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ICBA: Is Now the Time to Refinance?

Talk to Your Community Bank about Historically Low Interest Rates

Washington, D.C. (June 8, 2009)—June is National Homeownership Month, and the nearly 5,000 members of the Independent Community Bankers of America (ICBA) continue to help millions of Americans in communities throughout the country to refinance their mortgages through the personal attention that only a local community bank can provide.

“These are challenging economic times, but community bankers haven’t changed the way they do business,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “With rates near historical lows, it’s an opportune time for some homeowners to refinance their mortgages. Borrowers can count on their community bank to work hard to find the best mortgage loan for their particular circumstances, and that includes refinancing a mortgage a borrower might already have.”

New programs such as the Obama administration’s Making Home Affordable program are making it possible for many homeowners to refinance with a common-sense community bank mortgage lender. Community bankers work with their customers to make sure they can not only afford to buy the home of their dreams, but also stay in their home over the long term.

Refinancing a mortgage is not unlike getting a new mortgage. Community bank lenders will ask for a loan application, credit history, property value, level of equity and other data. Homeowners should carefully weigh options when refinancing. Everyone’s situation is different, and there are a number of considerations to take into account when refinancing, including the length of time you plan to stay in the home, how fluctuations in home prices may affect equity and whether the money saved by lowering rates offsets closing costs.

ICBA offers the following suggestions to homeowners who want to refinance their mortgage.

  1. Organize paperwork, such as pay stubs, W-2 forms, tax returns and bank and investment statements.
  2. Check your credit report and bring it to your community banker. Credit reporting agencies must give you one free report annually. View free report. 
  3. Investigate if there are special refinancing programs available. As mentioned, new programs such as the Obama administration’s Making Home Affordable program may make it possible for you to refinance your mortgage with a common-sense community bank mortgage lender.
  4. Ask your loan officer to carefully explain the refinance options available, including any rate adjustments, other loan features and fees so you aren’t surprised by initial or future payment increases.

For more information, visit www.icba.org. To find a community bank near you, visit the ICBA community bank locator.