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Reverse Mortgages: Refinancing with These

When people think about refinancing a mortgage, they typically think about the existing, conventional loan on their home. But a reverse mortgage — a financial product increasingly popular among older adults — also can be a candidate for refinancing.

First, some background. A reverse mortgage allows homeowners who are 62 or older to borrow against the equity in their property. The proceeds can be taken in the form of a monthly check, lump sum or line of credit. Hence, the word “reverse”: Instead of a homeowner making payments to a bank, for instance, the bank makes payments to the homeowner. The loan is repaid, with interest, when the borrower sells the house, moves or dies. While these loans have their drawbacks (including the potential for some steep fees), more families are using them as a way to produce income without having to dump assets like stocks in a volatile market. To date, sales volume this year is up about 20% from 2002, according to the National Reverse Mortgage Lenders Association, a trade group based in Washington.

Why refinance?

By taking advantage of four changes since you first acquired a reverse mortgage — in your age, the value of your home, interest rates and the size of loans insured by the Federal Housing Administration — you might be able to put more cash in your pocketREFINANCING IS AN OPTION WITH REVERSE MORTGAGE…. .

An Argument for Home Mortgage Refinancing

I want to make another case for home refinancing because with the uncertainty of the times, it is a good idea to always know what kind of options you may have when it comes to financing. One of these options may be to take advantage of your home equity through refinancing.

Refinancing?

Home mortgage refinancing means taking out a new loan with a new set of conditions, terms and interest rate and uses it to pay off an existing mortgage. This service is usually offered by a lot of financial institutions, and your current mortgagor may also offer this. A best way to go is to research aggressively for offerings that will give you the best possible interest rate.

Advantages of a Home Mortgage Refinance

Why should you consider refinancing? Could there be any benefit? Yes there are several! Here are some:

(1) Lower monthly payments – you achieve this by extending the terms of your loan. By taking your existing 10 year loan and refinancing this into a 30 year term, you can lower your monthly payments considerably, thereby increasing the cash that you have at the end of each month which you can use for more important causes.

(2) Lower interest rates – with the current credit crunch, loans may be harder to come by, but if you can do it, you can take advantage of such historically low home mortgage interest rates now available in the market.

(3) Instant Cash – Yes, you can get a nice lump of cash by refinancing and applying for a loan larger than what your current mortgage owes. Of course, this is still money you owe, so it would be smart to put this to good use, like renovating your property.

(4) Shorter mortgage – If you have some extra money to spend and you’re not comfortable with having such a long-term, you can use refinancing to take out a shorter-term loan and at the same time take advantage of the lower interest rates that these loans offer.

Of course, refinancing your existing mortgage is not without its disadvantages or cost. We will tackle this more in a later feature.

Take Advantage of Cheap Refinance Mortgage Rates

A small consolation of the mortgage crisis are the depressed refinance mortgage rates that are now available. These historically low rates make refinancing a very lucrative option for a lot of people, for extra money to spend or to save. But before you make a move take advantage of cheap refinance mortgage rates, you have to make sure to do the math and make sure that you don’t end up spending a lot when trying to close a refinancing deal. Here are some tips

Continue reading Take Advantage of Cheap Refinance Mortgage Rates

Mortgage Refinancing Market is Booming

There is now a new era of “historically low” when it comes to mortgage rates and there is nothing like it.

Four years ago when we were all celebrating the arrival of already “historically low” mortgage rates. Back then, they were dancing at around 5.5% for a 30 year fixed mortgage which was truly significant back then because in the preceeding thirty years before that, 30 year fixed mortgages never posted a rate lower than 6.5% and actually climbed to 16+% at one point during the early 90’s.

But now, rates have reached a new low. Thanks to movements by the feds, rates could now hit 4.75% depending on your creditworthiness. That is almost one percent lower than the previous historic lows of half a decade ago. Last month, the national average rate was just a little over 5 percent.

People are aware of this opportunity now and refinancing activities have jumped up by over sixty percent in December, according to the Mortgage Banker’s Association, although these activities only count refinancing applications which may or may not become actual mortgages.

As a rule of thumb, refinancing makes sence if the new rate is about 1% lower than the old mortgage. At this rate it makes more sense any less and the upfront fees make refinancing expensive.

If you are looking to save some extra cash, it might be a good idea to look into refinancing your existing home mortgage. Granted, it may not be for everyone.

5 Reasons to Refinance

1 – Lower Monthly Payments

Interest rates are low, you’re already halfway through your existing mortgage and your monthly costs are up and you could really could use the cash. By taking advantage of lower than low interest rates and extending your 25 year home mortgage that has only 15 years remaining on it back for another 25 years, you lower your monthly payments and you get more cash in your pocket at the end of each month. Keep in mind though, that you are still in debt and that you are now going to be paying that loan for a much longer period of time.

2 – Bigger Savings

With lower interest rates and less fees these days, refinancing could save you thousands in the long run. You can also try to take advantage of the bonuses for earlier repayments. These things combined could amount to several thousand dollars in cumulated savings.

3 – Get Cash. Now.

By refinancing that mortgage in a way that gives you some cash to use, like switching to a Home Equity or Line of Credit loan, you get the opportunity to add some value to your home, or even get that car you urgently need. But remember, this is not cash you own, but cash you owe so spend it wisely.

4 – Debt Consolidation

Taking out a new loan can let you pay off your existing mortgage as well as your existing credit card debt and replace it for a loan that may take longer to pay but has a far lower interest rate than that credit card bill you have been struggling to pay off.

5 – Early Mortgage Repayment

Let’s say you just had that rare salary increase and you think you would like to put that mortgage out of your mind earlier in life. Refinancing your existing mortgage sounds like a good idea. You can take out a new loan with shorter terms, say 10 years instead of 25, and you can end up owning your house sooner than later. Less things to worry about later in life.

Taking out a new loan for your existing home mortgage might sound tedious or scary but by just getting the facts straight and throwing in a little careful math, you can make refinancing work for you.

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Read the news carefully today. You never know what you're gonna get. For recommended reading materials on mortgages and refinance aspects and how to fix your deeds or just plain news on real estate, check out the new york times online. It's a very good source of information.