| Home | Free Articles for Your Site | Submit an Article | Advertise | Link to Us | Search | Contact Us | |
Custom Search
|
Article Surfing ArchiveIs Home Mortgage Refinancing Really Worth It? - Articles SurfingIs it really worth it? Excellent question... since the refinancing process can take upwards of 2-3 months to complete, plus the expenses and hassles of refinancing may outweigh the benefits. Not everyone should refinance just because rates are lower. The general rule of thumb is to consider refinancing if rates are at least 2% lower than your current rate. This is considered a safe margin. Also, consider these things... Are you planning to sell the house at any time? If so, how far into the future? It may not be beneficial to refinance now. Many people who are "in the know" say that it takes 3 years to fully realize the savings from refinancing; considering in all of the costs of refinancing. Will you have to pay a penalty for closing the current loan? This may be substantial enough to change your mind about refinancing. Do you have an Adjustable Rate Mortgage? You may want to lock your loan in at the lower rate if you are fairly sure the rates will rarely, if ever, get this low again. Do you want "Cash Out" to pay other debts, etc.? Keep in mind that if you ask for "cash out refinancing" that the amount of your loan is usually limited to 80% of your home's value. Of course, all things being different, you should check with your lender to see what exceptions may apply. If you need cash, but the straight refinancing option isn't equitable, you might want to consider getting a Home Equity Line Of Credit. This lets you borrow against the equity in your home with a credit account, checking account and/or direct payment. Is your loan owned by Fannie Mae or Freddie Mac and if so, do you have at least 5% equity in your home? The higher the Loan-To-Value (LTV) number the better for you. Most lenders expect you to have at least 10% equity in your home to qualify. 10% equity in your home gives you have a Loan-To-Value (LTV) of 90%. However, if your loan is owned by Fannie Mae or Freddie Mac, your LTV could be 95% - meaning you only need to have 5% equity in your home to qualify. Contact the company where your mortgage payments are sent and ask them about your LTV. Because each situation is unique, there are several more things to consider. Spend a little bit of serious time researching this topic until you are satisfied with the quality of answers you have found in regard to your own situation. The wrong decision could... well, hurt. The right decision could end up saving you quite a nice little nest egg.
RELATED SITES
Copyright © 1995 - Photius Coutsoukis (All Rights Reserved). |
ARTICLE CATEGORIES
Aging Arts and Crafts Auto and Trucks Automotive Business Business and Finance Cancer Survival Career Classifieds Computers and Internet Computers and Technology Cooking Culture Education Education #2 Entertainment Etiquette Family Finances Food and Drink Food and Drink B Gadgets and Gizmos Gardening Health Hobbies Home Improvement Home Management Humor Internet Jobs Kids and Teens Learning Languages Leadership Legal Legal B Marketing Marketing B Medical Business Medicines and Remedies Music and Movies Online Business Opinions Parenting Parenting B Pets Pets and Animals Poetry Politics Politics and Government Real Estate Recreation Recreation and Sports Science Self Help Self Improvement Short Stories Site Promotion Society Sports Travel and Leisure Travel Part B Web Development Wellness, Fitness and Diet World Affairs Writing Writing B |