Mortgage Refinancing - Energy Efficient Mortgage Loans

Mortgage refinancing with an energy efficient loan allows you to upgrade your appliances and save money on your utility bills. Energy efficient mortgages allow homeowners the benefit of mortgage refinancing while taking advantage of energy saving options previously only available with new homes. Here are several tips to help you decide if Energy Efficient Mortgage Refinancing is right for you.

The main advantage of Energy Efficient mortgage refinancing is that it allows you to spend more money on your home because you are paying less on monthly utility bills. How do you go about finding a lender for energy efficient mortgage refinancing? Tell the mortgage lenders you consider that you want mortgage refinancing with an energy efficient loan and request a copy of the Good Faith Estimate from each of these lenders. You will use the Good Faith Estimate to compare offers and choose the best Energy Efficient Mortgage for your financial situation.

You will need to contact an Energy Rater in your area to perform a Home Energy Rating Systems (HERS) report. This rating looks at your home's windows, insulation, and the climate where you live, along with the cost of utilities you pay to give you a rating. This report will recommend repairs and upgrades to your home and estimate your energy costs after making these home improvements.
Once you choose a lender and provide the HERS report, your mortgage lender establishes an escrow account to pay for the upgrades and repairs to your home. Once these repairs and improvements are completed to your satisfaction, the escrow account is cleared and any contractors are paid.

Your Home Energy Rating Systems report will outline everything your home needs to be energy efficient. Your energy efficient mortgage loan pays for these repairs and upgrades to your home. Energy efficient mortgage refinancing allows you to save money each month on your utility bills by repairing leaky windows, poor insulation, and installing energy efficient appliances in your home. Making these repairs could also improve the appraised value of your home and build additional equity.

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Cash Out Mortgage Refinancing - An Affordable Alternative to Home Equity Loans

If you're considering a Home Equity Line of Credit or a Second Mortgage for borrowing against your home equity, cash out mortgage refinancing could save you a lot of money. What is cash out mortgage refinancing and is a new mortgage right for your financial situation? Here are several tips to help you decide if cash out mortgage refinancing is right for you.

Cash Out Mortgage Refinancing Basics

Mortgage refinancing with cash back simply means you are taking out more than you owe on your existing loan and pocketing the difference at closing. The equity you have in your home is the difference between the appraised value of your home and the existing balance of your mortgage. The amount of equity you have in your home and how much you plan on taking out affects the interest rate you qualify for when mortgage refinancing.

Suppose you owe $80,000 on a $200,000 home and want to borrow $40,000 to renovate your home. You could refinance for $100,000 and receive $20,000 cash at closing. You can actually use this money for any reason you like and the interest rate will generally be more favorable than what you would get with a Second Mortgage or Home Equity Line of Credit.

Cash Out Mortgage Refinancing Vs. Home Equity Loans

When you refinance your mortgage with cash back, you are wiping out your existing mortgage and taking out a new loan. One advantage of cash back refinancing is that you only have one monthly payment. Home Equity Lines of Credit and Second Mortgages each have their own monthly payment. If you fall behind on either loan the lenders will foreclose and take your home.

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