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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.

Mortgage Lenders What Are They

Mortgage lenders is that word we use to lump together all the institutions and organizations who give money to people to buy their homes in the form of home equity loans. These are our lenders: banks, companies that have some sort of loan program, insurance providers and trust companies

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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

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Are reverse mortgages different than home equity loans?

Let us first define reverse mortgage. A reverse mortgage is a type of loan available to older homeowners. It enables them to convert the equity in their home to cash in order to finance living expenses. Whether it be for home improvement or for health care. Payments are then made by the lender to the homeowner.
Continue reading Are reverse mortgages different than home equity loans?

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.

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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.