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					                                          Refinancing Booklet

          In a way, "refi-nancing" is a misleading term, because it suggests to many homeowners a process
of changing or altering their mortgage.
          In fact, refinancing is simply the process of taking out a new mortgage, and using the money
obtained to pay off your current mortgage.
          That means refinancing involves many of the same steps that were involved in applying for and
getting your mortgage in the first place and can also involve some of the same expenses.
          On the other hand, depending on how the terms of mortgages that are availab le now co mpare with
the terms of your current mortgage, refinancing can save you a significant amount of money.
          Refinancing is most likely to make sense for you if your current mortgage has an in terest rate that
is higher than current interest rates.
          If you refinance with a lower interest rate, you'll pay less each month - even if your new mo rtgage
is for the same amount as your current mortgage. Of course, the process of getting a mortgage invo lves
costs of its own. Tradit ionally, the decision on whether or not to refinance has meant balancing the savings
of a lo wer monthly pay ment against the costs of refinancing. But in recent years, lenders have introduced
"no cost" and "low cost" refinancing packages that minimize o r co mpletely eliminate the out-of-pocket
expenses of refinancing. (These refinancing packages compensate with a higher interest rate, or by
including some of the costs in the amount that is refinanced.)
          With traditional refinancing, the most often cited rule-of-thu mb is that the interest rate for your
new mortgage must be about 2 percentage points below the rate of your current mortgage for refinancing to
make financial sense. However, with the newer low and no cost refinancing programs, it can be worth your
while to refinance to obtain a much smaller reduction in interest rates (even as low as 3/ 4%).
          How long you expect to stay in your home is also a factor to consider. If you'll be moving in a
few years, the month-to-month savings may never add up to the costs that are involved in a refinance.
          There are many good reasons to refinance. The most common ones are described on the next
page. If you see your situation there, read more about the costs involved. You'll get a pret ty good picture
of whether it would be a sensible opportunity for you or not.
          Still have questions? Just call us today. With all of the options available, there's no substitute for
actually working the numbers to see if refinancing makes sense for you.
 Table of Contents
 What is Refi nancing - And Should I Even Care?                                              1
 Candidates for Refi nancing: Is Yo ur Mortgage Here?                                        2
 Monthly Payment Estimator                                                                   3
 Costs . . . And No Costs of Refinanci ng                                                    4
                                          Refinancing makes cents
                                           for many homeowners.
Does refinancing make sense for you? This report is designed to help you determine the
answer to that question and make the process of refinancing your mortgage a little easier
and a lot less confusing. However, there is no substitute for a direct relationship with a
reputable mortgage lender. Deciding to refinance your home is a complicated decision,
influenced by many different factors. An experienced Cherry Creek loan officer can help
you sort them out and make a choice that's right for you. If you're seriously considering
refinancing, call Cherry Creek today to speak with a loan officer.

What is Refinancing -
And Should I Even Care?
Compliments of Cherry Creek Mortgage
                                                                                            (800) 325-2062
When refinancing makes sense.
Why do people choose to refinance? Here are some o f the most common reasons:

Save Money on
Interest Rates
          If you got your current mortgage when interest rates were considerably higher than they are now,
refinancing could make sense for you. Refinancing at a lower rate will reduce your monthly payments,
and, if you plan to stay in your home for a reasonably long time, these lower pay ments will more than make
up for the costs associated with refinancing.
          How much lower should interest rates be? That depends on how much the refinancing will co st
you. Lenders used to say that a difference of 2 percent or mo re was needed before refinancing made sense.
But with the newest low-cost and no-cost refinancing options, refinancing can make financial sense even
with as little as a 3/4 percent to 1 percent difference in interest rates.
          Much depends on your plans and your refinancing options. You can get a rough idea of how
much you could save every month fro m the estimator on page 3 but be sure to consult a Cherry Creek loan
officer for a mo re accurate and detailed analysis before making your decision.

Convert an
Adjustable Rate Mortgage (ARM) to a Fixed Rate
         You may have selected an ARM for its lower in itial interest rate. If prevailing interest rates are
currently low, you may decide to opt for a fixed rate mo rtgage. The safety and security of knowing what
your monthly payment will be every month is priceless to many people.

