Should You Choose to Refinance?

Refinancing has become a valid option for many individuals with high interest rates on their mortgage. Refinancing is essentially a replacement loan, with a different lender and (hopefully) a lower interest rate.

So why would you choose to refinance?

• You may be able to take advantage of lower interest rates.

• You may also be able to extend the repayment period of your mortgage. While you will end up paying more in interest charges for this, this will reduce your monthly outgoings.

• You may be able to switch from a variable rate to a fixed rate mortgage, giving you greater security in the future from potential rate increases.

• You may also be able to increase the amount of your mortgage, to pay off other, higher interest rate liabilities such as credit card debt, cell phone debt and personal loan debt. This will enable you to save money on interest rate charges

Why would you avoid refinance?

If you decide to borrow more than your existing mortgage, you need to be wary of your budget. If you default on your payments you run the risk of losing your house.

If you do not calculate the costs involved with refinancing correctly, you could end up paying more in interest charges.

Thoroughly review the contract of your existing loan, an early pay out could involve a penalty that would negate the benefits of refinancing.

What will it cost me?

Refinancing does carry some costs that you need to be made aware.

• Valuation Fee ? This is the fee for a professional appraisal of the value of your house.

• Credit Report ? An assessment of your credit health

• Escrow ? Fee for money transferred by a third party.

• Lender Fees ? Any other fees that are incurred by using a particular lender

Am I eligible?

Applying for mortgage refinance is just like applying for another loan. There is a set criteria for acceptance. Every missed mortgage payment will count against you in the application, either resulting in a greater interest rate or a refused application.

Should I choose refinancing?

You will need to assess your current mortgage and the changeover costs and savings to ascertain whether it will be of benefit to you. There are specific refinancing calculators that can help you determine the net gain. The best one that I have found is here http://www.calcbuilder.com/cgi-bin/calcs/HOM12.cgi/

As a rule of thumb many lenders advocate that a 1% gap between your current interest rate and a refinance rate makes refinance a worthwhile option. Always make sure to speak to a financial professional before deciding to refinance your mortgage.

About The Author

Brad Slade

More information on mortgage refinance available at http://members.optusnet.com.au/~mortgagearticles/

---

VA Loans, A Gift from Uncle Sam

Uncle Sam has a gift for the men and women... Read More

Types of Mortgage Interest Rate

Here is a useful guide to the different types of... Read More

Understanding Fixed-rate Mortgages

A fixed-rate mortgage is a mortgage on which the interest... Read More

Mortgage Debt Elimination

The prospect of mortgage debt elimination is something that many... Read More

A Guide to Finding Cheap Homeowner Loans

If you're actively looking for cheap homeowner loans, there are... Read More

Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit

Having poor credit alone cannot hold you back from getting... Read More

How Homeowner Can Save Their Home From Foreclosure

Drive around and see how many signs you see that... Read More

A Guide to Getting Bad Credit Home Improvement Loans

You might be wanting to look into bad credit home... Read More

Mortgage Information

A mortgage is borrowing money using property as a security,... Read More

Home Equity Loan Improvements

There's more Regulation Z compliance on the way, courtesy of... Read More

Home Mortgages: Up, Up and Away!

Refinance NOW-before it's too lateIf you haven't found the time... Read More

Mortgage Research Good News for House Buyers

Figures from the Council of Mortgage Lenders show that in... Read More

40-Year Mortgages: An Alternative to Interest-only Loans?

Interest-only loans are quickly becoming a mainstream loan product. Borrowers... Read More

2nd Mortgage Loan After Bankruptcy - Get Approved Online

A 2nd mortgage loan after a bankruptcy is possible in... Read More

Why Choose a Home Improvement Loan?

Many people choose to take out home improvement loans so... Read More

Choosing The Right Buy-To-Let Mortgage

Buy-to-let took off during the 1990s with the increasing availability... Read More

PayDay Loan Online - Quick Cash Advance Loans Online Are Very Convenient

Getting a quick cash loan, cash advance or payday loan... Read More

How easy is it to get a Commercial Mortgage in the UK?

As is the case when applying for any mortgage, be... Read More

Buying A Home? Reasons to Consider Financing Your New Home Loan Online

Financing your new home loan online can save you time... Read More

Know Your Mortgage Fees, and Youll Never Pay Too Much for Your Loan

If you buy new windows, you'll not only pay for... Read More

New York Refinance - Refinancing in New York

If you are looking to refinance in New York, it... Read More

Home Loans ? Would You Buy a Home Without an Inspection?

The housing market has exploded, with home prices rising beyond... Read More

Construction Loan Basics

It might not be too big of an exaggeration to... Read More

The Top 5 Things You Must Know Before Applying for a Mortgage

You've been thinking about buying your own home for quite... Read More

Finding the Best Homeowner Loans for Your Money

Looking for the best homeowner loans can be stressful, especially... Read More

Home Loans and Mortgages ? The Selection Can Be Bewildering

For years, when someone wanted to purchase or refinance a... Read More

Buy to Let Mortgages

Finding the right buy to let mortgage is crucial to... Read More

Get the Best Rate on Your Home Mortgage Loan

Home mortgage interest rates hit record lows in 2004 and... Read More

Mortgage: Rehabilitation Of Financial Helplessness

The term 'mortgage' is assumed really controversial by people when... Read More

What is a Capped Mortgage?

A capped mortgage is a variable rate mortgage with a... Read More

Home Mortgage Loans For People With Bad Credit - 3 Ways To Improve Your Chances For Getting Approved

Finding home mortgage loans are a reality for people with... Read More

Mortgage Debt Elimination in 5 to 7 years!

Mortgage Debt Elimination shows that most home loan debts will... Read More

Secrets Your Banker Wont Tell You - Which Loan is Best for You?

Recently I was driving in my Car and I heard... Read More