Is it time to Refinance your Home

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Mortgage Refinancing - Before Considering Refinancing
Perhaps you're a homeowner in need of some quick cash.

Maybe you want to consolidate your debts so you have better control of your money.

Perhaps a lender is urging you to refinance because interest rates are low, and he has a too-good-to-be-true deal that will shorten your current loan's term.

Here are 6 essential questions to ask yourself before making the decisi... Read refinance mortgage article



Mortgage Refinance Company Online
Online mortgage companies make refinancing convenient and competitive. By researching mortgage rates and lenders online, you can be assured that you have the best refinancing rates.

Before You Refinance

Before you refinance your current mortgage, do a little financial housekeeping. Check your credit report and make sure all your financial records are in order. This is also a ... Read refinance mortgage article



Is it time to Refinance your Home
Millions of people are taking advantage of the current opportunity to refinance the mortgage on their homes. Rising home prices combined with falling interest rates have motivated people to convert their accumulated home equity into expendable funds. This frequently works to their immediate advantage, giving them a considerably lower interest rate and lower monthly mortgage payments.

Homeowners can choose either to spend or save the portion of their incomes that are no longer being spent on mortgage payments.

When Should You Refinance?

In some cases, when refinancing, it helps to borrow more than is needed to pay off the earlier mortgage. This gives you the equity from your home, plus extra funds to cover the transaction costs of refinancing. People use the funds for a variety of purposes: to make home improvements, to repay older debts, or to buy goods, services or assets they couldn't otherwise afford.

How much can you save by refinancing? This depends on several factors relating to your present mortgage situation. If your new interest rate is low, it can result in substantial savings, perhaps even thousands of dollars. And when rates rise, having refinanced from a variable rate loan to a conventional loan, you can stand to gain substantially.

Some Benefits Of Refinancing

Refinance a home mortgage is a big decision and should be approached with careful consideration of the potential costs and benefits. Clearly, when interest rates on mortgages fall below the rate on your existing loan, it's time to consider refinancing. This is the time to evaluate your potential after-tax savings from lower monthly payments, and compare it with the after-tax expenses of refinancing. These expenses include mortgage fees or points, application fees and appraisal fees. As the loan is repaid, the savings from your lower interest payments begin to accumulate. The savings due to refinancing must be discounted at the present rate and compared with the transaction or closing costs.

If you're considering refinancing your home, you need to evaluate your current interest rate. If your new interest rate would be more than 5/8% lower than your current interest rate, it is well worth refinancing. But if you want to keep your closing costs as low as possible, see that your new interest rate is at least 1% lower.

Why Refinance?

Most people who refinance do so to save money, but there are other reasons to do so. If you refinance your existing loan at a lower rate of interest, you can end up with a lower monthly mortgage payment. This can save you funds in the long run.

Debt Consolidation

In many cases, you can clear all your outstanding debts and replace them with just one low-cost monthly outlay. Refinancing your home to consolidate your debts (such as a credit card balance or a student loan) can save you money in the short run and the long run, because you'll be paying on a low-interest loan rather than a high-interest one.

Tax Advantages

If you have lower interest rates, it means smaller interest deductions on Schedule A. You are allowed to deduct interest on a debt of up to $1 million incurred to buy your primary residence and one more home. Also deductible is the interest on up to $100,000 of home equity loans for these two residences. If you refinance a mortgage, the interest on this loan is deductible to the limit of old mortgage plus $100,000.

The interest charges you pay up-front, or points, are really interest that's pre-paid and must therefore be deducted proportionately during the tenure unless you have purchased or improved your existing principal property.

If you have bought investment real estate or a vacation home, you can deduct points proportionately over the loan term. If you have refinanced a mortgage on which you already had been reducing points proportionately, you could be eligible for a tax bonus. Now you can subtract any part of the points for the mortgage already paid off that you had not yet deducted since the year of refinancing.

The precise moment to refinance a home is complicated to figure out. However, it is undeniable that such a moment will arrive, probably several times over the course of a 30 year mortgage. Just be prepared to act when the time comes.

Visit Refinance Mortgage to learn more. Ron King is a full-time researcher, writer, and web developer with a Website Here.

Copyright 2005 Ron King. This article may be reprinted if the resource box is left intact.

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Home Refinancing For People With Bad Credit

With bad credit, refinancing your home online will help you find better quotes, service, and application process. With hundreds of sub prime lenders to choose from, you can be sure to find the lowest rates. You can also enjoy service that can be customized around your schedule, getting an answer almost any time of day. And of course, online loan applications will speed processing.

Online Offers Better Mortgage Refinancing Quotes

With thousands of lenders online, financing companies secure your business by offering competitive rates. Even with adverse credit, you can find refinancing rates only a couple of percent higher than the average loan. All it takes is a few minutes asking for loan estimates.

To save even more time, you can start with a mortgage broker site. By partnering with dozens of lenders, one site can offer you several side-by-side quotes. Most sites will also list closing costs and points required. Of course, you also have the choice of going to individual sites to collect quotes.

When you ask for a refinancing rate estimate, be as accurate with your information as possible. Enter a realistic credit score to get rate quotes that won't jump after your information is verified.

Find Better Mortgage Refinancing Services Online

Online lenders also strive to give you better service. Most companies offer a variety of means to connect with a service representative. You can usually call or email outside of business hours and still get a response. A lender's website is also filled with a wealth of information, answering the most common questions.

After your loan is completed, you will most likely be able to set up an online account to monitor your loan's repayment. You can check the status of your balance, interest rate, and even your payment status.

Better Refinancing Application Process

Once you have selected an online lender, you can submit your application online by entering your basic information over a secure connection. Or if you prefer, your application can be sent by mail for your completion.

With many lenders, final paperwork can be notarized at your home or workplace. A notary will arrive as scheduled so you don't have to make any special trips.

See my recommended Bad Credit Mortgage Refinance Lenders for the lowest rates online.

Carrie Reeder is the owner of ABC Loan Guide.


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