Main Benefits Of Refinancing Your Mortgage
Main Benefits Of Refinancing Your Mortgage
Free Online Articles Directory
Why Submit Articles?
Top Authors
Top Articles
FAQ
AB Answers
0 && $.browser.msie ) {
var ie_version = parseInt($.browser.version);
if(ie_version Hello Guest
Login
Register
Hello
My Home
Sign Out
Email
Password
Remember me?
Lost Password?
Home Page > Business > Main Benefits Of Refinancing Your Mortgage
Main Benefits Of Refinancing Your Mortgage
Posted: Feb 17, 2009 |Comments: 0
|
]]>
Simply put, refinancing your mortgage means that you are converting your current mortgage into a new mortgage which is usually at a lower interest rate. Not surprisingly, most homeowners will refinance at least once during their lives. In fact, statistics show that the average homeowner refinances their mortgage once every four years. And even someone with poor credit can sometimes find it easier to refinance because they already have approval for the original loan.
The biggest advantage to refinancing your mortgage in the short term, as your monthly payments will be lower; and in the long term, as you may not pay as much in interest. The market value of your house and the amount of mortgage financed can also make a big difference. If your current mortgage is for several hundred thousand dollars, even a slight reduction in the interest rate will mean much lower monthly payments. An interest rate of just one point less can potentially save you around $5,000 on the average 15 year mortgage. Some financial experts advise that it is only worth refinancing if the interest rate on your new mortgage will be at least 2% lower than your current rate. This is only a generalization and ultimately the decision whether to refinance or not is up to you.
Apart from saving money, the other main benefit of refinancing a mortgage loan is to lower the term, or length, of the mortgage. If you have a 30 year mortgage and refinance to take advantage of lower interest rates, you may also be able to shorten the term of the mortgage at the same time. This will make it possible to own your home outright in less time. The monthly payments on a 15 or 20 year mortgage will surely be higher, but if you can afford to pay the extra amount, it’s an effective way to achieve home ownership more quickly. If you don’t want to refinance your mortgage, or you think you won’t really benefit from it, consider paying an extra amount towards the principal each month, a strategy that will also lower the length of your mortgage.
Refinancing also allows a homeowner who has an adjustable rate mortgage (ARM) to switch to a fixed rate mortgage, (FRM) not only saving money, but offering peace of mind as well. If mortgage rates are on the way up, it may be a good idea to refinance at a lower fixed rate; if you have a fixed rate mortgage at a rate that is on the high side, it may benefit you to refinance to an adjustable rate mortgage. Whether you go with the fixed rate or the adjustable rate ultimately depends on your finances, your short term goals and the general state of the economy. The terms and conditions of a fixed rate mortgage are also protected by law.
One of the benefits of refinancing is to use some of the equity in your home for other expenses. You don’t have to be nervous about doing some much needed home improvements, sending your child to college, or debt consolidation. Using the equity to improve your home will increase the value of your home even further. If you refinance with a larger principal amount in order to receive some cash back, it is known as cash out refinancing. A loan that is secured on your home usually, but not always, has a lower interest rate than various other types of loans, such as an unsecured loan and most credit cards. This method also allows you the convenience of extra cash without having to take out a second mortgage.
Even if interest rates have not changed, it may make sense to refinance if you didn’t have the best credit score when you originally applied for your loan. Lenders tend to offer lower rates and better terms to those borrowers with better credit. So if several years have gone by, you have paid all your bills on time and built up some credit, check to see if it’s worth your while to refinance your home. Your credit score can make a huge difference. A credit score that is below 630 can mean that your monthly payments are anywhere between $50 and $250 higher.
There are various costs and fees involved with refinancing your mortgage and you should consider carefully whether this option is right for you. Generally speaking, if you are going to save money, it probably makes sense to refinance. However, it also depends on your overall financial situation and whether you intend to stay in the house for more than a few years. If you live in a one bedroom condo with just your spouse and you are thinking about starting a family, it probably doesn’t make any sense to refinance. You should always consult your tax advisor and a mortgage broker to make sure that it’s the right decision for you.
