Buying a home is one of the most important financial decisions you will ever make. If it has been a while since you took out a mortgage, it is a good idea to make sure you understand everything that is involved in obtaining a home loan refinance.
There are certainly many advantages to a home loan refinance. If you have been in your home for awhile, there is a good chance that you have built up quite a bit of equity in your home. Even if it has not been that long since you purchased your home, if you live in an area where prices have appreciated considerably, you could still have a significant amount of equity in your home to tap into for a home improvement, purchase or to use for debt consolidation.
If you are considering a home loan refinance, it is important to know what you should expect. In some ways, getting a home loan refinance is not much different from getting your first mortgage with the exception that you already have the house! You will want to make sure that you look for the best terms and interest rates. In a similar fashion, the lender will want to make sure you are credit worthy before they approve you for the loan.
One of the first questions the lender may ask is why you are interested in refinancing. Be honest with the lender, because this may help him or her to design a home refinance package that perfectly suits your needs. Even if you are planning to consolidate your debts with your home refinance, be sure to mention this when you apply.
Be prepared for the fact that the lender will run a credit check on both you and any co-borrower in order to determine the level of credit risk you present. This is part of the process of becoming pre-approved in the home buying process. The lender will check your credit score and also check your credit report to determine the number of delinquencies you may have, the number of open accounts you have and the balances on those accounts.
The lender will also be interested in your income and various expenses. This is to ensure that you will be able to actually afford the proposed home loan payment. The underwriting guidelines for every lender are different; however, the general rule of thumb is that a prospective buyer should not have a debt to income ratio that is higher than 36%. Additionally, lenders usually prefer for your total housing expenses not to exceed 28% of your income. Of course, there are some exceptions to this rule. In certain circumstances, lenders will approve loans for buyers who have a debt to income ratio up to 40%. You can usually qualify with a higher debt to income ratio if you are able to make a larger down payment and/or if your credit rating is good enough.
To ensure there are no surprises when you sit down with the lender to discuss your home loan refinance, it is a good idea to check your own credit score in advance and be certain there are no mistakes or discrepancies before you submit your home loan application. If you do find any discrepancies, take the time to have them fixed before you apply for a home loan refinance.
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Knowing When to Refinance Your Home Loan
There are a lot of people who are intimidated by the thought of refinancing their home. They tend to concentrate on the closing overhead and costs more so while neglecting the benefits that a lower mortgage payment can create for them.
Evaluating a mortgage refinance is actually fairly easy. Basically it involves adding up the overheads and adding up the benefits to see if the benefits will outweigh the overheads. If in the end you are going to benefit from refinancing a home loan, then the outlay are minimally viewed as an investment.
When you conclude that you are willing to look into refinancing your home, you need to find out what present mortgage rates are.
Recall your financial rating as it will play a huge part in what home loan rate you are accepted for, but you can get a overall idea by staying on top of and monitoring what the US typical mortgage conditions are. If you don't know how much your APR is on your home mortgage, find out as quickly as possible. You can check your mortgage papers or call your lender to see what it is. If your note is higher than what the present home loan rates are, you may profit from refinancing your mortgage.
Check with lenders and find out what their closing fees are for a refinance loan. It is usually a few thousand dollars to refinance a home, but often the ultimate expenses are reduced more than a home mortgage purchase transaction, due to less parties involved. Then have the broker decide what your new monthly payment would be if your refinanced that day. Subtract that number from your present monthly payment total. For example, if you currently pay $1,000 a month and you can get your payments lowered to $900 a month with a refinance, you will have a monthly savings of $100. Now let's say that it costs you $1500 to refinance your mortgage. With those numbers it will take you just 15 months to break even and after that you will commence saving money on your new home loan.
After you compute out how long it will take you to commence saving money on your payments, think about how long you will be staying at your residence. If you intend on relocating in the next year or two, refinancing is commonly not the best selection. But, if you expect on staying at least another 5 years in your existing residence, you are expected to be able to profit from a decreased interest mortgage payment when refinancing.
One other thing that you have to think about when deciding when to refinance is how much collateral you have in your home and what your house is currently valued at. If you don't have that much equity in your home or you still owe more on your residence than what your home is currently assessed for, then it's expected that you will not get accepted for a refinance.
Lastly, if you have an adjustable terms on your new home loan (ARM) and you are scared about the fluctuating rates, you definitely want to look into a mortgage refinance while the terms are low, so you can secure a low note with a permanent rate mortgage. Call your broker or other viable mortgage company to see if you will be able to be approved for a home loan.
Evaluating a mortgage refinance is actually fairly easy. Basically it involves adding up the overheads and adding up the benefits to see if the benefits will outweigh the overheads. If in the end you are going to benefit from refinancing a home loan, then the outlay are minimally viewed as an investment.
When you conclude that you are willing to look into refinancing your home, you need to find out what present mortgage rates are.
Recall your financial rating as it will play a huge part in what home loan rate you are accepted for, but you can get a overall idea by staying on top of and monitoring what the US typical mortgage conditions are. If you don't know how much your APR is on your home mortgage, find out as quickly as possible. You can check your mortgage papers or call your lender to see what it is. If your note is higher than what the present home loan rates are, you may profit from refinancing your mortgage.
Check with lenders and find out what their closing fees are for a refinance loan. It is usually a few thousand dollars to refinance a home, but often the ultimate expenses are reduced more than a home mortgage purchase transaction, due to less parties involved. Then have the broker decide what your new monthly payment would be if your refinanced that day. Subtract that number from your present monthly payment total. For example, if you currently pay $1,000 a month and you can get your payments lowered to $900 a month with a refinance, you will have a monthly savings of $100. Now let's say that it costs you $1500 to refinance your mortgage. With those numbers it will take you just 15 months to break even and after that you will commence saving money on your new home loan.
After you compute out how long it will take you to commence saving money on your payments, think about how long you will be staying at your residence. If you intend on relocating in the next year or two, refinancing is commonly not the best selection. But, if you expect on staying at least another 5 years in your existing residence, you are expected to be able to profit from a decreased interest mortgage payment when refinancing.
One other thing that you have to think about when deciding when to refinance is how much collateral you have in your home and what your house is currently valued at. If you don't have that much equity in your home or you still owe more on your residence than what your home is currently assessed for, then it's expected that you will not get accepted for a refinance.
Lastly, if you have an adjustable terms on your new home loan (ARM) and you are scared about the fluctuating rates, you definitely want to look into a mortgage refinance while the terms are low, so you can secure a low note with a permanent rate mortgage. Call your broker or other viable mortgage company to see if you will be able to be approved for a home loan.
Article Source: http://www.holidaysoftheyear.com
Turbo Equity-Building With A Mortgage Refinance
Refinancing to a shorter term can be a great way to give your equity building efforts a jolt. This is because a shorter term means that your interest is not stretched out over as many years, so you pay less of it. Additionally, even though the payments on the refinance loan may be higher than your original mortgage payments, more of the money goes to the principal. And this is how your home builds equity: by paying down the principal.
What is equity?
Your home builds equity as you pay down the principal, or as your home increases in value. Basically, equity is the difference between how much your home is worth and how much money you owe. For example, if you have a home that is worth $150,000, to figure out the equity, you subtract how much you still owe on your mortgage. If you still owe $90,000, the equity in your home amounts to $60,000.
Boosting your equity
Because so much of your mortgage payments go to interest during the first half of the term of your home loan, equity builds slowly, especially in the first 10 years. If you have an interest-only loan, the equity builds at an even slower rate. If you want to boost the rate at which your home builds equity, you can refinance to a loan with a shorter term. A shorter term means that you will have to make higher payments on the refinanced loan, but it also means that more of the money is going to the principal, helping you pay down the loan faster and building equity at a more rapid rate.
Advantages to refinancing to a shorter term
While the higher payments may be a deterrent to those whose income has remained steady for years, someone who has received an increase, and expects that increase to remain in place, can derive the following benefits from refinancing a mortgage to a shorter term, such as from a 30-year loan to a loan term of 10, 15, or 20 years:
· Lower interest rate for a shorter term means you pay much less in interest
· Shorter term means that the principal goes down faster, quickly building equity
· Less money is paid out in interest on account of fewer years to spread the loan over
· House is paid off faster, freeing the funds sooner than if you had a 30-year mortgage
Of course, before refinancing for any reason, you should make sure that your current mortgage is not subject to prepayment penalties.
Article Source: http://articles.rssorange.com
How to Save with 100% VA Refinance Loan
The downside is the 100% VA Refinance Loan are similar to standard loans, since the buyer is placing his home up for collateral. First time buyers may want to consider the 100% VA Refinance Loan, since no upfront costs are needed; however, be aware that risks out of the ordinary are involved. The 100% VA Refinance Loan whether equity is involved or not looks at “negative equity.” If you take out the loan, and the value of the property falls below the amount of money borrowed, then you may face additional charges.
Many of these loans come with higher interest rates and at times a lender may require that the borrower agree to additional stipulations, such as the “Mortgage Indemnity Guarantee.” This policy ensures that--one way or another --the lender will get his money. If you fail to agree to the policy, the lender most likely will deny your loan. But in most cases this will never happen wth VA Refinance Loan.
Another great VA Refinance Loan is the 5/1 Arm provided by the VA. It is fixed for 5 years and then will adjust after that period. Since the VA Streamline Refinance is simple and easy to do for veterans, getting a low rate while they are good presents a differnt outlook on what to take first, the fixed or the adjustable.
You may qualify for a VA Home Loan if you fall into one of the following categories:
Active-duty Veterans discharged during WWII or later, without the status of "dishonorable"
Active-duty Veterans with at least 90 consecutive days of service during major conflict
Peacetime Veterans and active-duty personnel with at least 180 days of consecutive service
Enlisted Veterans whose service began after 1980, or officers whose service began after 1981, and who have served at least 2 years.
National Guard and selected Reserve members may also qualify. Check your eligibility with a qualified VA Home Loan Specialist at American Wide Loans if you have any questions.
Finally, when consider loans, make sure you know what you are getting into by reading all available information pertaining to the loan. You will want to understand what all of the different rates and fees will be–and how this will ultimately affect how much you pay monthly and for the long term–by weighing out the pros and cons before signing any permanent agreement.
Article Source: http://www.thearticleinsiders.com
Many of these loans come with higher interest rates and at times a lender may require that the borrower agree to additional stipulations, such as the “Mortgage Indemnity Guarantee.” This policy ensures that--one way or another --the lender will get his money. If you fail to agree to the policy, the lender most likely will deny your loan. But in most cases this will never happen wth VA Refinance Loan.
Another great VA Refinance Loan is the 5/1 Arm provided by the VA. It is fixed for 5 years and then will adjust after that period. Since the VA Streamline Refinance is simple and easy to do for veterans, getting a low rate while they are good presents a differnt outlook on what to take first, the fixed or the adjustable.
You may qualify for a VA Home Loan if you fall into one of the following categories:
Active-duty Veterans discharged during WWII or later, without the status of "dishonorable"
Active-duty Veterans with at least 90 consecutive days of service during major conflict
Peacetime Veterans and active-duty personnel with at least 180 days of consecutive service
Enlisted Veterans whose service began after 1980, or officers whose service began after 1981, and who have served at least 2 years.
