What if you could learn all about your refinancing options practically overnight?

A good mortgage report is one of the best ways to learn about refinancing your mortgage. Unfortunately, most homeowners don’t know what these reports are, much less how the reports can help them out.

Wondering what a mortgage report can do for you and your own refinancing plans? Keep reading to discover all the benefits of understanding your own report.

What Is a Mortgage Report?

Our guide is going to help you learn what your own mortgage report means for your refinancing options. First, though, we need to answer a basic question: what are mortgage reports?

Mortgage reports are like specialized credit reports used by financial lenders. These lenders review all of the information in your report before deciding whether or not to approve your application for a home loan.

A lot goes into the mortgage reports these lenders use. For example, the core information typically comes from multiple credit bureaus. By combining and analyzing these reports, lenders get a better idea about your employment history, credit history, and other key information.

Now that you know what mortgage reports are, let’s take a closer look at how your own report can help you learn more about refinancing options.

Understand Your Loan Type

If you want to refinance your home, your basic goal is to get a better mortgage than the one you had before. And by studying your mortgage report, you can verify key information, such as the type of loan you have.

Reviewing this information can help you make the switch between something like an Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage. Such a change would add much stability and consistency to your future mortgage payments.

You can also use the report to verify whether you have an FHA loan and how much money you put down as a downpayment. This can help you determine how easily you can refinance (based on a combination of the downpayment and existing equity in the home), ultimately helping you get rid of the annoying PMI that comes with modern FHA loans.

The Importance of Loan Term

For most people, their home is the most expensive thing they will ever buy. That is why it is so important to read your mortgage report and understand the term of your existing mortgage.

Most mortgages last for either 15 years or 30 years. But when you are refinancing your home, you can change the mortgage term. And this may have a major impact on your monthly payment amount and the lifetime of the loan.

For example, if you have a 30-year loan, you may be tempted to refinance to another 30-year loan and reduce your monthly payments. But it may be better, in the long run, to refinance into a 15-year mortgage instead.

In that example, your new monthly payment may be similar to what you had before. But you can effectively cut the lifetime of the loan in half, making it easier for you to retire and provide for your family later in life.

The Importance of Interest

Mortgage reports provide detailed info about your current interest rate. And for most homeowners, the interest rate is at the heart of why they wish to refinance in the first place.

The simplest way to approach refinancing your home is to verify what your current interest rate is. You can then have a discussion with your lender about current mortgage rates. If it is possible to refinance and end up with a lower rate, then there is really no “downside” to refinancing.

Additionally, studying your mortgage report is a great way to familiarize yourself with the distinction between your interest rate and your APR.

Understanding APR

Even after obtaining their first mortgage, one topic remains confusing for many homeowners: the difference between interest and APR. It’s particularly important because your APR is always higher than the base interest report.

Initially, most lenders will emphasize only the interest rate. For example, they may talk to you about a 30-year mortgage interest rate of only 2.940%. But what you end up paying is more like 2.997%.

That higher amount is actually your APR. The APR provides a better idea of how much the lender will actually pay, including fees and other charges.

Long story short? It’s important to understand APR versus interest rate, especially when refinancing. And mortgage reports can help provide the key info you need before you refinance.

Important Contact Info

When you simply need to know how much money is in your bank account, almost anyone at the bank can help you out. It’s just a matter of walking into a branch or picking up a phone and giving them a call.

However, when you need information about your mortgage, you typically need to talk to a specialist. And as the years go by, it’s very easy to forget the name of the specialist that you previously worked with.

Fortunately, this is the kind of basic information that is likely to be contained in your mortgage report. And by checking and confirming such information, you can make it easier to know who to talk to when you begin making serious refinancing plans.

Your Residential Mortgage Credit Report

It’s an open secret that your credit plays a major role in obtaining a home loan. Your exact credit score may influence whether you get a mortgage or not and how low the interest rate is.

Fortunately, your report will include your credit report originally compiled by the lender. This helps you learn what your credit score was (as reported by multiple bureaus) and the different factors affecting this score.

The good news is that many homeowners improve their credit over time. By understanding how much better your credit is now versus when you first got the mortgage, you will be in a much better spot to negotiate new terms when you refinance.

Your Next Move

Now you know why a mortgage report is so important to your refinancing plans. But do you know who can help you get the best terms when you refinance your home?

We specialize in mortgages in the Portland area. To see how we can make your refinancing dreams come true, contact us today!