Question 1

Should “Dream Down Payment Initiative” borrowers in Little Rock refinance their homes?

Accepted Answer

Those in Little Rock who bought their homes through the Arkansas Development Finance Authority’s “Dream Down Payment Initiative” program are advised not to refinance for the first five years, as it is a requirement for the loan to be fully forgiven. Borrowers must also maintain residence in their homes for the same time period.

Question 2

How high are the average mortgage rates in Little Rock?

Accepted Answer

Average mortgage rates in Little Rock and the rest of the state have been trending downwards since 2018 for 30-year fixed, 15-year fixed, 7/1 adjustable, and 5/1 adjustable mortgages. In addition, home values have increased 14.5% since 2022, with the average home value in Arkansas being $190,369.

Question 3

What is the difference between an internal and external refinance in Little Rock?

Accepted Answer

The difference between an internal and external home loan refinance in Little Rock is that the former is switching to a different loan with one’s existing lender while the latter moves one’s loans to another lending institution. External refinances are typically more costly, as both the existing lender and new lender charge transfer fees.

Question 4

What are the fees associated with Little Rock mortgage refinancing?

Accepted Answer

Those in Little Rock who wish to refinance their mortgages will have to pay for the costs of the application, loan origination, appraisal, survey, title search and insurance, and attorney. They may also have to pay property taxes and prepayment penalties. In 2021, the average closing cost in Arkansas was $2,223 with taxes and $1,787 without.

Question 5

How does a Little Rock no-closing-cost refinance work?

Accepted Answer

While a no-closing-cost refinance allows borrowers in Little Rock to avoid paying the closing costs upfront, it folds these costs into the loan's principal, increasing the total amount owed and paid interest. Meanwhile, some lenders charge higher interest rates for a no-closing-cost refinance. According to the Consumer Financial Protection Bureau, it may just be cheaper for borrowers to pay closing costs upfront.

Question 6

How do you refinance a mortgage?

Accepted Answer

Decide why you’re refinancing, such as to get a lower interest rate, pay off your loan faster, or to get a lower monthly payment. Share your credit information with your broker along with information about the equity you have in your home. Review your mortgage refinance broker’s quotes and choose the best loan terms.

Question 7

How does mortgage refinance work?

Accepted Answer

The mortgage refinance process begins with choosing a broker and filling out loan application information. The process continues through underwriting and closing. The new mortgage is then used to pay off and close your original mortgage loan. This leaves you with a new loan and mortgage payment to manage each month.

Question 8

When should you refinance a mortgage?

Accepted Answer

If your credit score has improved or mortgage interest rates have dropped, refinancing can potentially save you money. Other reasons to refinance your mortgage include getting a fixed rate instead of an adjustable one or getting a shorter loan term. An increase in your home’s value that can let you access more equity is another reason to refinance.

Question 9

How much does it cost to refinance a mortgage?

Accepted Answer

The average cost to refinance a mortgage is $5,000. This amount varies, based on the state and county where the property is located and the loan amount. Common fees incurred when refinancing a mortgage include:

Appraisal fee
Broker’s fee
Credit check fee
Loan application fee
Recording fee
Title search and insurance fee

Question 10

How soon can you refinance a mortgage?

Accepted Answer

Some lenders make borrowers wait a minimum of six months before accepting a new mortgage refinancing application. However, when that happens, borrowers can check with other lenders to find one that doesn’t require a wait before refinancing. A mortgage refinance broker can guide you to lenders that allow immediate refinancing.

Question 11

How long does it take to refinance a mortgage?

Accepted Answer

The average amount of time it takes to refinance a mortgage is 45 days. In some cases, it may be possible to get it done faster. There also may be times when it takes longer to get a mortgage refinanced.

Question 12

What is the average closing cost to refinance a mortgage?

Accepted Answer

The average closing cost when refinancing a mortgage is $4,345. Closing costs may be much higher or lower depending on the amount of money borrowed. If you see an ad that says there are no closing costs, the costs are factored in elsewhere in the terms of the loan.

Question 13

How often can you refinance a mortgage?

Accepted Answer

You can refinance a mortgage as often as you like, however, if you refinance frequently, it can cost more in fees than you save on interest. Some reasons for refinancing repeatedly include a sharp drop in interest rates or going through a life event, such as a divorce.

Question 14

When is it worth it to refinance a mortgage?

Accepted Answer

It’s worth it to refinance when interest rates drop and refinancing will save you money. It also may be worth refinancing if you need to access some of your home’s equity to cover other expenses. Refinancing may be worthwhile if you're switching from a variable to a fixed rate mortgage.

Question 15

Can you refinance a mortgage with no closing costs?

Accepted Answer

You can refinance a mortgage without paying closing costs at the time. However, those costs are still owed and are factored in elsewhere in the financing. Lenders either add the costs to the principal owed or increase the interest rate on your refinanced mortgage loan.

Question 16

Can you refinance a home equity loan into a mortgage?

Accepted Answer

You can refinance a home equity loan into a mortgage in some situations. You have to have excellent credit to do this. Additionally, you must have enough equity in your home to qualify for a new mortgage that pays off the existing mortgage and your home equity loan.

Question 17

Can you refinance a mortgage without a job?

Accepted Answer

In some situations, you can refinance your mortgage if you don't have a job. It depends on the lender, because some will allow it and others won’t. A qualified mortgage refinance broker can help connect you with lenders that consider your situation. You have to submit documentation about your unemployment and the income you have.

Question 18

Can you refinance a mortgage with bad credit?

Accepted Answer

It’s possible to refinance a mortgage if you have bad credit. If your payment record with your current lender is good, you can discuss refinancing with that lender. You may also be able to refinance a mortgage by going through a government-backed lender, such as the USDA or FHA.

Question 19

Can you refinance a second mortgage?

Accepted Answer

It’s possible to refinance a second mortgage. If your credit score improves or interest rates drop, refinancing a second mortgage may save you money. Either of these situations can provide a way for you to get a lower interest rate. Refinancing a second mortgage can also sometimes shorten your loan repayment period.

Question 20

Can you refinance a first mortgage and not a second?

Accepted Answer

You can refinance your first mortgage and not the second one, but it can be difficult. You have to get the lender of your second mortgage to agree to the refinancing. The process is called resubordination, and some home equity lenders won’t agree. Additionally, lenders typically charge extra fees to resubordinate a loan.

Question 21

How often should you refinance your mortgage?

Accepted Answer

There is no recommended frequency for refinancing a mortgage. How often you should refinance is determined by when it will save you money. If you can get better terms on your mortgage by refinancing, then it’s a good time to take action.

Question 22

What should you expect when refinancing a mortgage?

Accepted Answer

When refinancing a mortgage, expect to answer a lot of questions and provide documentation to back up your answers. You'll may also pay fees and closing costs of around $5,000. Additionally, expect to start over in terms of building home equity, because refinancing takes the amortization process back to the beginning.

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Frequently Asked Questions

Introduction

Should “Dream Down Payment Initiative” borrowers in Little Rock refinance their homes?

How high are the average mortgage rates in Little Rock?

What is the difference between an internal and external refinance in Little Rock?

What are the fees associated with Little Rock mortgage refinancing?

How does a Little Rock no-closing-cost refinance work?

How do you refinance a mortgage?