National Guard and selected Reserve members may also qualify. Check your eligibility with a qualified VA Home Loan Specialist at American Wide Loans if you have any questions.
Finally, when consider loans, make sure you know what you are getting into by reading all available information pertaining to the loan. You will want to understand what all of the different rates and fees will be–and how this will ultimately affect how much you pay monthly and for the long term–by weighing out the pros and cons before signing any permanent agreement.
Article Source: http://www.thearticleinsiders.com
Refinance ~ Selecting the Most Ideal Time to Refinance ~ refinancing
Many fiscal issues influence the direction of interest rates.....
.....Refinance, refinancing, mortgage refinancing, home loan refinance, home loan, mortgage brokers....."
Deciding upon the best time to refinance the loan on your home isn't as simple as it seems. Present interest rates aren't the only factor that contribute towards your decision to refinance at a certain point in time. A variety of factors play an important role in whether or not the best time to refinance is now or later.
Economic Environment
The current economic situation can affect your decision to refinance.
Many fiscal issues influence the direction of interest rates. When consumer expenditure levels are high, prices go up in keeping with the laws of demand and supply. During such times, the government boostsinterest rates to reduce the inflation rate. As a rule, when the rates of interest increase, consumers spend less. The resulting drop in demand therefore results in a lowering of prices.
Conversely, in times when the economy is slow, it may be decided to drop interest rates as a means of encouraging consumer spending. For a number of people in many situations, when interest rates fall due to a drop in consumer expenditure, it is a good time to refinance and enjoy the benefits of lower interest rates.
Your Credit Score
Before starting to apply for refinancing funding, pull a copy of your credit score from the three primary credit offices and verify that the information on it is correct. If there are mistakes on your credit reports, particularly those that negatively impact your credit, get them corrected before you apply for financing.
If you know your credit score when you approach potential mortgage lenders, generally they can give you a hint of what type of interest rate you could receive with a refinance mortgage. This can save you a lot of unnecessary time, filling out paperwork if you aren't likely to qualify for a better interest rate than the one on your current mortgage in the first place.
Age of Current Loan
Mortgage lenders disapprove of borrowers who refinance frequently. Usually, you should keep a mortgage loan for at least four years before looking at refinancing.
Bear in mind also that there are closing costs associated with refinancing your mortgage loan. If you haven't had your current loan for a long time, the savings you realize from a small drop in interest rates might not make up for the closing cost expense.
Other Considerations
It may be worth your while to refinance if there has been a significant rise in the market value of your home. If you need ready money for a major purchase, or you are paying a high interest rate on the debt on your credit cards, automobile loans, or some other type of debt, it would be sensible to refinance and take equity from your home to pay off those other expenses.
If your financial situation has changed appreciably in a positive way, since you got your previous mortgage, you may want to consider refinancing. If you have received a large raise or completed credit rehabilitation, you may possibly qualify for a better interest rate now, regardless of the economic environment.
In Conclusion
Ensure thatyou are aware of the full cost of refinancing your home. Refinancing is never worthwhile unless your interest rate is going to drop by 2% or more. Also be sure that you are aware of all of the costs associated with refinancing. Is there a penalty for early settlement of your current mortgage? What are the closing costs? Always shop around to be sure that your lender is offering the best available interest rate and closing cost terms.
"..... If you have received a large raise or completed credit rehabilitation, you may possibly qualify for....."
Article Source: http://www.searchnfindarticles.com
.....Refinance, refinancing, mortgage refinancing, home loan refinance, home loan, mortgage brokers....."
Deciding upon the best time to refinance the loan on your home isn't as simple as it seems. Present interest rates aren't the only factor that contribute towards your decision to refinance at a certain point in time. A variety of factors play an important role in whether or not the best time to refinance is now or later.
Economic Environment
The current economic situation can affect your decision to refinance.
Many fiscal issues influence the direction of interest rates. When consumer expenditure levels are high, prices go up in keeping with the laws of demand and supply. During such times, the government boostsinterest rates to reduce the inflation rate. As a rule, when the rates of interest increase, consumers spend less. The resulting drop in demand therefore results in a lowering of prices.
Conversely, in times when the economy is slow, it may be decided to drop interest rates as a means of encouraging consumer spending. For a number of people in many situations, when interest rates fall due to a drop in consumer expenditure, it is a good time to refinance and enjoy the benefits of lower interest rates.
Your Credit Score
Before starting to apply for refinancing funding, pull a copy of your credit score from the three primary credit offices and verify that the information on it is correct. If there are mistakes on your credit reports, particularly those that negatively impact your credit, get them corrected before you apply for financing.
If you know your credit score when you approach potential mortgage lenders, generally they can give you a hint of what type of interest rate you could receive with a refinance mortgage. This can save you a lot of unnecessary time, filling out paperwork if you aren't likely to qualify for a better interest rate than the one on your current mortgage in the first place.
Age of Current Loan
Mortgage lenders disapprove of borrowers who refinance frequently. Usually, you should keep a mortgage loan for at least four years before looking at refinancing.
Bear in mind also that there are closing costs associated with refinancing your mortgage loan. If you haven't had your current loan for a long time, the savings you realize from a small drop in interest rates might not make up for the closing cost expense.
Other Considerations
It may be worth your while to refinance if there has been a significant rise in the market value of your home. If you need ready money for a major purchase, or you are paying a high interest rate on the debt on your credit cards, automobile loans, or some other type of debt, it would be sensible to refinance and take equity from your home to pay off those other expenses.
If your financial situation has changed appreciably in a positive way, since you got your previous mortgage, you may want to consider refinancing. If you have received a large raise or completed credit rehabilitation, you may possibly qualify for a better interest rate now, regardless of the economic environment.
In Conclusion
Ensure thatyou are aware of the full cost of refinancing your home. Refinancing is never worthwhile unless your interest rate is going to drop by 2% or more. Also be sure that you are aware of all of the costs associated with refinancing. Is there a penalty for early settlement of your current mortgage? What are the closing costs? Always shop around to be sure that your lender is offering the best available interest rate and closing cost terms.
"..... If you have received a large raise or completed credit rehabilitation, you may possibly qualify for....."
Article Source: http://www.searchnfindarticles.com
Consider Other Foreclosure Options if a Refinance is Unavailable
Some borrowers believe that refinancing is a worthwhile option when they are attempting to prevent foreclosure. This is generally a good idea, if there is equity in your home and if you get a new loan before your credit is damaged from the missed payments. The problem is that many homeowners do not get placed into this category. In general, foreclosure victims have very bad credit and no equity. This means that the majority of homeowners facing foreclosure and wasting important alternative opportunities trying to find a foreclosure loan.
A better solution is a loan modification with your existing lender. This is when the terms of your existing mortgage are altered to produce a lower monthly payment. In reality, it is just like a refinance, but your credit and equity are not a large determining factor, like a refinance. In most cases, the interest rate is reduced and the term of the loan is re-amortized to a 30 year fixed rate. In some cases, the principal loan amount is even reduced to reach the target payment.
In some cases, simply asking your lender for a loan modification will work. But more often than not, you will need to hire a professional bargainer to work on your behalf. When you hire a professional, make sure you do not pay cash up front, or if you do, it is placed into an escrow account until the case is complete. If you do not get results, you should not have to pay for their efforts! Do your research and be careful not to get taken advantage of. New laws are in place to protect borrowers, but criminals will always be there to steal your money if you allow them.
When negotiating with your lender, you will have to complete a loss mitigation package when attempting your loan modification. This will help them ascertain your qualifications. This is where a professional will come in handy, since getting rejected can be irreversible. It is important to submit a package that is complete and can be approved without delay. You may be asked to demonstrate proof of income, as you did when you obtained the original loan. Whether or not things have changed with your income is one of the things that the companies will look at.
If the value of your home has fallen and you are "underwater" in your loan, then you need to decide if keeping your property is even the best decision. As I said earlier, you may qualify for a loan modification with a principal reduction, but selling the property may be your best bet. When you are underwater in your mortgage, a short sale can be an easy way out. A short sale is when the property is sold for less than the total amount and the bank forgives the difference.
Short sales can be tricky anyway, because your lender will not easily agree to this solution and may pursue a deficiency judgment after the home sells. It is very important to get your agreement in writing and to make sure they waive their right to pursue this deficiency judgment at a later day. We never recommend borrowers attempting a short sale on their own. Professional short sale negotiators or real estate agents specializing in this type of sale are available at little or no charge to the borrower, so take advantage and make sure your rights are protected.
Regardless of what you decide, it is important to know that you have options and allowing the property to go to foreclosure is rarely a good idea. Your credit will be ruined for the next decade and buying a new home will be virtually impossible unless you have recuperated. Do not be afraid to ask for help or retain a professional to help you through these rough times.
A better solution is a loan modification with your existing lender. This is when the terms of your existing mortgage are altered to produce a lower monthly payment. In reality, it is just like a refinance, but your credit and equity are not a large determining factor, like a refinance. In most cases, the interest rate is reduced and the term of the loan is re-amortized to a 30 year fixed rate. In some cases, the principal loan amount is even reduced to reach the target payment.
In some cases, simply asking your lender for a loan modification will work. But more often than not, you will need to hire a professional bargainer to work on your behalf. When you hire a professional, make sure you do not pay cash up front, or if you do, it is placed into an escrow account until the case is complete. If you do not get results, you should not have to pay for their efforts! Do your research and be careful not to get taken advantage of. New laws are in place to protect borrowers, but criminals will always be there to steal your money if you allow them.
When negotiating with your lender, you will have to complete a loss mitigation package when attempting your loan modification. This will help them ascertain your qualifications. This is where a professional will come in handy, since getting rejected can be irreversible. It is important to submit a package that is complete and can be approved without delay. You may be asked to demonstrate proof of income, as you did when you obtained the original loan. Whether or not things have changed with your income is one of the things that the companies will look at.
If the value of your home has fallen and you are "underwater" in your loan, then you need to decide if keeping your property is even the best decision. As I said earlier, you may qualify for a loan modification with a principal reduction, but selling the property may be your best bet. When you are underwater in your mortgage, a short sale can be an easy way out. A short sale is when the property is sold for less than the total amount and the bank forgives the difference.
Short sales can be tricky anyway, because your lender will not easily agree to this solution and may pursue a deficiency judgment after the home sells. It is very important to get your agreement in writing and to make sure they waive their right to pursue this deficiency judgment at a later day. We never recommend borrowers attempting a short sale on their own. Professional short sale negotiators or real estate agents specializing in this type of sale are available at little or no charge to the borrower, so take advantage and make sure your rights are protected.
Regardless of what you decide, it is important to know that you have options and allowing the property to go to foreclosure is rarely a good idea. Your credit will be ruined for the next decade and buying a new home will be virtually impossible unless you have recuperated. Do not be afraid to ask for help or retain a professional to help you through these rough times.
Article Source: http://www.moneyarticlelibrary.com
Types of VA Refinance Mortgages
VA home mortgages are a benefit available exclusively to those who have served our country; this includes eligible veterans and men and women currently in the military. In addition to their exclusivity, these loans also require no down payment and no mortgage insurance. These two factors save applicants money and leave them with more money for other expenses, such as other bills, home maintenance, or personal necessities. This type of financing has flexible credit requirements, so veterans and service members are more likely to qualify for the loans.
