Refinancing Your Home
Posted by Tim Ryan on Wednesday, August 3rd, 2011 at 10:26am.Making large and important decisions about your home can be one of the most difficult things you can do. When it comes to money and home payments, thinking about refinancing or other large changes can cause unnecessary stress and headache. In addition, mortgage lenders will tell you just about anything you want to hear in order to get you to sign with them for your new refinanced loan. Making an educated, unbiased decision about your financial investment in your home is not easy; your home is your castle. You need to make sure that you are making a sound decision that is uninfluenced by the opinions of others and that you are doing what is best for you.
There are several different reasons why you might be or should be considering a mortgage refinance. A home refinance is not a bad thing. Typically people refinance because they can benefit from it. You might be interested in taking advantage of the lower mortgage interest rates that are available since the economic downturn several years ago. With a refinance, you have the opportunity to restructure your loan with a lower interest rate which means that you will be required to pay less money per month, and that more of the money will be used to pay off principle and not interest. In addition, you may want to put more money towards your mortgage all at once. Sometimes paying more than is required can incur a fee that will end up costing you more money. You may be refinancing in order to pay more per month and own your home outright more quickly. This will save you time and a lot of money in the long run on money saved on interest payments.
People will often refinance their mortgage to consolidate debts or to help fund necessary home repairs. If you have been interested in remodeling or improving your home, you can refinance and withdraw the cash value of your home, above what is owed, to be put towards the cost of the repairs. Additionally, if times are tight, you can extend the term of your home loan so that you pay less each month. This generally leads to a raised interest rate on your mortgage, but will allow you to save money each month on your required payment.
If you are interested in saving money on your home or freeing up some cash to make home repairs or pay growing bills, learn more about the mortgage refinance rates in your area and see if you could benefit from a mortgage refinance.
Guest post by Jessica Thorseon at MortgageRefinanceRates.org.
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Share2 Responses to "Refinancing Your Home"
Interesting article and a lot of good info. In the market here in Phoenix we are finding few people that are able to refinance due to being underwater. hopefully there is a light at the end of the tunnel
Posted on Wednesday, August 17th, 2011 at 12:11pm.
I have always heard that to benefit from a refinance, the new mortgage interest rate should be at least 1% less than the current rate, and the homeowner should be planning to keep the home at least another 2 years (in order to recover the costs of the refinance). Do you agree with this "rule of thumb" refi formula?
Posted on Wednesday, August 3rd, 2011 at 10:09pm.