Is It The Right Time To Refinance Your Mortgage
Is it the right time to refinance your mortgage
? You may be able to reduce your monthly payments or reduce the life of your loan by getting a lower interest rate or a new loan term. You may also be able to save more if you use your refinancing to pay off credit card debt or other high interest debt. That may be because interest on your mortgage is tax-deductible, and the interest on other loans is not. There are a lot of mortgage companies which offer refinancing. So it may be advisable to shop around. The only way to know if you may be getting the best rate is to shop around. Discussing your loan with several mortgage companies is a great way to also learn about different kinds of loan programs and lenders. Some key reasons to consider refinancing:
- You may get a lower-rate mortgage.
- You can convert an adjustable rate mortgage to a fixed rate mortgage.
- You can consolidate a first and second mortgage into one lower rate mortgage.
- You can get cash for family needs and expenses.
Some of the advantages of refinance would be, you can get a lower rate of interest, you would be able to consolidate your bills and get some extra cash and refinancing may be tax deductible.
When rates are low and home values are at all time highs, it may be the best time to get a low rate and low monthly mortgage payments
Refinance mortgage basically means to replace your current mortgage with a new loan with a more favorable interest rate and terms that you can afford to manage. This new loan may be secured on the same property as your current loan. The new loan funds could be used to pay down the current mortgage while any remaining money can be used to your best advantage. By refinancing you can save more, as lower rates usually mean lower payments by extending the term. However, with an extended term, you may be paying more in interest during the life of the loan. Again if currently you have an adjustable-rate mortgage (ARM) you may choose to refinance to get another ARM with better terms and the loan may start out at a lower interest rate. Again you would like to convert an ARM to fixed-rate mortgage (FRM). Another good reason to consider refinance could be that you would like to get cash out from the equity built up in your home so that when you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment.
A home
mortgage refinance can actually turn out to be a good idea, though. The key for this may be to use some smarts when you go about the mortgage refinance process so that you are in fact doing it to actually save some money. This way you may be able to keep more of your own hard earned finances, and less of it ends up going towards the interest. The main rule of thumb when getting a home refinance loan is to do it only when the going rate is at least half a point lower than the interest rate you currently have. This way the fees and costs that end up being associated with the paperwork and redoing the home refinance loan is worth the cost. Also, you may make absolutely certain that you are getting yourself a fixed rate.
by: Ask Bill
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