Cash-Out Refinance Loan
If a homeowner has sufficient equity built in his or her home, he or she can use a cash-out refinance to turn the equity into cash to be used however he or she pleases. There are no restrictions on how the cash is used. When refinancing with this loan, a homeowner can take out a loan for a higher amount than his or her current mortgage and receive whatever is left over, after paying off the existing mortgage, in the form of cash. The cash can be used to pay off debt, pay for home repairs or maintenance, or pay for personal expenses.
Homeowners who find themselves in a significant amount of debt may find an encouraging solution in the cash-out option. With this loan, a homeowner can combine some or all of his or her debt into one loan. Doing this could lower his or her monthly costs. Instead of receiving multiple bills and paying different lenders, a homeowner could consolidate many payments into one. Consolidating debt can not only reduce monthly costs, but it can also help simplify the process of paying bills each month.
Rate/Term Refinance Loan
A homeowner who would like to refinance his or her current conventional mortgage can switch from a conventional loan to a VA mortgage using the rate/term refinance option. Refinancing can give the homeowner a lower, fixed interest rate, which would also lower his or her monthly mortgage payment. Refinancing with this type of financing would also give the homeowner access to all of the other great benefits of a VA home mortgage, including no mortgage insurance.
Interest Rate Reduction Refinance Loan (IRRRL)
Another refinancing option is the Interest Rate Reduction Refinance Loan. This is a streamlined option known for its quick processing. It allows a homeowner who already has a VA loan to lower his or her rate, which will in turn lower the loan's monthly mortgage payment. Other terms of the loan can also be change, if desired.
If interest rates decrease after a homeowner has taken out a VA mortgage, the IRRRL can be used to lower his or her rate quickly and easily. Homeowners can also use an IRRRL to switch from an adjustable interest rate to a fixed rate or to change the length of their loans to better suit their needs.
A VA refinance mortgage can be used to procure a lower interest rate, consolidate debt, receive extra cash, and/or to change the terms of a homeowner's original mortgage. With rates low, it is a great time to take advantage of this exclusive benefit.
Cash-Out Refinance Loan
If a homeowner has sufficient equity built in his or her home, he or she can use a cash-out refinance to turn the equity into cash to be used however he or she pleases. There are no restrictions on how the cash is used. When refinancing with this loan, a homeowner can take out a loan for a higher amount than his or her current mortgage and receive whatever is left over, after paying off the existing mortgage, in the form of cash. The cash can be used to pay off debt, pay for home repairs or maintenance, or pay for personal expenses.
Homeowners who find themselves in a significant amount of debt may find an encouraging solution in the cash-out option. With this loan, a homeowner can combine some or all of his or her debt into one loan. Doing this could lower his or her monthly costs. Instead of receiving multiple bills and paying different lenders, a homeowner could consolidate many payments into one. Consolidating debt can not only reduce monthly costs, but it can also help simplify the process of paying bills each month.
Rate/Term Refinance Loan
A homeowner who would like to refinance his or her current conventional mortgage can switch from a conventional loan to a VA mortgage using the rate/term refinance option. Refinancing can give the homeowner a lower, fixed interest rate, which would also lower his or her monthly mortgage payment. Refinancing with this type of financing would also give the homeowner access to all of the other great benefits of a VA home mortgage, including no mortgage insurance.
Interest Rate Reduction Refinance Loan (IRRRL)
Another refinancing option is the Interest Rate Reduction Refinance Loan. This is a streamlined option known for its quick processing. It allows a homeowner who already has a VA loan to lower his or her rate, which will in turn lower the loan's monthly mortgage payment. Other terms of the loan can also be change, if desired.
If interest rates decrease after a homeowner has taken out a VA mortgage, the IRRRL can be used to lower his or her rate quickly and easily. Homeowners can also use an IRRRL to switch from an adjustable interest rate to a fixed rate or to change the length of their loans to better suit their needs.
A VA refinance mortgage can be used to procure a lower interest rate, consolidate debt, receive extra cash, and/or to change the terms of a homeowner's original mortgage. With rates low, it is a great time to take advantage of this exclusive benefit.
Article Source: http://www.happy-living-articles.com
Home Loan Refinance Information
If you have a home loan and you think that your property went up in value by ten percent or more since you took out your current loan, you might be a good candidate to refinance. It can save you loads of money on your mortgage payments, improve your terms, or both.
The bank uses your home as collateral for the loan when you take out a home loan. So the more expensive the collateral is, the lower will be the bank's risk that you may default on the loan and walk away from that collateral.
If the collateral grows in value over the years and the bank's risk is reduced, then you are able to qualify for a lower rate. And if your home went up in value by ten percent or more, banks will have to consider your home loan to be a less risky investment and would offer you a lower rate. This is, of course, assuming that you have the same job and income, made all payments on time, and your market interest rates are the same or lower.
Lower interest rate can indeed benefit you in several ways. You can either go for a home loan refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner.
Before having to home loan refinance, you have to consider the cost of doing it and then compare it to your savings. If it would cost you $5,000 to refinance and you have $25 savings per month then it would surely not be worth it because it will take you over 16 years to just break even. But if you have $250 savings per month or 5 years worth of mortgage payments, then it would be good move to refinance your home loan.
And so, before you apply for a home loan, it is important to ask for copies of your credit reports and review them carefully for any errors. If there are errors, you will need to immediately dispute the errors with each credit agency.
Another helpful tip is to do comparison shopping for a mortgage, as it will help you find the best home loan offer. The Internet is a wonderful tool for locating and comparing mortgage offers quickly. You can quickly screen mortgage loans from dozens of lenders with just a little time and effort.
The one too common mistake homeowners make when having to home loan refinance is rushing through and accepting the first promising offer they receive. But if you take the time to learn mortgage terminology, you will be able to understand the home loan offers you consider. Just remember, don't rush your financial decisions and you can save yourself money and future financial problems.
The bank uses your home as collateral for the loan when you take out a home loan. So the more expensive the collateral is, the lower will be the bank's risk that you may default on the loan and walk away from that collateral.
If the collateral grows in value over the years and the bank's risk is reduced, then you are able to qualify for a lower rate. And if your home went up in value by ten percent or more, banks will have to consider your home loan to be a less risky investment and would offer you a lower rate. This is, of course, assuming that you have the same job and income, made all payments on time, and your market interest rates are the same or lower.
Lower interest rate can indeed benefit you in several ways. You can either go for a home loan refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner.
Before having to home loan refinance, you have to consider the cost of doing it and then compare it to your savings. If it would cost you $5,000 to refinance and you have $25 savings per month then it would surely not be worth it because it will take you over 16 years to just break even. But if you have $250 savings per month or 5 years worth of mortgage payments, then it would be good move to refinance your home loan.
And so, before you apply for a home loan, it is important to ask for copies of your credit reports and review them carefully for any errors. If there are errors, you will need to immediately dispute the errors with each credit agency.
Another helpful tip is to do comparison shopping for a mortgage, as it will help you find the best home loan offer. The Internet is a wonderful tool for locating and comparing mortgage offers quickly. You can quickly screen mortgage loans from dozens of lenders with just a little time and effort.
The one too common mistake homeowners make when having to home loan refinance is rushing through and accepting the first promising offer they receive. But if you take the time to learn mortgage terminology, you will be able to understand the home loan offers you consider. Just remember, don't rush your financial decisions and you can save yourself money and future financial problems.
Article Source: http://www.articlecall.com
Refinancing Home Mortgage: Understanding Your Options
Are you considering refinancing your home mortgage? You’re not alone these days. The drop in interest rates and turbulence in the housing market has made refinancing home mortgages a very popular option. There are several reasons for seriously considering a mortgage refinance, and each of them suggests choosing a particular option for doing so.
Refinancing your home mortgage for a lower interest rate. Historically, the most common reason for doing a mortgage refinance is to take advantage of a lower interest rate. Over the past several years, home buyers often took primary mortgages with higher interest rates with the expectation that they could refinance when their circumstances changed enough to qualify them for a lower interest rate. This is an especially attractive option for young professionals at the start of their careers who expect to be earning better wages a few years down the line.
Refinancing your mortgage can decrease your monthly payment. There are two ways to use a mortgage refinance to lower your monthly mortgage payment. Obviously, refinancing into a lower interest mortgage will reduce your monthly payments if all other terms remain the same. You can also refinance into a longer term loan. This option reduces your monthly payment by spreading out your remaining payments over more months, making each installment lower. Be aware, though, that refinancing into a longer mortgage may reduce your monthly payment, but it will almost inevitably increase the amount of interest that you pay overall. In fact, moving from a 20 year mortgage to a 30 year mortgage, even at a lower rate, can potentially increase the real cost of your new home by tens of thousands of dollars.
Refinance from an adjustable rate mortgage to a fixed rate mortgage. Many borrowers opt for an adjustable rate mortgage in order to qualify for lower interest rates for the first two to five years of their loan. Historically, this has allowed new home buyers time to build equity in their homes along with building their credit to qualify for lower interest rates on fixed rate mortgages.
Refinancing from an adjustable rate mortgage to a fixed rate mortgage offers one major advantage – your mortgage rate will not change over the entire life of the loan. That means that your mortgage payment will be immune to fluctuations in interest rates, making it easier to budget and manage your money. If interest rates rise, you’ll be saving money. If they fall in the future, you may be in a position to refinance into a lower interest rate.
Refinance your mortgage with a cash-out loan. A cash-out refinance gives you access to cash that’s tied up in the equity of your home. If the current value of your home is more than the amount that you still owe on your mortgage, a cash-out refinance can put cash in your hands when you need it. Essentially, you take out a mortgage for any amount greater than your mortgage and up to the full value of your home. After you pay off your current mortgage and any fees associated with the refinancing, the additional cash is yours to use as you need it. In many cases, lenders are willing to loan as much as 125% of the equity you have in your home.
Do keep in mind, though, that the “extra” cash is not a gift. It’s a loan on which you’ll be paying interest, and can potentially increase the length of time it will take you to pay off your home and own it free and clear.
Refinance your mortgage to finish paying off your home sooner. While most people think of refinancing their mortgage as a way to decrease their monthly mortgage payments or lower their interest rates, there is another good reason to refinance – to pay off your mortgage sooner. If your circumstances have changed since your original mortgage and you can afford to pay a higher monthly payment, it makes good financial sense to refinance into a shorter term mortgage, even if you have to take a higher interest rate to do it. The difference in overall cost between a thirty year fixed rate mortgage and a fifteen or twenty year fixed rate mortgage is substantial. If you’re planning to stay in your home for the long term, and can afford higher payments, you could be out of debt ten to fifteen years sooner and save tens of thousands of dollars in interest payments.
Take advantage of the Making Home Affordable Program for refinancing your mortgage.
Thanks to the economic downturn and the collapse of home prices, many homeowners are ‘underwater’ on their mortgages – owing more on their mortgage than their home is currently worth on the market. That makes it impossible for them to refinance their mortgages, even if they have good credit. The federal government has established the Making Home Affordable program to assist those who are in this situation by making special incentives available to lenders who refinance those loans.