Convert an Adjustable Rate Mortgage (ARM) to an ARM with More
Desirable Features or Lower Rates
          Most ARMs have protective features, called caps, that limit the amount the interest rate or
monthly payments can increase. You may want to look for an A RM that offers you better protections than
your current loan - which can not only make you feel mo re financially secure but deliv er significant
savings. And even though the interest rates on ARMs fluctuate with prevailing market rates, you may have
one that's tagged to higher indices - and carries a h igher interest rate - than other ARMs currently available.

Build Your Equity Faster
          If your financial resources have improved since you obtained your mortgage, you may decide to
convert to a mortgage with a shorter term - perhaps 15 years instead of 30 years. The monthly payment
will be higher, but your overall interest costs will be substantially lo wer, and if current interest rates are
below that of your existing mo rtgage, your monthly payments may not increase by very much at all. This
can be particularly advantageous as you near retirement. A shorter loan term may enable you to own your
home before you retire.

Convert Some of Your Equity to Cash
         If you've held your mortgage for some time, you will have begun to reduce substantially the
outstanding principal on your loan. That means you'll be able to finance a considerably larg er amount than
you owe on your current mortgage. You can use the difference - which can be thousands of dollars - for
major purchases, for financing college costs, or to invest in stocks or bonds. Remember, your home will
appreciate the same whether your equity is 10%, 20% o r 50%. Putting your equity to work in other
investments may give you a much greater overall return than leaving it in your home.      Before doing
this, you should consult your financial advisor for more information and advice on your particular
situation.
Re financing . . . Does it Make Cents for You?                                                Cherry Creek
Mortgage  (800) 325-2062

Candidates for Refinancing: Is Your Mortgage Here?
                                    Saving money,
                                   gaining security,
     building equity faster, paying off debt or investing are some of the reasons
                                  people refinance.
           "How much will I save every month?" It's the first question most homeowners ask when
considering refinancing. And with all the options in today's refinancing packages, the only way to get a
definit ive answer is to discuss your particular situation with a qualified loan officer.
           For a quick estimate of what you can save, this chart can give you a good idea of the monthly
payments you'd make with a new interest rate.

INSTRUCTIONS

1. Find your new interest rate in colu mn 1.

2. Choose the appropriate payment factor fro m colu mn 2 or 3:
          a) Use column 2 for a 30-year fixed rate mortgage or an ARM;
          b) Use colu mn 3 for a 15-year fixed rate mortgage.
This is the monthly principal and interest for $1,000 of a mo rtgage loan.

3. To figure your appro ximate monthly payment, mu ltip ly the payment factor by the amo unt of your
mortgage without the last three zeros. (For examp le, if your mortgage is $120,000, use 120.)

EXAMPLE: It's the year 2010 and the world has discovered the key to economic security. As a result, 30-
year fixed rate mo rtgages are now available at 4-3/ 4 percent interest. You want to know how much your
monthly payments would be on your $150,000 mortgage.

STEP 1: Find 4-3/4% in colu mn 1.

STEP 2: Find your payment factor in colu mn 2 (30-year fixed rate: $5.22.)

STEP 3: Multip ly your payment factor by the amount of your mortgage without the last three zeros.
($5.22 x 150 = $783.00.)

Re financing . . . Does it Make Cents for You?                                                     Cherry Creek
Mortgage  (800) 325-2062
          Cherry Creek M ortgage has been serving Northern California home buyers since 1971. We specialize in a
wide variety of loans both for home purchases and refinances, making us a one-stop source for all your financing
needs. We've been voted "Best of the Best" by readers of the Alameda Newspaper Group for six consecutive years so
you can be assured your loan is in good hands.
          Our loan officers are experts at determining the best ways for our borrowers to save money, build equity and
use their mortgage as a tool for creating financial wealth and we can help you too.
          Just call us at (800) 325-2062 and we'll be happy to assist you.

