Refinancing Your Mortgage Can Really Save You Money

Refinancing a mortgage is simply taking out a new mortgage. It means paying off one or more old debts by getting a new loan. Sometimes, refinancing your mortgage can really save you money. You may be able to pay less interest, lower your monthly payment, or convert from a 30-year loan to a 15-year loan and build your equity faster. But be sure that refinancing is right for you.

1. Refinancing can be a good idea for you if you:

- want to get out of a high interest rate loan to take advantage of lower rates. This is a good idea only if you intend to stay in the house long enough to make the additional fees worthwhile.

- have an adjustable-rate mortgage and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.

- want to convert to an adjustable-rate mortgage with a lower interest rate or more protective features.

- want to build up equity more quickly by converting to a loan with a shorter term.

- want to draw on the equity built up in your house to get cash for a major purchase or for your children's education.

2. Some situations where refinancing your mortgage can really save you money:

- refinancing your higher interest rate unsecured loans with lower interest rate unsecured loans if the terms of the loans are comparable and the new rate is lower than the existing rate.

- refinancing your secured debts (such as your mortgage or car loan) if the new loan is for the same length of time left on your old loan (or shorter), and the interest rate on the new loan is substantially lower than the interest rate on your existing loan.

- refinancing your home to pay-off expensive car loans or credit cards provided you're not in financial difficulty and not at risk of losing your home.

Mortgage refinancing can be worthwhile, but it does not make good financial sense for every homeowner. A general role of thumb is that refinancing becomes worth your while if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate. This figure is generally accepted as the safe margin when balancing the costs of refinancing a mortgage against the savings.

Sometimes, refinancing is an appropriate way to resolve financial problems. In some situations, however, refinancing can make existing financial problems worse. If you decide that refinancing is not worth the costs, ask your lender whether you may be able to obtain all or some of the new terms you want by agreeing to a modification of your existing loan instead of a refinancing.

Copyright © 2005. Chileshe Mwape writes for the Mortgage Lender Guide at: http://www.lending-guide.org/ which offers informative articles about mortgages and loans.

This article may be reprinted as long as all the above links are active and clickable.

---

The Real Truth About Those: Online Get a Better Loan Web Sites - 6 Things to Look For

You have seen the Commercials on TV go this or that web Site and Refinance your Home and Save thousands. Tempting isn't it? Do they really save... Read More

Secured Loans For Home Improvement ? When You Can?t Buy A Luxury Home

A house is just perfect with chipped walls and broken taps. Is it? If you don't think so, then home improvement loans is what you should be... Read More

A Guide to Getting a Bad Credit Remortgage

There are several reasons why you might be in the market for a bad credit remortgage. You might be wanting to try to lock in a lower... Read More

Multi Family Property Living

While most multi family properties are designed to allow the peaceful coexistence of many families within their separate units, some apartments and houses give you the feeling... Read More

Using a Calculator to Assess Your Loan

Buying a house is a very important step in your life. Every family dreams of having their own home and whether you are looking into your first,... Read More

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for a home equity line of credit but worry about your credit rating? Even with poor credit it... Read More

Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime Mortgages

Sub-prime mortgages are not that much different from average mortgages. They have interest rates, points, and fees. They can be compared online, and they have seasonal trends.... Read More

FHA Mortgage: Whats the Best Way to Show an Underwriter that Youre Ready to Buy a House?

Mortgage underwriters can be a suspicious bunch. If you have bruised or even bad credit, you have your work cut out for you. Many loan programs have... Read More

Home Loans -- The Hot New Product? The 30-year, Fixed-rate Mortgage

In recent years, the mortgage industry has introduced dozens of new types of loans. The needs of every borrower are different, so the mortgage companies have tried... Read More

Mortgage Refinancing - Does Size Matter After All?

Hopefully your ego has never had to experience the words, "It's okay honey. Size doesn't matter." After all, what's important is the quality right? In a perfect... Read More

Why Choose a Home Equity Loan?

There are many reasons for choosing a home equity loan. A home equity loan allows homeowners to obtain a loan in addition to their original loan using... Read More

Home Loans and Mortgages ? The Myth of Tax Deductible Interest

Home ownership has risen sharply in recent years, and the percentage of Americans who own their own homes is approaching a record seventy percent. That's a good... Read More

Securing a Cheap Home Improvement Loan

Finding a cheap home improvement loan can be a challenge at times, but the extra work involved can pay off by saving you money in the long... Read More

Mortgage Sales Hit Problems

The housing market has been buoyant over the past few years, but mortgage providers and first-time buyers are both now facing a tough time. Following announcements from... Read More

Home Equity Loan ? Good Choice for Luxury Purchases?

Home equity loans or lines of credit have increased dramatically in popularity in recent years. One of the reasons is that interest rates are at or near... Read More

Reverse Mortgages ? A Tax Free Income For Senior Citizens

I fully realize if it sounds too good to be true, it probably is and There Ain't No Such Thing As A Free Lunch (TANSTAAFL) immediately jumped... Read More

Say Yes to ISA Mortgages for a Convenient Mortgage Repayment

Customers who opt for an interest only mortgage, and feel themselves fortunate at the extraordinarily low monthly installments, wake up. The mortgage may be fast approaching its... Read More

Credit Problems? With a Subprime Mortgage Lender, Poor Credit is Not a Problem

Have you been turned down for a home loan recently because you have a bad credit history? You may want to consider applying for home financing with... Read More

Home or Investment Property Equity: Be Sure the Bank Gives You All that You Deserve

Home equity is your own personal money machine. If you want financial freedom, a home equity loan is probably the best way to achieve it. You can... Read More

Adjustable Rate Basics

An adjustable rate loan, most simply stated, means that your interest rate can be adjusted up or down over the months and years. By adjusting the interest... Read More

Mortgage Cycling May Be Your Best Bet For Equity Buildup and Investment Real Estate

Mortgage cycling is a system that relies on solid budgeting, equity lines of credit and use of an open credit card. Whether you use this on investment... Read More

Selecting the Right Mortgage for You

A mortgage is a loan you take out to buy a home. This loan covers the "principal" (purchase price of the house minus your down payment) plus... Read More

Recent Bankruptcy? Its Not Impossible to Obtain a Home Loan

Because the new bankruptcy laws go into effect on October 17, 2005, more Americans than ever are filing for relief using the federal bankruptcy laws. The vast... Read More

Repayment Remortgages is The Cure For Outdated Endowment Policy

If bulls and the bears of the stock market have no effect on your mortgage plan then you must apply for endowment to repayment remortgage. An endowment... Read More

First-time House Buyers: to Buy or Not to Buy; that is the Question

Buying your first house is always a difficult time. There are so many important decisions to make, and problems to be solved, which combine to make it... Read More

Some of the Available Loan Types

There are many mortgage products available on the market today. We can help you find out which one is right for you. Here are the most common... Read More