Article Source: http://www.article-buzz.com
Refinancing your home mortgage for a lower interest rate. Historically, the most common reason for doing a mortgage refinance is to take advantage of a lower interest rate. Over the past several years, home buyers often took primary mortgages with higher interest rates with the expectation that they could refinance when their circumstances changed enough to qualify them for a lower interest rate. This is an especially attractive option for young professionals at the start of their careers who expect to be earning better wages a few years down the line.
Refinancing your mortgage can decrease your monthly payment. There are two ways to use a mortgage refinance to lower your monthly mortgage payment. Obviously, refinancing into a lower interest mortgage will reduce your monthly payments if all other terms remain the same. You can also refinance into a longer term loan. This option reduces your monthly payment by spreading out your remaining payments over more months, making each installment lower. Be aware, though, that refinancing into a longer mortgage may reduce your monthly payment, but it will almost inevitably increase the amount of interest that you pay overall. In fact, moving from a 20 year mortgage to a 30 year mortgage, even at a lower rate, can potentially increase the real cost of your new home by tens of thousands of dollars.
Refinance from an adjustable rate mortgage to a fixed rate mortgage. Many borrowers opt for an adjustable rate mortgage in order to qualify for lower interest rates for the first two to five years of their loan. Historically, this has allowed new home buyers time to build equity in their homes along with building their credit to qualify for lower interest rates on fixed rate mortgages.
Refinancing from an adjustable rate mortgage to a fixed rate mortgage offers one major advantage – your mortgage rate will not change over the entire life of the loan. That means that your mortgage payment will be immune to fluctuations in interest rates, making it easier to budget and manage your money. If interest rates rise, you’ll be saving money. If they fall in the future, you may be in a position to refinance into a lower interest rate.
Refinance your mortgage with a cash-out loan. A cash-out refinance gives you access to cash that’s tied up in the equity of your home. If the current value of your home is more than the amount that you still owe on your mortgage, a cash-out refinance can put cash in your hands when you need it. Essentially, you take out a mortgage for any amount greater than your mortgage and up to the full value of your home. After you pay off your current mortgage and any fees associated with the refinancing, the additional cash is yours to use as you need it. In many cases, lenders are willing to loan as much as 125% of the equity you have in your home.
Do keep in mind, though, that the “extra” cash is not a gift. It’s a loan on which you’ll be paying interest, and can potentially increase the length of time it will take you to pay off your home and own it free and clear.
Refinance your mortgage to finish paying off your home sooner. While most people think of refinancing their mortgage as a way to decrease their monthly mortgage payments or lower their interest rates, there is another good reason to refinance – to pay off your mortgage sooner. If your circumstances have changed since your original mortgage and you can afford to pay a higher monthly payment, it makes good financial sense to refinance into a shorter term mortgage, even if you have to take a higher interest rate to do it. The difference in overall cost between a thirty year fixed rate mortgage and a fifteen or twenty year fixed rate mortgage is substantial. If you’re planning to stay in your home for the long term, and can afford higher payments, you could be out of debt ten to fifteen years sooner and save tens of thousands of dollars in interest payments.
Take advantage of the Making Home Affordable Program for refinancing your mortgage.
Thanks to the economic downturn and the collapse of home prices, many homeowners are ‘underwater’ on their mortgages – owing more on their mortgage than their home is currently worth on the market. That makes it impossible for them to refinance their mortgages, even if they have good credit. The federal government has established the Making Home Affordable program to assist those who are in this situation by making special incentives available to lenders who refinance those loans.
Article Source: http://www.article-buzz.com
FHA Streamline Refinance Saves Money!
An FHA streamline refinance has multiple benefits for homeowners who want to refinance their current FHA mortgages. One of these benefits includes a lower interest rate. A lower interest rate, along with the other benefits of the loan, will save homeowners money that they can use to pay off other debt or to pay for other expenses.
What is an FHA Streamline Refinance?
The purpose of this type of financing is to lower a homeowner's interest rate on his or her loan and, in turn, lower his or her monthly mortgage payment. This loan allows homeowners to refinance their existing home loans with a more efficient process. With this type of financing, there is less documentation and less underwriting, which can make the loan process significantly quicker. There is also an option to refinance with this type of loan without having to get an appraisal, as long as certain requirements are met. If no appraisal is done, the new loan amount cannot be more than the original loan that was taken out by the homeowner.
Requirements of this Loan
A homeowner must already have an FHA mortgage that is current in order to qualify for this type of financing. This means there can be no delinquent payments on the mortgage. With this particular type of financing, no additional cash can be taken out. If a homeowner would like to receive cash back when refinancing his or her loan, there is a cash-out refinance option available, but this option is not a streamline loan.
There are closing costs associated with this loan, but a homeowner has options that allow him or her to avoid paying them out of pocket. In some instances, homeowners can choose to obtain a higher rate in exchange for lower closing costs. On the other hand, if there is sufficient equity in the home, a homeowner can decide to have the closing costs included in the new loan amount. An appraisal will determine if there is an adequate amount of home equity for the homeowner to choose this option.
Benefits of this Type of Financing
Refinancing with this loan can lower a homeowner's rate and monthly payment and save him or her money over time. This type of loan has more efficient processing when compared with other home loans. It can have fewer requirements, and, in some cases, the closing costs can be financed so homeowners will have less money to pay upfront. This saves them more money for their other expenses.
There are not strict eligibility requirements for this type of financing. Homeowners do not need a high credit score or income to qualify for this loan, but most lenders will require that a borrower have a credit score of at least 620. For homeowners who would like more refinancing options besides the streamline refinance, the FHA also has refinance loans that allow a homeowner to consolidate debt, change the terms of his or her loan or receive cash back.
This type of financing is a great option for current homeowners who want a quick way to reduce their current interest rates and lower their monthly payments without having to meet all of the standard requirements for a home refinance loan.
What is an FHA Streamline Refinance?
The purpose of this type of financing is to lower a homeowner's interest rate on his or her loan and, in turn, lower his or her monthly mortgage payment. This loan allows homeowners to refinance their existing home loans with a more efficient process. With this type of financing, there is less documentation and less underwriting, which can make the loan process significantly quicker. There is also an option to refinance with this type of loan without having to get an appraisal, as long as certain requirements are met. If no appraisal is done, the new loan amount cannot be more than the original loan that was taken out by the homeowner.
Requirements of this Loan
A homeowner must already have an FHA mortgage that is current in order to qualify for this type of financing. This means there can be no delinquent payments on the mortgage. With this particular type of financing, no additional cash can be taken out. If a homeowner would like to receive cash back when refinancing his or her loan, there is a cash-out refinance option available, but this option is not a streamline loan.
There are closing costs associated with this loan, but a homeowner has options that allow him or her to avoid paying them out of pocket. In some instances, homeowners can choose to obtain a higher rate in exchange for lower closing costs. On the other hand, if there is sufficient equity in the home, a homeowner can decide to have the closing costs included in the new loan amount. An appraisal will determine if there is an adequate amount of home equity for the homeowner to choose this option.
Benefits of this Type of Financing
Refinancing with this loan can lower a homeowner's rate and monthly payment and save him or her money over time. This type of loan has more efficient processing when compared with other home loans. It can have fewer requirements, and, in some cases, the closing costs can be financed so homeowners will have less money to pay upfront. This saves them more money for their other expenses.
There are not strict eligibility requirements for this type of financing. Homeowners do not need a high credit score or income to qualify for this loan, but most lenders will require that a borrower have a credit score of at least 620. For homeowners who would like more refinancing options besides the streamline refinance, the FHA also has refinance loans that allow a homeowner to consolidate debt, change the terms of his or her loan or receive cash back.
This type of financing is a great option for current homeowners who want a quick way to reduce their current interest rates and lower their monthly payments without having to meet all of the standard requirements for a home refinance loan.
Article Source: http://www.happy-living-articles.com
The Bank's Dirty Little Secrets They Won't Tell You And Don't Want You To Know
What the bank won't tell you when you renew or refinance your home is that they are giving you a higher rate of interest than new customers.
Most people believe that if you are loyal to one bank, pay your mortgage on time, and keep all your other business such as investments and insurance with that bank that you will reap the benefits of lower rates but in reality the exact opposite is true. The bank knows that most customers don't have any intention of shopping around because they assume they are being treated fair. They also know that a customer will experience anxiety when trying to negotiate and as a result won't try, so instead of providing their good customers with their best rates they reserve those rates to attract new customers.
The bank trains its staff to offer as good a rate as necessary to get your business. All mortgage specialists working for the banks are on a bonus program. By not offering the best rates whenever possible the bank makes more money and is willing to share some of this with their mortgage specialists. When you think these people are doing you a favour in actuality they are costing you thousands of dollars. I think this policy is outrageous because the bank is profiting on your trust.
The good news is that there is a very simple solution. Use a mortgage broker to look out for your financial interests.
When you buy a house you have a trained professional dealing with the sellers and their agents to look out for your interests, you also have a lawyer to look out for your legal interests and it also makes sense to use a mortgage broker to protect your financial interests. A mortgage broker deals with all the top lenders and also some specialized situations. With the right broker you will deal with a person that is working for you and not the lending institution. He will arrange the right mortgage for you and your situation and the best part is that in most cases you will get the best rates at no cost to you.
If you are self employed and need a mortgage, a broker will have lenders that specialize in these products. Lenders know that as a self employed person you legally write down your income to pay the least amount of tax and they are willing to accept declared income.
If you have little or no down payment there will be lenders to qualify you for a house or
If you are new to the country he will have lenders that specialize in this scenario and will be able to get you a mortgage.
If you have credit issues he will have lenders for this situation or if you just need to refinance or renew your mortgage this specialist will meet with you and help you determine which option will save you the most money.
The best part is that all these services are available at no cost because a mortgage broker receives a commission from the lending institution that you sign your mortgage with.
When you deal with a mortgage broker you have someone who specializes in this field and someone who is in your corner who has your best interests at heart. When you are making such an important decision that can make a difference of thousands of dollars it is a relief to know that you knew all your options and were able to choose the one that was best for you.
Most people believe that if you are loyal to one bank, pay your mortgage on time, and keep all your other business such as investments and insurance with that bank that you will reap the benefits of lower rates but in reality the exact opposite is true. The bank knows that most customers don't have any intention of shopping around because they assume they are being treated fair. They also know that a customer will experience anxiety when trying to negotiate and as a result won't try, so instead of providing their good customers with their best rates they reserve those rates to attract new customers.
The bank trains its staff to offer as good a rate as necessary to get your business. All mortgage specialists working for the banks are on a bonus program. By not offering the best rates whenever possible the bank makes more money and is willing to share some of this with their mortgage specialists. When you think these people are doing you a favour in actuality they are costing you thousands of dollars. I think this policy is outrageous because the bank is profiting on your trust.
The good news is that there is a very simple solution. Use a mortgage broker to look out for your financial interests.
When you buy a house you have a trained professional dealing with the sellers and their agents to look out for your interests, you also have a lawyer to look out for your legal interests and it also makes sense to use a mortgage broker to protect your financial interests. A mortgage broker deals with all the top lenders and also some specialized situations. With the right broker you will deal with a person that is working for you and not the lending institution. He will arrange the right mortgage for you and your situation and the best part is that in most cases you will get the best rates at no cost to you.
