Contact Us
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Refinancing Your Mortgage Can Really Save You Money
By Chileshe Mwape
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.
If you do not want to rely on a mortgage loan or buy to let mortgages to purchase a home, you may want to
think about a home based business opportunity to save up in order to buy that dream home. Owing a
business is blessing and it is good to have your own business. The internet has provided us with many online
jobs and you do not need to go to office as virtual offices could be the best source of income. Seriously
consider a work at home job to reduce your transportation costs. You can earn money at home starting with
low capital. Even without capital you can create a constant stream of income and be able to set aside money
to purchase your dream home! Start your home business now!
By Chileshe Mwape
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.
If you do not want to rely on a mortgage loan or buy to let mortgages to purchase a home, you may want to
think about a home based business opportunity to save up in order to buy that dream home. Owing a
business is blessing and it is good to have your own business. The internet has provided us with many online
jobs and you do not need to go to office as virtual offices could be the best source of income. Seriously
consider a work at home job to reduce your transportation costs. You can earn money at home starting with
low capital. Even without capital you can create a constant stream of income and be able to set aside money
to purchase your dream home! Start your home business now!
Copyright 2004-2007 Homesolutionssandiego.com
All Rights Reserved
admin@homesolutionssandiego.com
All Rights Reserved
admin@homesolutionssandiego.com
Your resource for real estate and home decorating in San Diego
