by: Mark Lambie
You've heard that interest rates are down and you think it could be time to refinance your existing mortgage, but the entire loan application process was so exhausting during the initial loan that you aren't sure it's worth the hassle. You could very well be right, but there are some things you can do to help decide whether it's time to refinance your mortgage.
The first thing you need to verify is the interest rate for your existing mortgage and the interest rates being offered across the board for new loans. If there's not at least a one and a half to two point difference, you're probably not going to be significantly better off to refinance your mortgage. Here's why.
Remember those closing costs on your initial mortgage? You probably paid for an appraisal, perhaps a home inspector's services and even a survey if you have rural property. Depending on how long it's been since your original loan, you may be faced with having all those processes repeated. Especially if you are going with another lender, have had the existing mortgage for at least two years, have made major modifications to your home or property, or have seen some significant variations in property values in your area, you're probably going to be required to have an appraisal at the very least. While it's not a huge cost for an appraisal, comparing that with the amount you're going to save on a slight drop in interest rates could show that it will take months to recoup that expense. Don't forget that you'll likely have some additional closing costs from the lender on the new mortgage (you are, after all, taking out a new mortgage even though you have an existing loan) and you may even be facing penalties for paying off your existing loan early. Weigh those costs against what you expect to save before you take this step.
So does that mean that you should never refinance an existing mortgage? Actually, there are plenty of opportunities when refinancing your mortgage makes good financial sense. If you've significantly increased the value of your home or have been paying for several years, you may have enough equity to qualify for a better interest rate. You may also lower monthly payments or refinance to make improvements. In the end, it's up to you to weigh the costs of refinancing your mortgage and decide if the time is right for you to take this step.
About The Author
Mark Lambie is the founder of http://www.the-loan-house.com a website that allows consumers to quickly and easily get mortgage information.
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Three Rules of Thumb for Mortgage Refinancing
Three Rules of Thumb for Mortgage Refinancing
by: Stephen L. Nelson, CPA
You might think that deciding to refinance a mortgage requires only a quick comparison of loan interest rates. Unfortunately, that?s not really true. Refinancing is trickier than that! Fortunately, three useful rules of thumb can often help you make sense of refinancing opportunities.
Rule 1: Don?t Ignore Total Interest Costs
You really want to use refinancing as a way to reduce the total interest cost you pay. While that sounds simple in principle, it is sometimes difficult to do.
The interest costs you pay are a function of the interest rate, the loan balance, and the loan term period.
When people refinance, they tend to focus solely on the loan interest rate. But they often don?t pay as much attention to the loan term or the loan balance.
When you use refinancing?even refinancing at a lower interest rate?to increase your borrowing or to extend...
Three Rules of Thumb for Mortgage Refinancing
Refinance > Three Rules of Thumb for Mortgage Refinancing
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
Deciding Upon a Refinance Lender
Deciding Upon a Refinance Lender
by: John Mussi
Finding a good lender to refinance your mortgage can be almost as important a decision as the actual mortgage you choose. In order to make a wise selection of a refinancing lender you should make sure that you do the following four things.
Know the objective of your mortgage refinance
Do you want to lower your current interest rate? Refinancing your mortgage can be profitable if your current mortgage is 2% higher than the prevailing rates. You can find out the prevailing rates by checking with your current lender or any bank. Newspapers will also print the daily rates.
Moving from an adjustable rate mortgage to a fixed rate mortgage can save you money if you time it well. When mortgage rates start creeping up, consider looking for a refinance lender.
The mortgage refinance lender you pick will want to know your reason for refinancing to aid in the process of finding the best...
Deciding Upon a Refinance Lender
Refinance > Deciding Upon a Refinance Lender
Should You Consider Home Refinance, or Not?
Should You Consider Home Refinance, or Not?
by: Jay Moncliff
Home refinance seems to be the craze these days with interest rates at all time lows. However, you need to do some home refinance research before you will know if it is for you or not. In general, if you bought a home when interest rates were significantly higher, have great credit, little debt, and always pay your bills on time then you should probably at least consider home refinance. Although, if you meet any of the following criteria then you definitely need to think twice before you decide on a home refinance.
Home Refinance Tip #1 Second Mortgages
If you have a second mortgage and decide on a home refinance then you will likely find yourself paying more than with your original home loan. If you have taken out a second mortgage on your home to help pay other bills then getting a lender to consider a home refinance for you is going to be difficult.
Home Refinance Tip...
Should You Consider Home Refinance, or Not?
Refinance > Should You Consider Home Refinance, or Not?
Mortgage Refinance: 4 Ways To Know It?s Time to Refinance Your House.
Mortgage Refinance: 4 Ways To Know It?s Time to Refinance Your House.
by: Richard Martin
You may want to refinance your home for several reasons.
1)Mortgage Rates might be lower now. The biggest reason that people refinance their mortgages is to save money.
No matter what has happened to you, there is always a good reason to start saving money.
A lower rate on your mortgage can help you stretch out the payments so that every month you are paying less to live in your house than the previous month.
When interest rates are low and you had previously locked your mortgage into a higher price, it might be a good idea to shop your rate around to see how low you can get it.
The early 2000's have been an environment of very low mortgage rates which make it a good idea to shop around to see if you can refinance your mortgage.
2)You need money and need to stretch out your payments.
Maybe you've...
Refinance > Mortgage Refinance: 4 Ways To Know It?s Time to Refinance Your House.
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