byAlma Abell

Homeowners choose to refinance their mortgages to get a better interest rate, reduce the monthly payment, convert to a fixed interest rate, or consolidate debt. Refinancing a mortgage involves taking out a new loan with different terms. The new loan pays off the previous mortgage while covering additional charges for closing costs. When homeowners refinance a mortgage, they go through the same approval process that they did with the original loan. Lenders look at the owner’s current debt to income ratio, credit history, credit score, requested loan amount and current home value.

Great Basin Federal Credit Union is a lender that provides refinance loans in Reno Nevada. If you’re looking to refinance your mortgage, you’ll want to gather information from several lenders. Interest rates for mortgage loans fluctuate daily, but once you apply you can lock in the current day’s rate for up to 90 days. While the lender is underwriting your application, your interest rate won’t change. If for some reason the lender is unable to close on your loan before the rate lock expires, you have the option to pay a fee to extend the locked rate.

The federal government mandates that lenders underwrite HARP refinance loans in Reno Nevada and the rest of the country. A HARP refinance allows homeowners to get a new loan even if the loan to home value is higher than 80 percent or the applicant’s credit history doesn’t meet conventional loan standards. Applicants still have to meet borrower standards, but the standards are less stringent than normal. The government implemented the HARP program to help alleviate the impact of the 2008 housing crisis. HARP refinance loans can help homeowners who have negative equity, adjustable rate mortgages, or high monthly payments.

Depending upon the terms of mortgage loans in Reno Nevada, a homeowner could reduce his monthly payment, annual interest rate and length. Instead of being under a 30-year mortgage, a owner who refinances could get a 20-year loan. This is valuable if the homeowner has more than 20 years left on his current loan. It’s even more valuable if his interest rate drops from 5 or 6 percent to 3 or 4 percent. Although the monthly payment is likely to drop less than if he took out another 30-year loan at 3 or 4 percent, he’ll save more money in finance charges. Homeowners can refinance through their current lender or apply with a different bank.