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Mortgage Refinance – Why You Should Refinance Your Mortgage

If you are considering refinancing your property or home you definitely should know why you should refinance and the different options that are available to you.

Many people who refinance definitely refinance for the wrong reasons. That is definitely why the mortgage crisis took place in the United States. People were refinancing just because they could and then turned around and spent the money from the refinance unwisely then suddenly could not afford their new payments.

Here are some general reasons why you should consider refinancing. The first is that you have a fixed rate mortgage and you want to refinance as you are looking for a lower interest rate. This type of refinance is generally the best option when refinancing. You could also be on the other side and have an adjustable rate mortgage or an ARM mortgage and you want to get a fixed rate to stabilize your payments.

Today there are also several people who have 2 mortgages and they want to consolidate the 2 mortgages into one. This option is great as you will definitely save money in the long run. Probably the last reason to refinance is that you want some extra cash or you want to pay off all your credit card debts to reduce your monthly payments. Although the last option to pay off your current debts is good you should know that most people that refinance to do this turn around and rack up more debt, so do not fall into this trap. If you do refinance to clear your debt make sure to put the credit cards away.

So now that you know the reasons for refinancing you should also know what refinance options you have available to you.

One option to refinance is the option to take the equity in your home or cash out or do cash back refinance. Again although this option is great you should definitely look at how you spend the money. If you currently are having trouble making your current mortgage payments then this option should not be used.

Probably the best refinance option is the low fixed rate loan or mortgage. If you are currently in a high rate fixed mortgage then you should look at using this refinance option. People who have ARM mortgages tend to go with this option as they get tired of their fluctuating interest rate on their current mortgage. Try to make sure that you do not incur a penalty though on the fixed rate mortgage refinance just in case you do come into some money and want to pay your mortgage off sooner. This option is also good for the person who know that they are not going anywhere within the next 5 years.

The last options are the short and long term loans. If you find that mortgage payments are too high than you could look at extending your current mortgage to a longer term, and this works vice versa with the short term loan. If you found a new job or received a new promotion and have extra money you can switch to a short term loan, with this you build up equity and pay off your mortgage sooner.

Once you are sure what option is best for you it is good to sit down and set out what your goals are and find out what your main reasons are for refinancing are. In the end if you are not comfortable with the option the bank is giving then just walk away and look at things with a clearer mind. Remember once you sign into the refinance it is pretty hard to get out without paying a penalty.

Lowest Mortgage Refinance Rates

hen shopping to lower your loan costs, you want to know the lowest mortgage refinance rates. This will give you the best bank for your hard earned bucks, especially in an uncertain economy. Don’t settle for merely asking your local mortgage lenders, you may actually find a better deal online.

Funny thing is about the lowest mortgage refinance rates, you can shop and compare, but if you have a mortgage lender or company you prefer, you can revisit them on rates after you have found the best rate and have them match it. Let’s face it, if you were in the mortgage refinance business, you want to get the most from the consumer, but faced with losing a loan, you will reconsider if you are faced with a smart borrower.

Keep in mind that finding the lowest mortgage refinance rates is not always in the interest rates alone. Mortgage interest rates are only part of the equation. You need to compare discount points as well interest rates. If a mortgage lender has the lowest refinance rates but higher discount points, you may want to pit that mortgage lender against the next closest lender and play one against the other for the absolute best deal.

Any time you are considering refinancing your existing mortgage, the time left on the existing loan is crucial to an accurate comparison in getting the best deal along with the lowest mortgage refinance rates. If you have over half your existing mortgage paid down, you may want to look seriously at a shorter loan payback or possibly just doubling up on a payment at least once a year to give a better payoff time line than merely looking for the lowest mortgage refinance rates.

Seldom will a mortgage lender give you all the facts that will benefit you as a borrower, so make sure you have all the right questions written down, before contacting a mortgage lender. Be sure to ask about discount points, loan origination fees, junk fees, and any other unique charges assigned from each mortgage lender. They are in business to make the most from you, so a smart borrower will do his/her homework first.

Most mortgage refinance deals allow for all upfront costs to be rolled into the new mortgage, so here is a sneaky way to get more money rolled into the new mortgage so that more interest can be collected over the life of the loan. If you can afford to pay out of pocket for the refinance costs, you’ll save even more money in the deal. The lowest mortgage refinance rates will generally be quoted from mid-week and toward the end of the week. Monday is a bad day to get mortgage loan rate quotes. Lenders will adjust their mortgage rates downward usually as the week progresses and the process repeats again the following week.

Junk fees are the best place to save yourself some big money. Junk fees are add-on costs for doing business with a specific lender. Each lender tries their best to get more cash from you when you aren’t paying attention. Like it was said earlier, the lender is all about making more money for the company instead of helping you. Insist on a list of junk fees. They’ll know what you are talking about and will have to come clean with them if they plan on doing business with you.

If you have the time and the need to refinance is not based on a critical time to get your current monthly debt reduced immediately, watch the mortgage rates for a couple of weeks and see how the same lender will fluctuate their mortgage interest rates in a given week. If there is not a sizeable market shift for outside reasons, like a quarterly report or national news upset, you’ll see what days to target locking in the lowest mortgage refinance rates.

Essential Facts About Home Loan Mortgage Refinance

One should apply for home loan mortgage refinance only if refinance is really required. Once you decide that you need mortgage refinance, you can review various options. Every individual has different circumstances. Different mortgage loans are suitable for different borrowers. Accordingly, you should select a refinance.

Factors That Affect Your Home Loan Refinance:

There are many factors that you should consider before selecting a loan refinance. Before mortgage refinancing, you should review factors like the total loan cost, number of years that you plan to stay and term of your mortgage. You should calculate the difference of interest amount you would have to pay during the loan period. The most important factor is the amount saved during the loan term. All these factors are interlinked. Giving more importance to one factor over others can change the situation in your favor. For example, sometimes you can save thousands of dollars by converting to a better loan term. Then you should not worry about a low interest rate. Depending on the factor that is more beneficial, you can select a suitable mortgage refinance.

Steps To Obtain A Suitable Home Refinance:

To obtain an appropriate home loan mortgage refinance, you need to take various steps. These will help you to decide and get the best possible option:

1. You should establish a good payment record with your existing financier. Proper credit records make you eligible for a low rate refinance. Your application is usually rejected if you have a poor payment history.

2. You should not depend on only one lender. Compare home refinance quotes from several lenders. This way you will be able to select an appropriate mortgage loan that will be financially favorable to you.

3. You should decide on the right time and utility of a refinance on your home. Just because the mortgage refinance rates are declining, you should not apply for refinancing mortgage.

4. You can use online refinance calculator to evaluate various options. Also, you can discuss with family and friends and benefit from their experiences with refinancing.

You should review every aspect in detail. Do not take a hasty step that can affect you adversely.
You can select a refinance quote from many quotes offered by different lenders. Usually, mortgage refinance is available in two types. You can either select a home mortgage refinance quote based on fixed rate interest or a quote based on adjustable rate mortgage (ARM). Both types of home refinances have their distinct advantages and disadvantages. Select a home loan mortgage refinance quote that suits best for your requirements and budget.