6 Things to Consider Before 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 decision to refinance.

1. What's My Motive-and What Will It Cost Me?

Before you even consider a refinance, ask yourself this fundamental question: "Why do I need it?"

"Many times, people take out a new, larger loan to pay off credit cards, automobiles or even to purchase another home," says Norm Bour, host of the nationally syndicated U.S. radio program The Real Estate & Finance Show, and an experienced mortgage lender. "Sometimes they need the money to do home improvements or renovations."

If, however, you want to lower your current loan payments or switch to a different type of loan, you must calculate the benefits before going the re-fi route.

"If someone is going from a fixed loan to another fixed loan, my general benchmark is to see a 1% reduction of interest rates to justify it," says Bour, who also teaches money-management classes in Southern California. "Sometimes the borrower goes from a fixed-rate loan to an adjustable to lower his payments. Sometimes he does just the opposite-maybe to get away from interest-rate volatility. These are very personal decisions, specific to each individual client."

2. How Long Will I Be in the Property?

You may already know-or suspect-that you will not live in your current home beyond a certain timeframe (perhaps 5 years). If this is the case, why would you even consider a 30-year loan?

"Sometimes, an adjustable-rate loan or a 'hybrid'-say, a 5-year fixed, then converting to an adjustable-makes the most sense," Bour says.

3. What Am I Worth?

Do your homework before trying to qualify for a new loan. You should know:

? The approximate market value of your property, as "loan to value (LTV) is one of the primary factors that control interest rate," Bour says.

? Your credit score, which will affect your overall ability to secure a loan, as well as the interest rates offered and the options available to you.

4. Do I Have a Competent Loan Officer?

In certain cases, refinancing may not yield "a monetary savings, per se," Bour says. This means there must be "compelling reasons" to secure a new loan, he emphasizes.

"A good loan officer will ask a series of questions to help the borrower identify his best option," Bour says. The officer should:

? Assess your current monthly cash flow and potential future risks.

? Calculate your monthly savings if you were to refinance.

? Determine how long it will take you to break even.

? Fully explain the different types of loans and interest structures.

? Disclose all closing costs and "hidden" fees (origination fees, escrow, title, underwriting, interest, taxes, insurance, prepayment penalties, etc.).

? Treat you with respect and as an individual-not come up with a one-size-fits-all, cookie-cutter approach to your financial future.

5. Do I Need a Second Opinion?

Because lenders have an interest (pun intended) in having you sign on the dotted line, it's often worthwhile to seek advice from a certified financial planner or other expert who has no investment or agenda when it comes to your refinancing decisions-especially if you're a first-timer who lacks fluency in real estate issues.

Accept your limitations, and have enough smarts to ask for help. A lot of money is riding on this decision, so never let pride get in the way of making the right choice.

6. Will This Hurt My Credit Rating? "While refinancing, in and of itself, will do very little damage to credit scores, what will cause harm is excessive shopping amongst too many lenders," Bour says. "Each time a credit report is pulled by a 'potential grantor of credit,' it shows up as an 'inquiry'-and each inquiry drops the credit score by a little bit.

"In the United States, the laws have changed over the past few years, and inquiries do not have the same negative impact as they used to. Most credit bureaus will now look at a 'cluster' of inquiries over a short period of time as being one inquiry."

--------

Mortgage Relief specializes in assisting Australian families with mortgages by making their monthly repayments more manageable and decreasing their overall debt and total interest paid over the life of their mortgage. Mortgage Relief is a mortgage refinance provider that it part of Australia's largest Debt Relief? organization. Visit Mortgage Relief on the web at http://www.mortgagerelief.com.au or contact them directly on 1300 789 014.

---

How To Save Money On Your Mortgage

Obtaining a home loan is arguably the most expensive transaction... Read More

Mortgage Questions to Ask Your Lender

Buying and financing a home today can be overwhelming. Here... Read More

Refinancing Mortgage Loan - Get The Lowest Interest Rate You Can When Refinancing

Refinancing can be a very simple process. You fill out... Read More

Mortgage Free In 15 Years!

Imagine paying your mortgage off in 15 years! Think of... Read More

The Truth behind Pension Mortgages

A pension mortgage may seem lucrative at the first sight.... Read More

Home Mortgages: Think Before You Borrow

In today's overheated housing market, lenders are making it easier... Read More

Who Else is Ready to have Their Money Work Harder for Them?

What does it mean to refinance? Why would anyone want... Read More

New Home Loan - 3 Tips To Speed Up The Mortgage Loan Approval Process

Imagine this: you've found the perfect house, and feel lucky... Read More

Home Mortgage Rate Shopping - Why Some Shoppers Give Up And Others Dont

About 29% of current homeowners and a much larger percent... Read More

Home Equity Loan ? When Does Refinancing Make Sense?

For the last two years, interest rates have been much... Read More

Jumbo Mortgage Loans - Getting Approved for a Jumbo Mortgage Loan Online

Getting approved for a jumbo mortgage loan online is similar... Read More

The Top 5 Reasons to Buy a Home

1. Save on your income tax.Yes, something good can come... Read More

Save Money on Your Mortgage

You should say goodbye to PMI. You may not notice... Read More

A Guide to UK Buy to Let Mortgages

Essentially there is little difference between the process that one... 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

Financial Rebirth Through Remortgage

Seldom in ones life do we get a chance to... Read More

Bankers Dont Want You to Know That You Pay for Your No Cost Home Loan Forever

With mortgage rates continuing on a downward trend, the competition... Read More

Bad Credit Loans Authenticate What Is Positive About Bad Credit

This might not be the front page news but it... 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... Read More

Finding the Best Mortgage Lender Online

Finding the best mortgage lender online is simply a matter... Read More

Home Equity Loan or Home Equity Line of Credit ? Which is right for you?

The most common type of home equity loan is the... Read More

Cash Out Refinance Mortgage Loans ? Home Equity, 2nd Mortgage or Cash Out Refinance Loan

There are some definite benefits to doing a cash out... Read More

Reverse Mortgage Offers Fresh Approach To Income From Real Estate

If you owe 40 percent or less of your original... Read More

Home Loans For People With Adverse Credit History

Whether you are planning to purchase a home for the... Read More

Thought You Can Go All Alone In Mortgages! Mortgage Advice Beneficial In All Important Decisions

Mortgages are easy as long as you understand them well.... Read More

Mortgage Sales Hit Problems

The housing market has been buoyant over the past few... Read More

To Refinance or not to Refinance -- Here is the Answer

I have written many articles on refinancing a fixed rate... Read More

What is the PayOption ARM?

Imagine an adjustable rate mortgage that allows you to pick... Read More

A Guide to Finding the Cheapest Home Improvement Loan

To find the cheapest home improvement loan that you can,... Read More

Thinking About Re-mortaging? Read These Tips First

More and more of use are signing up for limited... Read More

What is a Flexible Mortgage?

'Flexible mortgage' is a term that's used a lot, but... Read More

What is a Buy To Let Mortgage?

A buy to let mortgage is a mortgage on a... Read More

Getting The Best Rates On Mortgages And Loans

With an impending up-grade to the family due in a... Read More