Question: Should I Refinance? Our home mortgages remain both our biggest monthly bill and our greatest investment. With all the economic uncertainty, we still have very low interest rates between four and five percent for 15 year loans, and less than six percent for many 30 year loans. A question facing many families is: Should I refinance?

Answer:

Who absolutely must refinance their mortgage?
1. Those in interest only loans, because they are not making headway on principle. Why? You are, in effect, renting your home. Get out of the interest only loan and refinance into a traditional mortgage.
2. Those in ARM (adjustable rate mortgages) mortgages. Why? When all of the bail out money sloshing around the economy begin to speed up the economy, among the most likely side effects will be a sharp up-tick in interest rates.
3. Those in balloon mortgages. Why? These mortgages have low teaser rates with large payments tacked on at the end. If you are having trouble making payments now, you will not have the money to pay off a balloon payment later. Home mortgage refinancing  your home mortgage into one with set payments that won’t jump up and bite you.
4. Those who have 80-20 loans, with the 20% loan meant to offset PMI Why? These 20% loans are a rip-off, with higher interest rates than the 80% mortgage. And unlike actual PMI that can be cancelled when you have a 20% equity stake in your home, you will be unable to simply get rid of a 20% loan unless you pay it off. Instead, refinance both loans into a lower rate consolidated mortgage. Then you can cancel the PMI when you have enough equity. And with a consolidated loan, you may be able to get a lower interest rate than the two loans individually charge. Should I Refinance home

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1. Mortgage refinance rules in brief

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3. Refinancing dangers according to Sen. Charles Schumer

4. The Making Home Affordable Program is on!

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