Which loans are available for consolidation and refinancing?
With consolidation and financing, a borrower’s total loan balance, including the cost of the mortgage, is converted into a percentage of the property’s value.
For example, if a borrower has a $200,000 loan and a $100,000 equity in their house, the property would be worth $150,000 less if the $200 loan is converted to $100.
If the borrower’s equity in the house is worth $1 million, they would still own $150 million worth of the home.
Buying a house for consolidation also requires the borrower to purchase the property outright.
This is similar to refinancing an existing loan, but the purchase price is adjusted to reflect the lower value of the loan.
The seller is required to pay a fee for the sale of the house.
Buying a home is also considered a loan modification.
Consolidation financing can be used for the purchase of a home that is already occupied or for renovations.
Buys, rentals and remodels are not considered loans for consolidation purposes.
This means that if a home buyer does not have an existing home or an existing lease, they cannot consolidate their home loan.
Buys and rentals are generally considered loan modifications, but are not required to have a consolidation loan or refinancing loan.
However, when the home owner refinanced their home to reduce the cost, they may have to submit a consolidation and/or refinancing proposal.
For example, a home owner may choose to consolidate their mortgage to lower the mortgage’s interest rate to 1.25%, or they may consolidate their rent and utility bill.
The consolidation process involves filing a loan application with the National Association of Realtors, as well as obtaining the loan appraisals from the Realtor’s office.
If they are approved, they will be able to apply for a consolidation to lower their interest rate.
A mortgage refinancing is typically considered a second loan, as it does not include refinancing a previous loan or a previous purchase.
When refinancing, a mortgage lender will be required to report any changes in the borrower that were not made during the original loan transaction.
In the case of a refinancing to reduce interest, refinancing costs will increase.
However if the borrower is willing to pay those costs, they should still take a loan from a refinancer.
To consolidate a mortgage, a lender must submit a loan proposal and approval of the homeowner to the National Realtoring Association.
In addition to the loan proposal, the lender must file a loan appraisal with the Realty Council of America.
The Realty Trust is responsible for submitting these appraisements.
The appraisement will typically report the current value of a house, along with the purchase prices and any improvements the house has undergone.
In some cases, the appraisment will include a valuation of the exterior of the building.
The appraisal will usually also include an estimate of the value of improvements in the home, along a list of estimated annual maintenance costs.
The lender may also include a statement about the lender’s compliance with the terms of the refinancing.
Once the lender has submitted the appraisal, the ReALTor’s staff will review it and determine whether the refinancer meets the requirements for the lender to consolidate.
If approval is granted, the refinancings will begin and the homeowner will have a new home.
If a borrower does not qualify for consolidation, the homeowners attorney will be responsible for taking legal action against the lender and for the repayment of the consolidation loan.
For more on consolidating loans, check out our article, Consolidating Loans for a New Home: What Are the Options?