Refinance > Building Home Equity and Saving

Building Home Equity and Saving

by: Troy Francis

Today?s borrowers refinancing to shorten the term of the mortgage. However even at low rates, a shorter term means a higher monthly payment. The benefit is that you'll build up equity faster and pay far less in total interest over the life of the home equity loan.

Consider Tony Nelson, 49, a real estate broker and his wife Merrilyn, 56, a psychotherapist. Recently, the couple took out a 15-year fixed rate loan at 6.75% to replace an 8.13% ARM with a 30-year term. Their monthly payment jumped by $200, but now they will own their own home outright by the time they retire. Smart! Also the total interest on the 15-year loan will come to $95,447, vs. $222,234 on the remaining life of the ARM -- and that assumes their adjustable rate would have held steady at its current 8.13%. "This is forced savings," says Tony. "When I retire, we can scale down and take equity out of the house as we want to."

If you can't afford the payments on a 15-year mortgage or home equity loan, your next best means of building equity is to refinance for less than 30 years. To do so, ask your mortgage lender to customize your new loan's term to match the years that are left on your previous loan.

Also try to anylze your savings. Check closely to determine the available mortgage rates and the costs associated with refinancing. These mortgage costs can include items such as an appraisal and other fees. Then determine what your new mortgage payment would be if you refinanced. Estimate how long it will take to recover the costs of refinancing by dividing your closing costs by the difference between your new and old mortgage payments. However, the amount you may save depends on other factors as well. Including your total refinancing costs, whether you sell your home in the near future, and the effects of refinancing on your taxes. The old rule of thumb used to be that you shouldn't refinance unless the new interest rate is at least two percentage points lower. However, many Mortgage lending companies are now offering zero point loans and low cost refinancing. Therefore, even if your rate change is less than one percentage point, you may be able to save some money by refinancing. As always check with all mortgage lenders to see what will be the best refinancing for you. http://www.centurymortgages.org

About The Author

Copyright Troy Francis. Troy is a writer and real estate broker for Century Mortgages. Please feel free to republish this article. We only ask that you leave the link active. You many see more articles like this by going to: http://www.CenturyMortgages.org.

Home Equity Loan Refinancing

Home Equity Loan Refinancing

by: Carrie Reeder

If you have lived in your home for more than two years, it has probably appreciated which means that you have built up equity. What is home equity? Home equity is the difference between the value of your home and the amount of all that you owe on your home. If your home has an appraised value of $200,000 and all of the outstanding liens against it total $150,000 then your home equity equals $50,000. Often times when a home has accumulated value, the homeowner decides to take some of that value out in cash. Sometimes the cash is used to pay off bills, for home improvements or for a child?s education. One of the best ways to tap the money available from your property is to refinance it with a home equity loan.

When considering a home equity loan, there are several steps you should take to ensure you choose the refinancing package that is right for you.

? The current market for home equity loan...

Home Equity Loan Refinancing

Refinance > Home Equity Loan Refinancing

Deciding Whether to Refinance a Mortgage Loan

Deciding Whether to Refinance a Mortgage Loan

by: John Mussi

If you're considering whether or not to refinance your mortgage loan, you may find that the decision that you make will influence your finances for years to come. Refinancing can be a powerful tool to save money and receive better interest rates and loan terms, but if you enter into a refinance loan without taking the time to consider the options and potential ramifications then you might end up spending more on the refinance than you would have on the original mortgage loan.

To help you in making this important decision you'll find below a listing of several factors that should be considered before making your final choice.

The information provided will hopefully assist you in making the decision that's right for you and your current situation.

Mortgage Payments and Equity

The first thing that you should take into consideration when thinking about refinancing...

Deciding Whether to Refinance a Mortgage Loan

Refinance > Deciding Whether to Refinance a Mortgage Loan

Adjustable vs Fixed Rate Mortgages

Adjustable vs Fixed Rate Mortgages

by: Max Hunter

Mortgage rates can either be fixed for the duration of your loan or can be adjustable. An adjustable rate mortgage is a loan that is set up with an interest rate that changes based on pre-determined criteria, primarily tied to the federal interest rate. If the interest rates are up, then your interest rate on your loan will be higher, if the interest rates are low than the interest rate on your loan will go down.

Adjustable rate mortgages (ARM) are generally fixed interest rates for a period of time and then become adjustable. Generally speaking the introductory interest rate for an ARM loan will be lower than a fixed rate mortgage. This is done in order to lower initial payments and allow people to take out larger mortgages, or give them smaller payments for the introductory period. This is attractive to people who may know that their income will be increasing over that period of time.

Whether...

Adjustable vs Fixed Rate Mortgages

Refinance > Adjustable vs Fixed Rate Mortgages

Buying A House After Bankruptcy - Things To Consider

Buying A House After Bankruptcy - Things To Consider

by: Carrie Reeder

Bankruptcy can make getting any kind of financing much more difficult. However, it's not impossible anymore to get financing, even a few days after the discharge of a bankruptcy. But, is getting a loan soon after a bankruptcy a smart thing to do?

It can be tempting to buy a new home, new car, etc., after a bankruptcy discharge you have no debt left. You will probably feel like you can afford a larger house payment. Here are some factors to consider before committing yourself to a new house payment.

Pre-Payment Penalty - Almost every subprime loan (bad credit loan) now comes with a pre-payment penalty. This penalty is usually about 6 months worth of house payments. The pre-payment penalty period usually lasts 2-3 years. That means, if you want to refinance or sell your house in that period of time, that will make it very difficult, if not impossible to sell or refinance....

Buying A House After Bankruptcy - Things To Consider

Refinance > Buying A House After Bankruptcy - Things To Consider

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers

by: Mansi Gupta

Gone are the days when money could be fetched either by mere mortgaging or financing something. Now it is time to get money via an amalgam of the two i.e. Mortgage Refinance. Mortgage refinance is a smart idea to have a good credit sum and repay it in an easy fashion. In simple terms a refinanced mortgage is one where a borrower repays a previous loan by taking a new one. The main motive behind refinance mortgage is to get a lower interest rate, lowering their payments or to take cash out of their home equity. So basically in mortgage refinance refers to taking a secured loan to replace the existing loan that is secured via some assets of yours.

Let us first delve into the factors that instigate a refinanced mortgage.

There are several reasons that instigate people to opt for refinance. For instance

(a) Mortgage refinance reduces the interest rate...

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers

Refinance > Get a Better Mortgage Refinance Deal Than Your Local Bank Offers