If you are self employed and need a mortgage, a broker will have lenders that specialize in these products. Lenders know that as a self employed person you legally write down your income to pay the least amount of tax and they are willing to accept declared income.
If you have little or no down payment there will be lenders to qualify you for a house or
If you are new to the country he will have lenders that specialize in this scenario and will be able to get you a mortgage.
If you have credit issues he will have lenders for this situation or if you just need to refinance or renew your mortgage this specialist will meet with you and help you determine which option will save you the most money.
The best part is that all these services are available at no cost because a mortgage broker receives a commission from the lending institution that you sign your mortgage with.
When you deal with a mortgage broker you have someone who specializes in this field and someone who is in your corner who has your best interests at heart. When you are making such an important decision that can make a difference of thousands of dollars it is a relief to know that you knew all your options and were able to choose the one that was best for you.
Article Source: http://finance-cp.com
Five Reasons to Consider a Remortgage
Gone are the days when we took out a mortgage and stuck with it for life, until the debt had been completely repaid. The remortgage market is big business these days, and taking a look at the options available could considerably improve your finances. What are some of the reasons for considering switching your mortgage?
1) Get a better deal: Are you sure that your current mortgage is the best one you can get? The market is very competitive and mortgage providers are desperate to attract new business, usually by offering special deals to people who switch their mortgage over to them. As well as aiming for a lower interest rate and lower monthly repayments, remortgaging could net you other benefits such as cash back, free home insurance, or other valuable extras depending on the deal.
2) Lock in a low rate: Interest rates are at historic lows, even taking into account the recent rise. Many experts are predicting that rates will begin to rise again over the next few months and years, leading to more expensive mortgages. By replacing your variable rate mortgage with one that has a rate fixed for a few years, you can protect yourself against future rises in the interest rate.
3) Release equity: As house prices have gone through the roof over the last decade or so, many people find that they are sitting on a large amount of equity in their home - the difference between how much their house is worth and what the outstanding mortgage balance is. Taking out a remortgage that will pay off your current mortgage and also give you some extra funds is an effective way of unlocking some of this stored wealth, providing you with the funds you need for home improvements, a holiday or wedding, or any other large expense. It is often cheaper to raise the money with a remortgage than by, for example, taking out a personal loan.
4) Debt consolidation: It's well known that the public as a whole are in debt to a level never seen before, with easy access to relatively cheap credit providing the temptation to 'live now and pay later'. Nonetheless, the money has to be repaid at some time, and credit cards and the like aren't an ideal way of obtaining long term credit. Taking out a remortgage large enough to cover both your mortgage and your other debts will simplify your finances, leaving you with a single monthly repayment to make, which will usually be for a smaller amount than your total repayments at the moment.
5) Change your mortgage type: People's circumstances change over time, and what might have been an ideal mortgage a few years ago when you took it out might not be the most suitable for your current needs. Maybe you want to switch from an interest-only mortgage to a capital repayment one, or you might want to take advantage of some of the more recent features of mortgages such as flexible payments or offsetting - a remortgage can give you the chance to get a deal more in tune with your current circumstances.
Bearing all the above in mind, a remortgage might seem like an ideal way forward for restructuring your finances. It's important to remember though that the decision to remortgage is not to be taken lightly, as you could potentially be putting your home at risk if you get it wrong, and so it's essential to seek the advice of a properly qualified mortgage advisor if you are in any doubt.
1) Get a better deal: Are you sure that your current mortgage is the best one you can get? The market is very competitive and mortgage providers are desperate to attract new business, usually by offering special deals to people who switch their mortgage over to them. As well as aiming for a lower interest rate and lower monthly repayments, remortgaging could net you other benefits such as cash back, free home insurance, or other valuable extras depending on the deal.
2) Lock in a low rate: Interest rates are at historic lows, even taking into account the recent rise. Many experts are predicting that rates will begin to rise again over the next few months and years, leading to more expensive mortgages. By replacing your variable rate mortgage with one that has a rate fixed for a few years, you can protect yourself against future rises in the interest rate.
3) Release equity: As house prices have gone through the roof over the last decade or so, many people find that they are sitting on a large amount of equity in their home - the difference between how much their house is worth and what the outstanding mortgage balance is. Taking out a remortgage that will pay off your current mortgage and also give you some extra funds is an effective way of unlocking some of this stored wealth, providing you with the funds you need for home improvements, a holiday or wedding, or any other large expense. It is often cheaper to raise the money with a remortgage than by, for example, taking out a personal loan.
4) Debt consolidation: It's well known that the public as a whole are in debt to a level never seen before, with easy access to relatively cheap credit providing the temptation to 'live now and pay later'. Nonetheless, the money has to be repaid at some time, and credit cards and the like aren't an ideal way of obtaining long term credit. Taking out a remortgage large enough to cover both your mortgage and your other debts will simplify your finances, leaving you with a single monthly repayment to make, which will usually be for a smaller amount than your total repayments at the moment.
5) Change your mortgage type: People's circumstances change over time, and what might have been an ideal mortgage a few years ago when you took it out might not be the most suitable for your current needs. Maybe you want to switch from an interest-only mortgage to a capital repayment one, or you might want to take advantage of some of the more recent features of mortgages such as flexible payments or offsetting - a remortgage can give you the chance to get a deal more in tune with your current circumstances.
Bearing all the above in mind, a remortgage might seem like an ideal way forward for restructuring your finances. It's important to remember though that the decision to remortgage is not to be taken lightly, as you could potentially be putting your home at risk if you get it wrong, and so it's essential to seek the advice of a properly qualified mortgage advisor if you are in any doubt.
Article Source: http://www.articleshowroom.com
The Benefits of Refinancing a Mortgage
How can refinancing a mortgage benefit you? The answer to that question depends a great deal on your individual circumstances, but there are a number of different ways that a mortgage refinance can help you achieve your financial goals or otherwise make your life better. Whether you choose to refinance into a longer term or trade in your outgrown adjustable rate mortgage for a fixed rate mortgage, there are benefits to be gained from refinancing a mortgage.
Refinancing your mortgage can reduce your monthly payments.
One reason that people refinance their mortgages is to reduce the amount of money they pay out each month as a mortgage payment. There are several different ways to accomplish this. The one that you choose will depend upon your financial circumstances.
• Refinance into a lower interest rate. If your credit score has improved since you took out your current mortgage, you may qualify for a lower interest rate on a new mortgage. Your credit score or credit rating is fluid, and will change over time as you build up a history of making on time payments on various loans and credit accounts. Thus, if you’ve made a couple of years of payments on your mortgage and credit cards without defaulting on any loans or making late payments, your credit history could conceivably have improved enough to earn you a lower interest rate if you choose to refinance. Since you’ll have a lower interest rate, you’ll have a lower total mortgage amount, and likely a lower mortgage repayment.
• Refinance to lengthen the amount of time you have to repay your loan.Another way to reduce your monthly payment is to refinance your mortgage into one with a longer term. Most financial advisors would recommend against refinancing for a longer term, because it will nearly always increase the amount you’ll pay for your mortgage overall. If you’re in a situation where you need to reduce your monthly payment, though, refinancing to a longer term is preferable to defaulting on your mortgage.
For instance, if you refinance a thirty year mortgage for $150,000 at 5.04% to a forty year mortgage with the same amount and terms, you’ll reduce your monthly payment from $807 to $727 a month. Depending on the amount that you’ve already paid on your current mortgage, your monthly savings could be even greater. On the other hand, because you’re paying on the mortgage for ten years longer, you’ll end up paying considerably more in the long run. In the example given above, you’ll pay a total of $58,420 more in interest over the life of your loan.
Refinancing can reduce the amount of interest that you’ll pay on your mortgage.
Another reason that people opt to refinance their current mortgage is to reduce the amount of money that they pay in interest to the bank or lender. Naturally, you’ll pay less in interest if you can refinance to a lower mortgage rate, but it’s important to consider what it will cost you to refinance the loan. Closing costs and prepayment penalties on your original mortgage can reduce the savings you’ll see by reducing the interest rate you pay. In general, if you can get a mortgage with an interest rate at least one percentage point lower than you are currently paying – and if you’ll be staying in your current home for four or more years longer, you’ll save enough in interest payments to make it worthwhile to refinance.
However, you may also save money by refinancing to a shorter term, even at the same or a higher interest rate. While refinancing your mortgage for a shorter term will probably increase your monthly payment, it can save you a considerable amount of money for the overall cost of your home loan. If you refinance a 30 year mortgage for $150,000 at 5.04% to a twenty year mortgage for the same amount and same interest rate, your savings – outside any closing costs and pre-payment penalties – will be a whopping $52,200. If you can afford to pay the extra amount on your mortgage each month, you’ll probably benefit in the long run.
These examples are only rough estimates of the amount of savings you can realize by refinancing your current mortgage. Refinancing your mortgage isn’t for everyone, and you should look carefully at your circumstances before making the decision to trade in your mortgage for a new one with a lower monthly payment or a shorter or longer term of payment. If you do decide that refinancing your mortgage makes sense for you, be sure to shop around for the best rates available. Every lender is different, and you could save considerably just by getting quotes from several lenders and choosing the best one for you.
Article Source: http://www.article-buzz.com
Refinancing your mortgage can reduce your monthly payments.
One reason that people refinance their mortgages is to reduce the amount of money they pay out each month as a mortgage payment. There are several different ways to accomplish this. The one that you choose will depend upon your financial circumstances.
• Refinance into a lower interest rate. If your credit score has improved since you took out your current mortgage, you may qualify for a lower interest rate on a new mortgage. Your credit score or credit rating is fluid, and will change over time as you build up a history of making on time payments on various loans and credit accounts. Thus, if you’ve made a couple of years of payments on your mortgage and credit cards without defaulting on any loans or making late payments, your credit history could conceivably have improved enough to earn you a lower interest rate if you choose to refinance. Since you’ll have a lower interest rate, you’ll have a lower total mortgage amount, and likely a lower mortgage repayment.
• Refinance to lengthen the amount of time you have to repay your loan.Another way to reduce your monthly payment is to refinance your mortgage into one with a longer term. Most financial advisors would recommend against refinancing for a longer term, because it will nearly always increase the amount you’ll pay for your mortgage overall. If you’re in a situation where you need to reduce your monthly payment, though, refinancing to a longer term is preferable to defaulting on your mortgage.
For instance, if you refinance a thirty year mortgage for $150,000 at 5.04% to a forty year mortgage with the same amount and terms, you’ll reduce your monthly payment from $807 to $727 a month. Depending on the amount that you’ve already paid on your current mortgage, your monthly savings could be even greater. On the other hand, because you’re paying on the mortgage for ten years longer, you’ll end up paying considerably more in the long run. In the example given above, you’ll pay a total of $58,420 more in interest over the life of your loan.
Refinancing can reduce the amount of interest that you’ll pay on your mortgage.
