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Should You Refinance Your Mortgage: An Interview with Jesse Morgan of Village Mortgage

By Jesse Morgan

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

I have been a loan officer for 10 yrs, started out with HSBC consumer lending and quickly became youngest branch manager within the corporation. After 4 years of working in the corporate world I wanted a smaller local company environment to work with to develop my clientele on a more personal level. So I moved to a company called CT Home Loans soon Village Mortgage came around and we were absorbed into the company in 2008 and have been going strong ever since.

Village Mortgage is one of the strongest, down-to-earth common sense mortgage companies when it comes to approving files. Our goal is to provide every homeowner and realtor with topnotch customer service and the fastest and most accurate closing process in the industry.

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

With the HARP and HAMP (Fannie Mae and Freddie Mac's making home affordable refinance and mortgage programs) you don't need any equity at all in most cases. Simply go to www.fanniemae.com and www.freddiemac.com; plug your physical address to see if your loan qualifies.

The current guidelines dictate that your loan had to be closed on or before May 31st, 2009 to qualify for those programs. If you get stuck or lost, I can always walk you through the steps or even go through the process for you.

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

No, There are several programs that allow lower credit scores, conventional financing will allow a 640 credit score, FHA and government programs allow down to a 640 credit score. Depending upon your situation we work with clients to pay-off some debt and can often improve your scores so that you qualify for a better rate or even a different program.
That's, the Village Difference!

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

There are dozens of reasons to refinance; here are just a few of those reasons:
Interest rates have dropped since your purchase or last refinance
You purchased an adjustable rate mortgage (ARM) that is about to reset (go adjustable)
Maybe, you're making more income and want to reduce your term and save interest that way, or vice versa
You took a shorter term and now financially are struggling and need to refinance into a longer term to save money
One of the top reasons I've seen is are credit scores, if you had a lower score at the time of your loan you may have taken a higher rate due to that score and now with your impeccable on-time payments your credit score has drastically improved and you can qualify for a lower rate
You're considering debt consolidation by refinancing to pay off high interest credit cards, or combine a 1st and 2nd or even 3rd mortgages together into one to save money
Maybe you just want to tap into your equity for some home improvements or even just take the cash out and invest it for a rainy day, the interest is tax deductible and rates are still historically low.

There are some myths amongst consumers that you have to drop your interest rate by a full point in order for a refinance to be worthwhile. After all of my years in this industry, I tend to disagree with that myth, payment savings are relative to loan size. Take, for example; on a larger loan as little as .25 point reduction in your rate can save you money, whereas a smaller loan you need a larger drop to create monthly savings.

We know that every financial situation is different, there are no two-borrowers that are alike nor are their mortgages. True monthly savings depends on each individual situation or any of the many reasons mentioned above.

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

Absolutely, there isn't any time constraint, as I stated above each situation is different, with prepayment penalties becoming a thing of the past, you can pay of almost all loans whenever you want with no monetary penalty. Also, if you are using the refinance to pay off debt or make home improvements, it can only help your situation when you go to sell and buy a new home.

Can I still refinance if I have a second mortgage?

Yes, depending on the amount of equity in your home you may be able to combine it with your first mortgage and save money. If you don't have the equity you can do what is called a subordination.

Basically what happens is we {Village Mortgage} ask your second mortgage company to allow us to place a refinanced first mortgage lien in front of their already existing 2nd mortgage. Now, this is not guaranteed, but with all of the new homeowner protection laws and the lending guidelines, I have not seen a subordination not be approved yet.

There are a few other programs to consider if your loan is owned by Fannie Mae or Freddie Mac that allow for refinancing on your mortgage even if what you owe is significantly more than the value of your home, with a simple phone call we can look up your address on each of the websites to see if you qualify.

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

In retirement most people are on a fixed income, if you can combine and pay off debt to save money it can free up some disposable income to enjoy life to its fullest.

What are the risks associated with refinancing my home?

In these market conditions, one of the biggest risks is that your house is worth less than what you paid. In fact, in most cases this most likely a reality for you today, but with all of the programs out there, even if this is the case there may be a scenario that we can make work for you and your financial situation. You don't know until you try. In my opinion, the only risk is not calling or making an effort to try and refinance, a lot of people think that they don't qualify, so make the move and check out your options.

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

Village Mortgage has branch offices in Connecticut, Massachusetts, and Rhode Island. We also just launched our newly branded website; www.villagemtg.com where loan officer has his/her own personal site.

If you would like to get in touch with me; head over to my: www.jessemorgan.villagemtg.com; email me at jmorgan@villagemtg.com; or give me a call on my cell phone, which is on me 24/7 - 860-803-4295.

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