There are several great reasons to refinance your existing mortgage; let's review the five reasons that make the most financial sense in the current economic climate. 1.) Lower Your Interest Rate & Monthly Payment
Refinancing your mortgage to include a lower interest rate can significantly lower not only the amount of your monthly payments but also decrease the amount of money that you are paying over the life of the loan. If you financed your home several years ago, when interest rates were higher, you will most likely be able to obtain a much lower rate by financing today. A difference of even two points can take several hundred dollars off of your monthly mortgage payment amount. You will need to qualify for the new rate by having excellent credit; if your credit is less than stellar then the odds are that you won't be able to qualify to refinance your mortgage.
2.) Change From An Adjustable Rate To A Fixed Rate
If your home is currently financed with an adjustable interest rate (ARM), is still in its "locking term", and is set to age out of the locked term then you might want to consider refinancing today to lock in that fixed rate. Your monthly payment with your ARM can vary month to month once the interest rate becomes adjustable. This can put you at great financial risk if you are unable to meet the new payments; you could even lose your home if you are not able to afford the variations in the mortgage payments each month. Your mortgage payments can double or even triple, with an adjustable mortgage rate. Locking into a fixed rate will ensure the stability of your financial situation by allowing you to know exactly how much your monthly payment is going to be.
3.) Change From A Fixed Rate To An Adjustable Rate
Alternatively, if you wish to temporarily lower your monthly mortgage payment, you can switch to an adjustable rate for two years. This is an ideal mortgage plan for a homeowner who is a strong financial and credit situation and will be able to refinance the mortgage back to a fixed rate mortgage at the end of the ARM.
4.) Home Equity Cash Out
If your home has increased significantly in value and you have a fair amount of equity in the home, you may be able to refinance your mortgage to include the market value of your home. This will allow the lender to give you the difference between what was owed on the first mortgage and the market value. You will be able to use your home equity to pay off high interest loans and credit cards, buy a new car, or even towards home improvement projects.
5.) Consolidation Of Mortgages
If you have a secondary mortgage, or a home equity loan, with a higher interest rate you may be able to refinance your primary mortgage to roll in the second mortgage. This would allow you to pay off the higher interest rate mortgage lender in full and significantly lower your monthly repayment amounts.
Whatever your current mortgage situation may be, it is a very wise idea to carefully evaluate how refinancing can improve your financial situation not only in the immediate future but also further on down the mortgage road.
In my opinion these are the top 5 things to consider when you are thinking about refinancing your mortgage. However, keep in mind there are many other things to consider, such as; cash-out refinances, when is the right time to refinance, what is your break even point and much more. Visit the "Refinancing" section of my website:
http://www.mortgage-bankloan.com/category/refinance/ for more great information on this topic.
สมัครสมาชิก:
ส่งความคิดเห็น (Atom)
ไม่มีความคิดเห็น:
แสดงความคิดเห็น