Another reason that people opt to refinance their current mortgage is to reduce the amount of money that they pay in interest to the bank or lender. Naturally, you’ll pay less in interest if you can refinance to a lower mortgage rate, but it’s important to consider what it will cost you to refinance the loan. Closing costs and prepayment penalties on your original mortgage can reduce the savings you’ll see by reducing the interest rate you pay. In general, if you can get a mortgage with an interest rate at least one percentage point lower than you are currently paying – and if you’ll be staying in your current home for four or more years longer, you’ll save enough in interest payments to make it worthwhile to refinance.
However, you may also save money by refinancing to a shorter term, even at the same or a higher interest rate. While refinancing your mortgage for a shorter term will probably increase your monthly payment, it can save you a considerable amount of money for the overall cost of your home loan. If you refinance a 30 year mortgage for $150,000 at 5.04% to a twenty year mortgage for the same amount and same interest rate, your savings – outside any closing costs and pre-payment penalties – will be a whopping $52,200. If you can afford to pay the extra amount on your mortgage each month, you’ll probably benefit in the long run.
These examples are only rough estimates of the amount of savings you can realize by refinancing your current mortgage. Refinancing your mortgage isn’t for everyone, and you should look carefully at your circumstances before making the decision to trade in your mortgage for a new one with a lower monthly payment or a shorter or longer term of payment. If you do decide that refinancing your mortgage makes sense for you, be sure to shop around for the best rates available. Every lender is different, and you could save considerably just by getting quotes from several lenders and choosing the best one for you.
Article Source: http://www.article-buzz.com
Refinancing Home Mortgage: Understanding Your Options
Are you considering refinancing your home mortgage? You’re not alone these days. The drop in interest rates and turbulence in the housing market has made refinancing home mortgages a very popular option. There are several reasons for seriously considering a mortgage refinance, and each of them suggests choosing a particular option for doing so.
Refinancing your home mortgage for a lower interest rate. Historically, the most common reason for doing a mortgage refinance is to take advantage of a lower interest rate. Over the past several years, home buyers often took primary mortgages with higher interest rates with the expectation that they could refinance when their circumstances changed enough to qualify them for a lower interest rate. This is an especially attractive option for young professionals at the start of their careers who expect to be earning better wages a few years down the line.
Refinancing your mortgage can decrease your monthly payment. There are two ways to use a mortgage refinance to lower your monthly mortgage payment. Obviously, refinancing into a lower interest mortgage will reduce your monthly payments if all other terms remain the same. You can also refinance into a longer term loan. This option reduces your monthly payment by spreading out your remaining payments over more months, making each installment lower. Be aware, though, that refinancing into a longer mortgage may reduce your monthly payment, but it will almost inevitably increase the amount of interest that you pay overall. In fact, moving from a 20 year mortgage to a 30 year mortgage, even at a lower rate, can potentially increase the real cost of your new home by tens of thousands of dollars.
Refinance from an adjustable rate mortgage to a fixed rate mortgage. Many borrowers opt for an adjustable rate mortgage in order to qualify for lower interest rates for the first two to five years of their loan. Historically, this has allowed new home buyers time to build equity in their homes along with building their credit to qualify for lower interest rates on fixed rate mortgages.
Refinancing from an adjustable rate mortgage to a fixed rate mortgage offers one major advantage – your mortgage rate will not change over the entire life of the loan. That means that your mortgage payment will be immune to fluctuations in interest rates, making it easier to budget and manage your money. If interest rates rise, you’ll be saving money. If they fall in the future, you may be in a position to refinance into a lower interest rate.
Refinance your mortgage with a cash-out loan. A cash-out refinance gives you access to cash that’s tied up in the equity of your home. If the current value of your home is more than the amount that you still owe on your mortgage, a cash-out refinance can put cash in your hands when you need it. Essentially, you take out a mortgage for any amount greater than your mortgage and up to the full value of your home. After you pay off your current mortgage and any fees associated with the refinancing, the additional cash is yours to use as you need it. In many cases, lenders are willing to loan as much as 125% of the equity you have in your home.
Do keep in mind, though, that the “extra” cash is not a gift. It’s a loan on which you’ll be paying interest, and can potentially increase the length of time it will take you to pay off your home and own it free and clear.
Refinance your mortgage to finish paying off your home sooner. While most people think of refinancing their mortgage as a way to decrease their monthly mortgage payments or lower their interest rates, there is another good reason to refinance – to pay off your mortgage sooner. If your circumstances have changed since your original mortgage and you can afford to pay a higher monthly payment, it makes good financial sense to refinance into a shorter term mortgage, even if you have to take a higher interest rate to do it. The difference in overall cost between a thirty year fixed rate mortgage and a fifteen or twenty year fixed rate mortgage is substantial. If you’re planning to stay in your home for the long term, and can afford higher payments, you could be out of debt ten to fifteen years sooner and save tens of thousands of dollars in interest payments.
Take advantage of the Making Home Affordable Program for refinancing your mortgage.
Thanks to the economic downturn and the collapse of home prices, many homeowners are ‘underwater’ on their mortgages – owing more on their mortgage than their home is currently worth on the market. That makes it impossible for them to refinance their mortgages, even if they have good credit. The federal government has established the Making Home Affordable program to assist those who are in this situation by making special incentives available to lenders who refinance those loans.
Refinancing your home mortgage for a lower interest rate. Historically, the most common reason for doing a mortgage refinance is to take advantage of a lower interest rate. Over the past several years, home buyers often took primary mortgages with higher interest rates with the expectation that they could refinance when their circumstances changed enough to qualify them for a lower interest rate. This is an especially attractive option for young professionals at the start of their careers who expect to be earning better wages a few years down the line.
Refinancing your mortgage can decrease your monthly payment. There are two ways to use a mortgage refinance to lower your monthly mortgage payment. Obviously, refinancing into a lower interest mortgage will reduce your monthly payments if all other terms remain the same. You can also refinance into a longer term loan. This option reduces your monthly payment by spreading out your remaining payments over more months, making each installment lower. Be aware, though, that refinancing into a longer mortgage may reduce your monthly payment, but it will almost inevitably increase the amount of interest that you pay overall. In fact, moving from a 20 year mortgage to a 30 year mortgage, even at a lower rate, can potentially increase the real cost of your new home by tens of thousands of dollars.
Refinance from an adjustable rate mortgage to a fixed rate mortgage. Many borrowers opt for an adjustable rate mortgage in order to qualify for lower interest rates for the first two to five years of their loan. Historically, this has allowed new home buyers time to build equity in their homes along with building their credit to qualify for lower interest rates on fixed rate mortgages.
Refinancing from an adjustable rate mortgage to a fixed rate mortgage offers one major advantage – your mortgage rate will not change over the entire life of the loan. That means that your mortgage payment will be immune to fluctuations in interest rates, making it easier to budget and manage your money. If interest rates rise, you’ll be saving money. If they fall in the future, you may be in a position to refinance into a lower interest rate.
Refinance your mortgage with a cash-out loan. A cash-out refinance gives you access to cash that’s tied up in the equity of your home. If the current value of your home is more than the amount that you still owe on your mortgage, a cash-out refinance can put cash in your hands when you need it. Essentially, you take out a mortgage for any amount greater than your mortgage and up to the full value of your home. After you pay off your current mortgage and any fees associated with the refinancing, the additional cash is yours to use as you need it. In many cases, lenders are willing to loan as much as 125% of the equity you have in your home.
Do keep in mind, though, that the “extra” cash is not a gift. It’s a loan on which you’ll be paying interest, and can potentially increase the length of time it will take you to pay off your home and own it free and clear.
Refinance your mortgage to finish paying off your home sooner. While most people think of refinancing their mortgage as a way to decrease their monthly mortgage payments or lower their interest rates, there is another good reason to refinance – to pay off your mortgage sooner. If your circumstances have changed since your original mortgage and you can afford to pay a higher monthly payment, it makes good financial sense to refinance into a shorter term mortgage, even if you have to take a higher interest rate to do it. The difference in overall cost between a thirty year fixed rate mortgage and a fifteen or twenty year fixed rate mortgage is substantial. If you’re planning to stay in your home for the long term, and can afford higher payments, you could be out of debt ten to fifteen years sooner and save tens of thousands of dollars in interest payments.
Take advantage of the Making Home Affordable Program for refinancing your mortgage.
Thanks to the economic downturn and the collapse of home prices, many homeowners are ‘underwater’ on their mortgages – owing more on their mortgage than their home is currently worth on the market. That makes it impossible for them to refinance their mortgages, even if they have good credit. The federal government has established the Making Home Affordable program to assist those who are in this situation by making special incentives available to lenders who refinance those loans.
Article Source: http://www.contentfueled.com
Refinance Now To Save Thousands on Your Mortgage
Death and taxes - two things you know are for certain in life. However, there is a third that is almost nearly as certain as those two - fluctuating interest rates. With a home mortgage being one of the largest purchases you will ever make, even the slightest decrease in the rate that you pay on the loan can save you thousands. For many of you, now may be the perfect time to refinance your mortgage and put thousands of dollars back into your pocket.
In the past decade the mortgage industry has become a highly competitive field. With recent events in both the mortgage industry and the U.S. economy, rates are changing rapidly. For many of us, we may be paying for more than we should on our mortgage and not even realize it. Indeed, many people never think about their mortgage over their years - a mistake that can cost them serious money. They just sign the papers and pay the monthly payment. However, during the 20-40 years that mortgage runs, interest rates will rise and fall - and the smart consumer knows to take advantage of these fluctuations.
Maybe you are thinking that it is too much hassle to refinance and not worth the time. Just think about this: If you took out your 30-year mortgage 5 years ago at 6.1%, that same mortgage may now be available to you for 5.45%. Although it may seem like only a small amount, 0.65% to be exact, that 0.65% adds up to over $3,400 you can put back into your pocket over the life of the loan. Ask yourself this; is 4-8 hours of your time worth $3,400? For most of us the answer is a resounding yes! If your average monthly payment is $600, this means you will chop an entire half-year off your repayment!
Another reason you may want to refinance is to get your mortgage handled by a different company than you are with now. Sometimes, for various reasons, our current mortgage lender doesn't meet our needs or provides below par customer service. You may wish to move your business to a local lender, or one that offers more options for repayment.
Some people find themselves refinancing to get rid of adjustable rate mortgages and other balloon payments. Thanks to the competitive market out there for mortgage notes, the average homeowner with decent credit will have no problem finding a mortgager who will refinance them at terms they can both agree on.
So as you sit down to pay your monthly mortgage bill as yourself these questions:
" Am I getting the best interest rate available for someone with my credit?
" Am I happy with the level of service my current mortgage holder provides?
" Do I have a mortgage payment that will go up in later years that I can refinance now to lock in a lower payment?
Each of these questions is good reasons to evaluate your current mortgage and consider refinancing. In the end, you may not only save a lot of money on your total house payments, but you may also end up getting better service with lower payments - something we can all enjoy!
In the past decade the mortgage industry has become a highly competitive field. With recent events in both the mortgage industry and the U.S. economy, rates are changing rapidly. For many of us, we may be paying for more than we should on our mortgage and not even realize it. Indeed, many people never think about their mortgage over their years - a mistake that can cost them serious money. They just sign the papers and pay the monthly payment. However, during the 20-40 years that mortgage runs, interest rates will rise and fall - and the smart consumer knows to take advantage of these fluctuations.
