Why should I refinance?
If you bought your home a few years back when annual interest
rates were 12 percent, refinancing now can save you a great deal
of money over the term of the mortgage. Or you might be able to
switch from a 30-year mortgage to a 15-year, so you can pay off
your loan in half the time with roughly the same monthly
payments.
Refinancing can be worthwhile, but it does not make good
financial sense for everyone. A general role of thumb is that
refinancing becomes worth your while if the current interest
rate on your mortgage is at least 2 percentage points higher
than the prevailing market rate.
There are various reasons to refinance your home:
1. To lower the interest rate on your mortgage, reducing your
monthly payments and overall cost;
2. To reduce the term or length of your loan, doing so can save
you thousands of dollars in interest;
3. To provide a means of consolidating your debt;
4. To draw on the equity built up in the house to get cash for a
major purchase or for children's education;
5. Have an adjustable-rate mortgage (ARM) and want a fixed-rate
loan to have the certainty of knowing exactly what the mortgage
payment will be for the life of the loan.
It is better to refinance if you can get an interest rate at
least two percentage points lower than what you are currently
paying. However, every situation is different. Some lenders are
offering reduced fees or no points. Asking yourself a few
questions may help you determine if you can save money:
1. How much can I lower my current monthly payment? 2. How much
will I pay in refinancing costs? 3. How much will I still owe on
the house? 4. How much am I currently paying each month? 5. How
much did I initially pay for the house?
There are other considerations, too, such as how long you plan
to stay in the house. Most sources say that it takes at least
three years to realize fully the savings from a lower interest
rate, given the costs of the refinancing. Itemize all the
expenses of the refinance and estimate your new monthly
payments. Answering these questions can help you to decide if
you should refinance.
Before settling on a refinancing deal, you might want to engage
a lawyer to look out for your interests and make sure everything
is filled out properly. Talk with mortgage lenders, real estate
agents, attorneys, and other advisors about lending practices,
mortgage instruments, and your own interests before you commit
to any specific loan.
About the author:
Copyright © 2005. Chileshe Mwape writes for the Mortgage Lenders
website at
http://banks.lending-guide.org/ and he's also a regular
contributor to the Auto Loans website at
http://www.motor-car-loans.org.uk/
Chileshe Mwape
More Articles
Instant Loans Cash- Keeps Finance in Order Till the Next Financial Replenishment. - Andrew Baker
There is a tendency among people to keep their resources in a form that is not easily cash convertible. The arrangement holds good till the individual is faced with an exigency involving cash. This is the time when the individual is led into a tight...
Refinance Your Mortgage To Rebuild Credit - Carrie Reeder
Refinancing your mortgage is one way to rebuild your credit, particularly if you have recently declared bankruptcy. With a poor credit history, you can find refinancing through a sub prime lender. To rebuild your credit, make regular payments on...
New York Refinance - Refinancing in New York - Carrie Reeder
If you are looking to refinance in New York, it helps to get the facts before you begin the refinancing process. If you have an existing high interest mortgage, refinancing now could be the best choice for you. You can choose to refinance with cash...
How to finance a new extension? - John Mussi
Want to improve the look of your property? Want to add value to your property? The extension plans are ready but the finances are not. Rather than waiting another year why not consider a Home Improvement Loan. Make the dream become reality with a UK...
Sisters are insuring themselves: how finance is the new feminism - cashzilla
According to a study by LifeSearch, the number of women in the UK buying life insurance in the UK has doubled over the last six years. As women are increasingly closing the gender related pay gap and even becoming the main breadwinners in a...
Second Mortgage/Home Equity vs. Refinance - Benjamin Ehinger
Why should you take out a second mortgage or a home equity line
of credit instead of refinancing?
Well,.........You Shouldn't!!
Why Not?
1. Second Mortgages usually have an interest rant that is twice
or even three times as high as...
Managing Finances As A Couple - What Is Best - Dave Robinson
You may find it difficult to manage finances together when
you've been acustom to managing your finances alone. But when
you become part of a couple, many things change, and your
finances are no exception! Some couples take the traditional
path...
DIRECTORY OF FINANCE ARTICLES - John Tyler
You can access all of John's articles at: http://www.trader007.com/Infognome/articles.htm The site also has free ebooks,trading lessons and email course. About the Author
John is CEO of http://www.Trader007.com and has writeen several books on...
War of the Worlds: Student Finance versus Life - Richard Green
It’s a worrying time for current and prospective students. Figures from the Prudential, show that a third of UK university students have considered abandoning their studies due to the financial strain they have encountered. It is not surprising that...
Home Loan Refinance: Back To The Basics - Lendgo com
Can be republished as long as all hyperlinks and bio box are
include.
Please visit Lendgo.com for more information about: bad credit mortgage
refinancing , business
credit Card , sec
ured credit card , & local
refinance mortgage
...
