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/

---

Refinance After Bankruptcy

Refinancing your mortgage after bankruptcy is actually the same as... Read More

Council Right To Buy Mortgage ? Transform Your Accommodation Into Home

Homeowner - does this term catch your attention every time... Read More

Fixed Rate Mortgage vs. Adjustable Rate Mortgage

The most basic distinction between types of mortgages that are... Read More

Buying A Home With No Money Down or Bad Credit - PMI Can Make It Easier

Private mortgage insurance is an excellent method for homebuyers who... Read More

Refinance Your Property Online

By refinancing your property online you can take advantage of... Read More

What is a Self-Employed Mortgage?

Self-employed mortgages, as the term implies are mortgages designed for... Read More

Refinancing After Bankruptcy

Refinancing after a bankruptcy can seem like an especially difficult... Read More

Real Estate Mortgage Loans Online

Online real estate mortgage loans enable borrowers to be sure... Read More

Home Equity Loan ? With a Reverse Mortgage, Your Home Pays You!

The home equity loan has become quite popular in the... Read More

The Best Way To Get The Right Mortgage

Are you thinking of buying a home? If so, then... Read More

What to Really Expect for Closing Costs

Closing on a property is a very challenging time for... 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

Mortgage Basics for First Time Home Buyers

Anyone planning to take out a mortgage for the first... Read More

Preventing Foreclosure Proceedings and Understanding Your Options

Every year over 8 million homeowners are seeking help preventing... Read More

How Much Interest is Your Home Equity Earning?

How much interest are you earning on your home equity?... Read More

What is a Homeowner Loan?

If you are a homeowner, it couldn't be easier to... Read More

Shopping for a Mortgage, Avoid Three Common Mistakes

Buying a home or refinancing one is perhaps the largest... Read More

Buy to Let Mortgages

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

Doing a California Refinance Online

Californians are passionate people. I know. I have lived in... Read More

Home Loans ? Repair Credit Errors in Three Days!

Most consumers are aware that a history of paying bills... Read More

What is a Home Equity Loan?

A home equity loan is a loan that is guaranteed... Read More

Refinancing Your Home Mortgage Loan With Bad Credit

There are numerous reasons a person has bad credit. Late... Read More

How to Find the Best Home Improvement Loan

If you're looking for the best home improvement loan for... Read More

Buy a Home With a Government Grant? Avoid this Scam

If you watch enough late night television, you'll see advertisements... Read More

Foreclosure Scams To Be Aware Of

Homeowners facing foreclosure should be aware of unscrupulous lenders and... Read More

Home Mortgages: Up, Up and Away!

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

Choosing The Right Mortgage For You

This article will help you understand the differences between a... Read More

Sell Your Home and Invest at the Same Time

I continue to see the same For Sale signs in... Read More

Understand a Real Estate Appraisal

Happy New Year. Make a difference this year. "Pay it... Read More

Home Owner Loans Explained

How To Release Equity Locked Up In Your Home For... Read More

Your Mortgage Rate Compare and Save

When trying to obtain the best mortgage rate compare offers... Read More

Adjustable Rate Mortgages Offer Alternatives For Home Buyers

When looking for a mortgage to meet your needs, consider... Read More