Maybe you are thinking that it is too much hassle to refinance and not worth the time. Just think about this: If you took out your 30-year mortgage 5 years ago at 6.1%, that same mortgage may now be available to you for 5.45%. Although it may seem like only a small amount, 0.65% to be exact, that 0.65% adds up to over $3,400 you can put back into your pocket over the life of the loan. Ask yourself this; is 4-8 hours of your time worth $3,400? For most of us the answer is a resounding yes! If your average monthly payment is $600, this means you will chop an entire half-year off your repayment!
Another reason you may want to refinance is to get your mortgage handled by a different company than you are with now. Sometimes, for various reasons, our current mortgage lender doesn't meet our needs or provides below par customer service. You may wish to move your business to a local lender, or one that offers more options for repayment.
Some people find themselves refinancing to get rid of adjustable rate mortgages and other balloon payments. Thanks to the competitive market out there for mortgage notes, the average homeowner with decent credit will have no problem finding a mortgager who will refinance them at terms they can both agree on.
So as you sit down to pay your monthly mortgage bill as yourself these questions:
" Am I getting the best interest rate available for someone with my credit?
" Am I happy with the level of service my current mortgage holder provides?
" Do I have a mortgage payment that will go up in later years that I can refinance now to lock in a lower payment?
Each of these questions is good reasons to evaluate your current mortgage and consider refinancing. In the end, you may not only save a lot of money on your total house payments, but you may also end up getting better service with lower payments - something we can all enjoy!
Article Source: http://www.articles4sites.com
Consolidate Your Debts through Mortgage Refinance
Many homeowners faced with mounting debt struggling to pay an existing home loan may find relief through a mortgage refinance. There are options available to Australian homeowners that can bring needed financial relief.
Convenience through Mortgage Refinance
It may be possible to consolidate all your outstanding debts rolling them into one loan and one monthly repayment. This would more than likely result paying less than all the current monthly debt payments you are presently making. For many Australian homeowners, this is the best mortgage advice available.
What is Mortgage Refinancing?
Essentially, you are taking out a new mortgage on the property already owned. The new loan will pay off your existing mortgage plus other outstanding debt giving needed relief and allowing you to make on monthly repayment you can afford. There are several benefits seeking a mortgage refinance including:
• More favourable loan terms
• Lower interest rates
• Extended time terms for repayment
• Reduced monthly repayments
• Establish an offset account for draw down funds
Why use Mortgage Refinance for Personal Debt Consolidation?
Mortgage refinance is a popular method toward meeting personal debt relief because typically a mortgage loan interest rate is much lower than other instalment loans or credit card accounts. Also, making one repayment is a lot more convenient and efficient than making several each month. Additionally, many consumers with a mortgage refinance actually pay less each month than when paying several instalment loans at one time.
Prepare through Mortgage Calculator Use
You can get a glimpse at how much you can borrow, what the costs will be and how much a monthly repayment amount you will have through use of a mortgage calculator. By inputting several pieces of personal financial information, a consumer can find estimated figures about mortgage refinance costs and get a look at different scenarios when using different input numbers changing interest rates or terms of time for repayment. Through use of a mortgage calculator, consumers can get an idea about finding a cheap mortgage to help consolidate all their bills. Mortgage calculators can help consumers find out how they can use the equity in their home for refinance purposes plus show a variety of mortgage options available based on personal financial situations. Although use of mortgage calculators can present a potential borrower with good estimate numbers, consulting with a trained mortgage counsellor will provide more definite information about your mortgage options.
Be Fully Informed When Shopping for Mortgage Refinance
A well informed consumer can make good choices when it comes to examining all the available mortgage options. Always make sure you:
• Understand exactly what is involved with mortgage refinancing before committing
• Do not use a mortgage refinance loan as a short-term financial fix
• You get control over your personal money management
• Repayments will be reduced – not increased
• Understand all the costs for obtaining a mortgage refinance loan
The end result from obtaining a mortgage refinance loan is that you will be better off financially after you have inked the deal.
Article Source: http://article-dashboard.com
Convenience through Mortgage Refinance
It may be possible to consolidate all your outstanding debts rolling them into one loan and one monthly repayment. This would more than likely result paying less than all the current monthly debt payments you are presently making. For many Australian homeowners, this is the best mortgage advice available.
What is Mortgage Refinancing?
Essentially, you are taking out a new mortgage on the property already owned. The new loan will pay off your existing mortgage plus other outstanding debt giving needed relief and allowing you to make on monthly repayment you can afford. There are several benefits seeking a mortgage refinance including:
• More favourable loan terms
• Lower interest rates
• Extended time terms for repayment
• Reduced monthly repayments
• Establish an offset account for draw down funds
Why use Mortgage Refinance for Personal Debt Consolidation?
Mortgage refinance is a popular method toward meeting personal debt relief because typically a mortgage loan interest rate is much lower than other instalment loans or credit card accounts. Also, making one repayment is a lot more convenient and efficient than making several each month. Additionally, many consumers with a mortgage refinance actually pay less each month than when paying several instalment loans at one time.
Prepare through Mortgage Calculator Use
You can get a glimpse at how much you can borrow, what the costs will be and how much a monthly repayment amount you will have through use of a mortgage calculator. By inputting several pieces of personal financial information, a consumer can find estimated figures about mortgage refinance costs and get a look at different scenarios when using different input numbers changing interest rates or terms of time for repayment. Through use of a mortgage calculator, consumers can get an idea about finding a cheap mortgage to help consolidate all their bills. Mortgage calculators can help consumers find out how they can use the equity in their home for refinance purposes plus show a variety of mortgage options available based on personal financial situations. Although use of mortgage calculators can present a potential borrower with good estimate numbers, consulting with a trained mortgage counsellor will provide more definite information about your mortgage options.
Be Fully Informed When Shopping for Mortgage Refinance
A well informed consumer can make good choices when it comes to examining all the available mortgage options. Always make sure you:
• Understand exactly what is involved with mortgage refinancing before committing
• Do not use a mortgage refinance loan as a short-term financial fix
• You get control over your personal money management
• Repayments will be reduced – not increased
• Understand all the costs for obtaining a mortgage refinance loan
The end result from obtaining a mortgage refinance loan is that you will be better off financially after you have inked the deal.
Article Source: http://article-dashboard.com
Refinance Now To Save Thousands on Your Mortgage
Death and taxes - two things you know are for certain in life. However, there is a third that is almost nearly as certain as those two - fluctuating interest rates. With a home mortgage being one of the largest purchases you will ever make, even the slightest decrease in the rate that you pay on the loan can save you thousands. For many of you, now may be the perfect time to refinance your mortgage and put thousands of dollars back into your pocket.
In the past decade the mortgage industry has become a highly competitive field. With recent events in both the mortgage industry and the U.S. economy, rates are changing rapidly. For many of us, we may be paying for more than we should on our mortgage and not even realize it. Indeed, many people never think about their mortgage over their years - a mistake that can cost them serious money. They just sign the papers and pay the monthly payment. However, during the 20-40 years that mortgage runs, interest rates will rise and fall - and the smart consumer knows to take advantage of these fluctuations.
Maybe you are thinking that it is too much hassle to refinance and not worth the time. Just think about this: If you took out your 30-year mortgage 5 years ago at 6.1%, that same mortgage may now be available to you for 5.45%. Although it may seem like only a small amount, 0.65% to be exact, that 0.65% adds up to over $3,400 you can put back into your pocket over the life of the loan. Ask yourself this; is 4-8 hours of your time worth $3,400? For most of us the answer is a resounding yes! If your average monthly payment is $600, this means you will chop an entire half-year off your repayment!
Another reason you may want to refinance is to get your mortgage handled by a different company than you are with now. Sometimes, for various reasons, our current mortgage lender doesn't meet our needs or provides below par customer service. You may wish to move your business to a local lender, or one that offers more options for repayment.
Some people find themselves refinancing to get rid of adjustable rate mortgages and other balloon payments. Thanks to the competitive market out there for mortgage notes, the average homeowner with decent credit will have no problem finding a mortgager who will refinance them at terms they can both agree on.
So as you sit down to pay your monthly mortgage bill as yourself these questions:
" Am I getting the best interest rate available for someone with my credit?
" Am I happy with the level of service my current mortgage holder provides?
" Do I have a mortgage payment that will go up in later years that I can refinance now to lock in a lower payment?
Each of these questions is good reasons to evaluate your current mortgage and consider refinancing. In the end, you may not only save a lot of money on your total house payments, but you may also end up getting better service with lower payments - something we can all enjoy!
In the past decade the mortgage industry has become a highly competitive field. With recent events in both the mortgage industry and the U.S. economy, rates are changing rapidly. For many of us, we may be paying for more than we should on our mortgage and not even realize it. Indeed, many people never think about their mortgage over their years - a mistake that can cost them serious money. They just sign the papers and pay the monthly payment. However, during the 20-40 years that mortgage runs, interest rates will rise and fall - and the smart consumer knows to take advantage of these fluctuations.
Maybe you are thinking that it is too much hassle to refinance and not worth the time. Just think about this: If you took out your 30-year mortgage 5 years ago at 6.1%, that same mortgage may now be available to you for 5.45%. Although it may seem like only a small amount, 0.65% to be exact, that 0.65% adds up to over $3,400 you can put back into your pocket over the life of the loan. Ask yourself this; is 4-8 hours of your time worth $3,400? For most of us the answer is a resounding yes! If your average monthly payment is $600, this means you will chop an entire half-year off your repayment!
Another reason you may want to refinance is to get your mortgage handled by a different company than you are with now. Sometimes, for various reasons, our current mortgage lender doesn't meet our needs or provides below par customer service. You may wish to move your business to a local lender, or one that offers more options for repayment.
Some people find themselves refinancing to get rid of adjustable rate mortgages and other balloon payments. Thanks to the competitive market out there for mortgage notes, the average homeowner with decent credit will have no problem finding a mortgager who will refinance them at terms they can both agree on.
So as you sit down to pay your monthly mortgage bill as yourself these questions:
" Am I getting the best interest rate available for someone with my credit?
" Am I happy with the level of service my current mortgage holder provides?
" Do I have a mortgage payment that will go up in later years that I can refinance now to lock in a lower payment?
Each of these questions is good reasons to evaluate your current mortgage and consider refinancing. In the end, you may not only save a lot of money on your total house payments, but you may also end up getting better service with lower payments - something we can all enjoy!
Article Source: http://www.articles4sites.com
Choosing The Best Time To Refinance Your Mortgage
Choosing to refinance your existing mortgage or home loan can be a wise and profitable decision, as you will likely be able to take advantage of lower interest rates from a different bank or lending institution.
It is possible to save hundreds or even thousands of dollars every month, but the trick is knowing what you need to do in order to have everything structured in the best possible manner to minimize your total cost.
If you are reading this, there is a good chance that you already have a mortgage, and you know that the size of your monthly payments depends upon the total value of the mortgage as well as the interest rate to which you and the bank agreed.
