Refinancing Your Mortgage Can Really Save You Money
Refinancing a mortgage is simply taking out a new mortgage. It means paying off one or more old debts by getting a new loan. Sometimes, refinancing your mortgage can really save you money. You may be able to pay less interest, lower your monthly payment, or convert from a 30-year loan to a 15-year loan and build your equity faster. But be sure that refinancing is right for you.
1. Refinancing can be a good idea for you if you:
- want to get out of a high interest rate loan to take advantage of lower rates. This is a good idea only if you intend to stay in the house long enough to make the additional fees worthwhile.
- have an adjustable-rate mortgage 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.
- want to convert to an adjustable-rate mortgage with a lower interest rate or more protective features.
- want to build up equity more quickly by converting to a loan with a shorter term.
- want to draw on the equity built up in your house to get cash for a major purchase or for your children's education.
2. Some situations where refinancing your mortgage can really save you money:
- refinancing your higher interest rate unsecured loans with lower interest rate unsecured loans if the terms of the loans are comparable and the new rate is lower than the existing rate.
- refinancing your secured debts (such as your mortgage or car loan) if the new loan is for the same length of time left on your old loan (or shorter), and the interest rate on the new loan is substantially lower than the interest rate on your existing loan.
- refinancing your home to pay-off expensive car loans or credit cards provided you're not in financial difficulty and not at risk of losing your home.
Mortgage refinancing can be worthwhile, but it does not make good financial sense for every homeowner. 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. This figure is generally accepted as the safe margin when balancing the costs of refinancing a mortgage against the savings.
Sometimes, refinancing is an appropriate way to resolve financial problems. In some situations, however, refinancing can make existing financial problems worse. If you decide that refinancing is not worth the costs, ask your lender whether you may be able to obtain all or some of the new terms you want by agreeing to a modification of your existing loan instead of a refinancing.
Copyright © 2005. Chileshe Mwape writes for the Mortgage Lender Guide at: http://www.lending-guide.org/ which offers informative articles about mortgages and loans.
This article may be reprinted as long as all the above links are active and clickable.
Latest News
Ben Bernanke: Fresh Attack on Mortgage Rates U.S. News & World Report, DC - Lower rates will enable some borrowers to refinance out of adjustable and into fixed-rate loans. But those who need to refinance the most have homes with ... Long Bond Returns Most Since 1995 Amid ‘Bubble’ Talk (Update2) Treasury Yields Hit Record Lows, But Will it Last? REFILE-TREASURIES-Bonds rally, helped by weakening economy |
Looking to refinance? Now might be the time Boston Globe, United States - Mortgage rates have been stubbornly high for quite some time but the government's recently announced $800B plan to bolster mortgages and consumer loans had ... Are looking for a new mortgage? We want to hear from you |
Interest rate drop opens door to refinancing Austin American-Statesman, TX - By Shonda Novak, MS Taboada The recent sharp drop in mortgage interest rates is creating a window for homeowners nationwide to refinance and providing an ... |
Md. sees drop in loss of homes Baltimore Sun, United States - Many borrowers took on mortgages at the height of the housing boom, believing they could eventually refinance to a lower loan rate or sell their homes if ... |
 Straits Times | Mortgage rates fall, but many borrowers will have trouble qualifying Los Angeles Times, CA - Jeff Lazerson, a Laguna Niguel mortgage broker, said all the customer calls he received Tuesday were from people seeking to refinance, not buy homes. ... Mortgage-market revival: Try, try again US move cuts mortgages to lowest rate since February Last Call for Smart Homeowners |
Self-Employed Are Frozen Out of Mortgages Wall Street Journal - He's been unable to find a lender willing to refinance the $900000 adjustable-rate mortgage on his primary residence, which he says is worth around $1.1 ... |
Mortgage Delinquencies Set to Soar: Report Housing Wire - “The credit ding makes refinancing that much more difficult,” said one source that spoke with HW Tuesday morning, a loss mitigation counselor at a large ... |
New mortgage crisis looming, experts caution San Bernardino Sun, CA - And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure. ... |
A recession Q&A Newsday, NY - ... take measures that will result in lower mortgage rates, "so people can afford to buy up housing inventory and refinance mortgages at affordable rates. ... |
Are You An Idiot To Keep Paying Your Mortgage? NewsNet5.com, OH - If you took out a home-equity loan or did a cash-out refinance to buy a car, you'll still owe tax on that debt if it is canceled. For state income taxes, ... Some buyers may see higher loan rates Global slowdown to drive market direction |
Resources
-
bad credit home loan, Refinance Mortgage loan, cash loan, cash advance loan, california home loan, p
Online bad credit home loan, Refinance Mortgage loan, cash loan, cash advance loan, personal loan, debt consolidation loan, payday loan, bad credit loan, home improvement loan, second Mortgage loan, online loan, unsecured personal loan Search.