Monthly Payment Estimator
About Cherry Creek Mortgage
 Colu mn 1 Colu mn 2          Colu mn 3
Interest      30-Year        15-Year
Rates         Payment        Payment
              Factors -      Factors -
              Fixed and      Fixed
              ARM
4%            $4.77          $7.40
4-1/4%     $4.92        $7.52
4-1/2%     $5.07        $7.65
4-3/4%     $5.22        $7.78
5%         $5.37        $7.91
5-1/4%     $5.52        $8.04
5-1/2%     $5.68        $8.17
5-3/4%     $5.84        $8.30
6%         $6.00        $8.44
6-1/4%     $6.16        $8.57
6-1/2%     $6.32        $8.71
6-3/4%     $6.49        $8.85
7%         $6.66        $8.99
7-1/4%     $6.83        $9.13
7-1/2%     $7.00        $9.28
7-3/4%     $7.17        $9.42
8%         $7.34        $9.56
8-1/4%     $7.52        $9.71
8-1/2%     $7.69        $9.85
8-3/4%     $7.87        $10.00
9%         $8.05        $10.15
9-1/4%     $8.23        $10.30
9-1/2%     $8.41        $10.45
9-3/4%     $8.60        $10.60
10%        $8.78        $10.75
10-1/ 4%   $8.97        $10.90
10-1/ 2%   $9.15        $11.06
10-3/ 4%   $9.34        $11.21
11%        $9.53        $11.37
11-1/ 4%   $9.72        $11.53
11-1/ 2%   $9.91        $11.69
11-3/ 4%   $10.10       $11.85
12%        $10.29       $12.01
                                      PAYMENT FACTOR CHART
         How much will refinancing cost you? So much depends on your specific situation that it's
impossible to give a simple measure.
         With traditional refinancing, you should expect to pay an average of 3 percent to 6 percent of the
outstanding principal in refinancing costs. That is, if you've paid down your original $80,000 mortgage so
the outstanding principal is now just $60,000, you can expect refinancing costs to run between $1,800 and
$3,600. Add to that any prepayment penalties you may face for paying off your mo rtgage early (see below)
and the costs of paying off any second mortgages you may have.
          Today, however, Cherry Creek offers no-cost and low-cost refinancing. As the names suggest,
they involve little o r no out-of-pocket costs (low-cost refinancing may involve about $500 in costs). These
no-cost and low-cost loans compensate for the lack of up-front expenses either through a somewhat higher
interest rate, or by including the costs of refinancing in the amount of the loan. The costs of traditional
refinancing usually include:

TITLE S EARCH AND
TITLE INS URANCE
The title search confirms your legal o wnership of the house and ensures there are no outstanding claims
against the property. Title insurance guards the lender against a mistake in this search and is almost always
required. Be sure to ask the company carrying the present title insurance policy if it can re -issue your
policy at a re -issue rate. A re-issue could save you up to 70 percent compared to a new policy.

APPLICATION FEE
This covers the lender's init ial costs to process your application and obtain your credit report.

APPRAISAL FEE
This fee covers the costs of an independent appraisal of the value of your home for your lender's use in
evaluating your application.

LOAN ORIGINATION FEE
This fee covers remain ing costs associated with processing your mortgage application and co mpleting your
loan.

DISCOUNT POINTS
Discount points are essentially prepaid finance charges paid when you close on your mortgage loan,
usually to obtain a mortgage with a lo wer stated interest rate. Usually a lender will offer a number of
mortgages with different comb inations of interest rates and discount points; the higher the interest rate, the
fewer the discount points charged at closing. One point equals 1 percent of the value of the mortgage (for
example, $800 on an $80,000 mo rtgage).

CLOS ING AGENT AND REVIEW FEES
Usually the lender will charge you fees for the services of the closing agent who actually conducts the closing. You
may also be charged for other legal services involved in completing your loan.

PREPAYMENT PENALTIES
Some mortgages carry a penalty for paying off the loan before the stated term is up. While this practice varies by state,
type of lender and type of loan, prepayment penalties can be quite substantial. The mortgage document for your
existing loan will tell you if you face a prepayment penalty, and, if so, how large it is.

OTHER COSTS
Depending on your mortgage, you could face fees for a VA loan guarantee, FHA or private mortgage insurance, and a
variety of other possible closing costs.

WHAT NEXT?
If you're seriously interested in considering refinancing further, talk to a Cherry Creek loan officer before you make
your final decision. As you've learned, there are a great many factors to weigh - and we can help you sort
them out.

Re financing . . . Does it Make Cents for You?                                                           Cherry Creek
Mortgage  (800) 325-2062
    A rough measure of the overall costs you can expect plus low cost
              alternatives and ways to hold down costs.
Costs . . . and No Costs of Refinancing
Still have questions about refinancing? Cherry Creek's fully automated refi analyzer can give you the
answers you need quickly and easily. Just call our toll-free hotline and answer a few simp le questions
using a touch-tone phone. A free analysis will be done for you by the next business day.
                                                Call today!



                                (800) 683-8241 x. 37

				
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