household income. However, the easing of credit standards should provide some assistance to offset affordability.

As the prospect of rising interest rates looms in 2016, many lenders expect more competition. This may persuade them to ease some of the lending safeguards added after the last housing crash. Fannie Mae, Freddie Mac and the FHA have all worked to clarify lender liabilities for bad loans. They have been pushing hard for lenders to ease their credit practices to help the housing market recover.

In addition, Fannie Mae recently announced a new credit scoring program. Dubbed "trended data," the scoring model shows a broader review of the credit history of borrowers. That should improve the credit scores of some home purchasers. According to a recent study by TransUnion, trended data would increase the percentage of borrowers in the "super prime risk" tier from 12% to 21%. Those borrowers would get better access to new mortgage loans at the best rates.

Despite the potential relaxation in credit standards, a recent survey by the National Association of Realtors revealed roughly 66% of consumers perceive mortgages as "somewhat difficult" or "very difficult" to obtain in today's market.

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The Metro Atlanta home buying market may feel the effects of the Federal Reserve’s recent decision to raise interest rates… or not. The Fed increased the rate on federal funds for banks by .25%, the first such increase in over seven years. What does that mean for people contemplating purchasing a home?

Metro Atlanta Home Buying: What's Next?

As part of an overall strategy to allow the market to recover from the 2008 housing crash, the Federal Reserve purposely kept interest rates low.

For months new home buyers have anticipated a rate increase. That’s given many an incentive to buy or refinance existing mortgages before rates went up. However, a slight interest rate increase isn’t likely to deter buyers from continuing to shop for homes. If anything, it may continue to make them aware that interest rates could be on the rise and now is the time to buy.

The increase in the Federal Reserve rate won’t affect you all that much. There’s little correlation between the Fed’s interest rate and mortgage interest rates. Economists argue that rates on new mortgages have fluctuated throughout the entire year without any change in the Federal Reserve’s policy until recently. They cite, for example, a movement of 70 basis points (.70%) in the 30-year fixed rate mortgage loan category during 2015.

Higher rates don’t mean mortgage lending will tighten up. Because the Fed's rate hike was so small, it’s not likely to prevent homebuyers from being able to purchase. There are mortgage products available for most every financial situation — from low down payment requirements to still-attractive fixed rate 30-year conventional loans.

Higher rates may motivate you to act. Some economists expect interest rates to rise in 2016 by as much as 1%. While the increases will probably be small, they may serve as the “nudge” that some Metro Atlanta home buyers need to get off the fence and get serious about buying.

Higher interest rates may keep home values in line with wage increases. Home values increased dramatically in some markets during 2015. This appreciation rose higher and faster than wage increases, making it harder for many Americans to afford to buy. The rise in interest rates typically slows the rate of home appreciation. This will allow wages the opportunity to “catch up” with real estate appreciation, making homes more affordable.

If you have an adjustable-rate mortgage, you probably shouldn’t worry. You probably don’t have an ARM. Experts say 85-90% of mortgage originations in the past two years were for 30-year fixed rate loans. Homeowners that may have had an ARM likely refinanced during 2015 expecting a possible rate increase. If you have an ARM don’t worry. Most ARMs have a locked interest rate between 5-7 years. The rate will remain unaffected during that period. Even if you’ve passed that timeframe, chances are the rate increases in 2016 will be small. If you’re still worried about the future, a fixed-rate refinancing is always an option.

Continue to shop around for the best deal. Just as the Metro Atlanta home buying process involves looking for the home that best suits their needs, you should do the same when loan shopping. Find the loan program that fits you and your financial situation. Shop around. Ask questions. Compare rates and lenders.

Get more information on Metro Atlanta home buying by checking out our other articles in the Atlanta Home Buying Tips section just beneath Atlanta GA Real Estate Categories to your right.