If you have a fixed rate mortgage, it will be easier for you to figure out whether refinancing your home loan will be a good option for you. If you have an adjustable rate mortgage, the calculation may vary but you should still be able to get a good idea of where your current interest rate is and what direction it will be headed in the next few years.
Most people pay attention to only the interest rate when looking to refinance their mortgage, but this can be a misleading methodology for a few reasons:
First, more important than just the interest rate is the TOTAL amount of interest that will eventually be paid back.
To illustrate this point, let's say that you got a $500,000 mortgage and you agreed to a 30-year period and a fixed interest rate of 9%. It has already been 18 years, so now you have only 12 years of payments left.
Now if you were to refinance this, you could get a new loan with a 5-year term, and even if you had an 11% interest rate with this new loan, you will still pay back less total interest. This is important to realize as it will save you more money in the long run, and if you are a person that only looks at the interest rates then you might not see the potential benefit of arefinancing situation such as this.
The point here is that even though the surface interest rate may be higher with a refinanced loan (regardless of whether it is fixed or adjustable), you may still be paying back LESS total interest over the term of the loan.
What your goal should be in terms of your home loan or mortgage is to minimize the amount of total interest that you will pay back to the bank, while making sure that the interest rate and time-period you have chosen will make your monthly payments as comfortable as possible.
You would not want to over-extend yourself financially by creating monthly payments that are too large, but at the same time remember that the smalle the payments are (and the longer the time you pay them) the greater the total amount of interest repaid will be.
Article Source: http://www.za77.org
It is possible to save hundreds or even thousands of dollars every month, but the trick is knowing what you need to do in order to have everything structured in the best possible manner to minimize your total cost.
If you are reading this, there is a good chance that you already have a mortgage, and you know that the size of your monthly payments depends upon the total value of the mortgage as well as the interest rate to which you and the bank agreed.
If you have a fixed rate mortgage, it will be easier for you to figure out whether refinancing your home loan will be a good option for you. If you have an adjustable rate mortgage, the calculation may vary but you should still be able to get a good idea of where your current interest rate is and what direction it will be headed in the next few years.
Most people pay attention to only the interest rate when looking to refinance their mortgage, but this can be a misleading methodology for a few reasons:
First, more important than just the interest rate is the TOTAL amount of interest that will eventually be paid back.
To illustrate this point, let's say that you got a $500,000 mortgage and you agreed to a 30-year period and a fixed interest rate of 9%. It has already been 18 years, so now you have only 12 years of payments left.
Now if you were to refinance this, you could get a new loan with a 5-year term, and even if you had an 11% interest rate with this new loan, you will still pay back less total interest. This is important to realize as it will save you more money in the long run, and if you are a person that only looks at the interest rates then you might not see the potential benefit of arefinancing situation such as this.
The point here is that even though the surface interest rate may be higher with a refinanced loan (regardless of whether it is fixed or adjustable), you may still be paying back LESS total interest over the term of the loan.
What your goal should be in terms of your home loan or mortgage is to minimize the amount of total interest that you will pay back to the bank, while making sure that the interest rate and time-period you have chosen will make your monthly payments as comfortable as possible.
You would not want to over-extend yourself financially by creating monthly payments that are too large, but at the same time remember that the smalle the payments are (and the longer the time you pay them) the greater the total amount of interest repaid will be.
Article Source: http://www.za77.org
The Basic Facts Of Home Refinance
Whenever the topic of credit refinancing pops up a lot of people will be wondering about their home loans and re-financing however there are many additional uses as well.
The foremost common explanations folks desire to re-finance their loans is to get a more favorable rate and reduce their monthly bills or even reduce the term of the mortgage loan or to gain access to their equity to pay off other bills as well as other purposes.
You bet credit remortgage can be done. Probably the most often refinanced loan these days (but by no means the only) would be the mortgage loan payment. Therefore, you'll find a number of aspects that should be hammered out like the time you've got - if you're refinancing owing to the failure to fulfill the existing mortgage loan terms. High closing costs can eat into the money you plan to see through re-financing a home loan.
If you have found a far more attractive interest rate on your car loan then that too may be a possible loan to re-finance. Then again if you have unfavorable credit ratings you might have to look around a great deal and there's no assurance you will get all available financial loans. There won't be any appraisal expenses when refinancing your car unlike re-financing your home, which will call for an appraisal.
As we all know your credit standing makes a difference on what loans and which stipulations it is possible to get. Let's say you financed a house or a auto loan and have a bad credit rating. After a while, you may be qualified to receive interest rates which are more desirable as your credit score gets better.
Whatever the reason you want to check into loan refinancing initially verify to be sure you are gaining a long-term gain with the re-financing. That means if your premiums are reduced by one hundred or 200 dollars a month however, you are paying for a much longer period it may not be practical.
Factor all mortgage loan closing costs, refinancing charges, and appraisal costs. You'll need a more affordable rate when additional expenses are included especially with big loan items like a house.
Regarding car refinancing and home as well, the valuation on the property has to be the same or greater than the loan amount. When you have not accumulated sufficient equity in your home, you'll need to have sufficient cash to offset and be eligible for a the credit. In case your motor vehicle is financed for more than its valuation, you may not have the ability to be eligible for a the full amount.
There is no firm basis based on how much you should save in interest costs overall. That will be determined by the conditions of your loan as it stands, the state of your credit scores at the moment, and just how much the charges to re-finance might be.
This really is certainly a great choice for many but cautious consideration must be given prior to altering loan terms to the final outcome. Saving a bit in interest charges might lead you to to actually lose money when the costs are more than the cost savings. The exemption to that may be in the event where a balloon payment comes due at the end and you are therefore refinancing to avoid it.
Verify the stipulations initially, learn your credit scores and check around when you are considering re-financing any credit line.
The foremost common explanations folks desire to re-finance their loans is to get a more favorable rate and reduce their monthly bills or even reduce the term of the mortgage loan or to gain access to their equity to pay off other bills as well as other purposes.
You bet credit remortgage can be done. Probably the most often refinanced loan these days (but by no means the only) would be the mortgage loan payment. Therefore, you'll find a number of aspects that should be hammered out like the time you've got - if you're refinancing owing to the failure to fulfill the existing mortgage loan terms. High closing costs can eat into the money you plan to see through re-financing a home loan.
If you have found a far more attractive interest rate on your car loan then that too may be a possible loan to re-finance. Then again if you have unfavorable credit ratings you might have to look around a great deal and there's no assurance you will get all available financial loans. There won't be any appraisal expenses when refinancing your car unlike re-financing your home, which will call for an appraisal.
As we all know your credit standing makes a difference on what loans and which stipulations it is possible to get. Let's say you financed a house or a auto loan and have a bad credit rating. After a while, you may be qualified to receive interest rates which are more desirable as your credit score gets better.
Whatever the reason you want to check into loan refinancing initially verify to be sure you are gaining a long-term gain with the re-financing. That means if your premiums are reduced by one hundred or 200 dollars a month however, you are paying for a much longer period it may not be practical.
Factor all mortgage loan closing costs, refinancing charges, and appraisal costs. You'll need a more affordable rate when additional expenses are included especially with big loan items like a house.
Regarding car refinancing and home as well, the valuation on the property has to be the same or greater than the loan amount. When you have not accumulated sufficient equity in your home, you'll need to have sufficient cash to offset and be eligible for a the credit. In case your motor vehicle is financed for more than its valuation, you may not have the ability to be eligible for a the full amount.
There is no firm basis based on how much you should save in interest costs overall. That will be determined by the conditions of your loan as it stands, the state of your credit scores at the moment, and just how much the charges to re-finance might be.
This really is certainly a great choice for many but cautious consideration must be given prior to altering loan terms to the final outcome. Saving a bit in interest charges might lead you to to actually lose money when the costs are more than the cost savings. The exemption to that may be in the event where a balloon payment comes due at the end and you are therefore refinancing to avoid it.
Verify the stipulations initially, learn your credit scores and check around when you are considering re-financing any credit line.
Article Source: http://www.avidarticles.com
Home Loan Refinance Information
If you have a home loan and you think that your property went up in value by ten percent or more since you took out your current loan, you might be a good candidate to refinance. It can save you loads of money on your mortgage payments, improve your terms, or both.
The bank uses your home as collateral for the loan when you take out a home loan. So the more expensive the collateral is, the lower will be the bank's risk that you may default on the loan and walk away from that collateral.
If the collateral grows in value over the years and the bank's risk is reduced, then you are able to qualify for a lower rate. And if your home went up in value by ten percent or more, banks will have to consider your home loan to be a less risky investment and would offer you a lower rate. This is, of course, assuming that you have the same job and income, made all payments on time, and your market interest rates are the same or lower.
Lower interest rate can indeed benefit you in several ways. You can either go for a home loan refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner.
Before having to home loan refinance, you have to consider the cost of doing it and then compare it to your savings. If it would cost you $5,000 to refinance and you have $25 savings per month then it would surely not be worth it because it will take you over 16 years to just break even. But if you have $250 savings per month or 5 years worth of mortgage payments, then it would be good move to refinance your home loan.
And so, before you apply for a home loan, it is important to ask for copies of your credit reports and review them carefully for any errors. If there are errors, you will need to immediately dispute the errors with each credit agency.
Another helpful tip is to do comparison shopping for a mortgage, as it will help you find the best home loan offer. The Internet is a wonderful tool for locating and comparing mortgage offers quickly. You can quickly screen mortgage loans from dozens of lenders with just a little time and effort.
The one too common mistake homeowners make when having to home loan refinance is rushing through and accepting the first promising offer they receive. But if you take the time to learn mortgage terminology, you will be able to understand the home loan offers you consider. Just remember, don't rush your financial decisions and you can save yourself money and future financial problems.
The bank uses your home as collateral for the loan when you take out a home loan. So the more expensive the collateral is, the lower will be the bank's risk that you may default on the loan and walk away from that collateral.
If the collateral grows in value over the years and the bank's risk is reduced, then you are able to qualify for a lower rate. And if your home went up in value by ten percent or more, banks will have to consider your home loan to be a less risky investment and would offer you a lower rate. This is, of course, assuming that you have the same job and income, made all payments on time, and your market interest rates are the same or lower.
Lower interest rate can indeed benefit you in several ways. You can either go for a home loan refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner.
Before having to home loan refinance, you have to consider the cost of doing it and then compare it to your savings. If it would cost you $5,000 to refinance and you have $25 savings per month then it would surely not be worth it because it will take you over 16 years to just break even. But if you have $250 savings per month or 5 years worth of mortgage payments, then it would be good move to refinance your home loan.
And so, before you apply for a home loan, it is important to ask for copies of your credit reports and review them carefully for any errors. If there are errors, you will need to immediately dispute the errors with each credit agency.
Another helpful tip is to do comparison shopping for a mortgage, as it will help you find the best home loan offer. The Internet is a wonderful tool for locating and comparing mortgage offers quickly. You can quickly screen mortgage loans from dozens of lenders with just a little time and effort.
The one too common mistake homeowners make when having to home loan refinance is rushing through and accepting the first promising offer they receive. But if you take the time to learn mortgage terminology, you will be able to understand the home loan offers you consider. Just remember, don't rush your financial decisions and you can save yourself money and future financial problems.
Article Source: http://www.articlecall.com
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