Retrieved from “http://www.articlesbase.com/business-articles/main-benefits-of-refinancing-your-mortgage-777226.html”
(ArticlesBase SC #777226)
Liked this article? Click here to publish it on your website or blog, it’s free and easy!
shawn thomas -
About the Author:
Shawn Thomas is a freelance writer who writes about economic issues and financial products pertaining to the mortgage industry such a fixed rate mortgage as well as the lowest mortgage rates.
]]>
Questions and Answers
Ask our experts your Business related questions here…200 Characters left
How is a home equity line of credit calculated ?
Is the executor and beneficiary of a deceased estate allowed to undertake home improvements on the home which is already on the real estate market, without informing the other main benefactor?
I am on the deed as a co-owner, but am not on the mortgage. Can I get a home-equity loan by myself?
Rate this Article
vote(s)
0 vote(s)
Feedback
RSS
Print
Email
Re-Publish
Source: http://www.articlesbase.com/business-articles/main-benefits-of-refinancing-your-mortgage-777226.html
Article Tags:
real estate, mortgage quote, adjustable rate mortgage, credit, line of credit, home equity, mortgage rate, mortgage insurance, home mortgage lender, mortgage loan, mortgage backed securities, mortgage fees, home loan, first time homebuyer
Latest Business Articles
More from shawn thomas
How to Lock Your Mortgage Rate Before Lender Hikes It
Video explains how to lock a fixed rate mortgage on a home loan currently in the application process before you are caught by surprise when a sudden home loan rate increase takes place. The video tutorial also introduces a new daily real-time mortgage rate alert service for home buyers and those refinancing their current mortgage. (01:48)
Learn about Mortgage Rates and Points
Video explains with examples why mortgage points matter. Points are what actually move each business day since the actual rate is always available. It’s just a matter of how much it will cost you to obtain the rate. The video tutorial also publicizes a new daily real-time mortgage rate alert service for home buyers and those refinancing their current mortgage. (02:19)
Home Loan Mortgage Choices for your Next Home
Know the mortgage home loan choices before you get your next mortgage loan (04:20)
How to Choose the Right Mortgage
Learn the differences in interest rates from fixed rate, variable rate and interest only types of mortgages. (01:49)
Whether you’re buying a home, refinancing your current home or consolidating debt there is a mortgage loan for you regardless of your past credit history. Options are available for borrowers with credit scores as low as 350! (05:25)
Mortgage Loans in Pennsylvania
You’ve found a beautiful piece of property in one of the upscale areas of Pennsylvania and you’re wondering if you can get the best mortgage loan that’s available in the market.
By:
Brian Jenkinsl
Finance>
Mortgagel
Aug 12, 2008
What Causes Mortgage Rates to Change?
It is important to understand what it means to have an adjustable mortgage rate. The United States government’s Department of Treasury set the initial interest rate, but banks add to that rate, which is why people have different interest rates. An adjustable interest rate is one that changes according to the national rate, so it will fluctuate over time.
By:
Jason Nicholsl
Businessl
Aug 26, 2009
Reverse Mortgages: A Beginner’s Guide
Reverse mortgages, once an unusual method of financing, have moved into the mainstream as the boomer generation reaches retirement age. Widely touted by such venerable organizations as the AARP and often insured by the federal government, reverse mortgages have acquired a great deal of respectability.
By:
Lisa Parkerl
Businessl
Aug 26, 2009
Working With Your Lender to Get the Best Mortgage Rate
When it comes to defining each of the fees, make sure you understand what is covered by each one. Here are some aspects of the mortgage deal to discuss with the lender. This will allow you to come back to the table, show the lender what you have learned, and provide him or her with the opportunity to match or beat the best of those other offers.
By:
Lucinda Jonesl
Ask These Questions when Working with a Mortgage Lender
There are so many factors and things to remember when you are looking for a mortgage, that it is easy to get confused or forget something important. The process of getting a mortgage is not one that is familiar to most people, therefore, it is easy to lose sight of some of the details, which can cost big money later. A very general rule of thumb is that if you will be in the mortgage without refinancing for at least five years, then you will noticeably save money by paying points up front.
By:
Allan Youngl
Businessl
Jul 13, 2009
Basic Requirements Needed to Receive a Mortgage
With the housing market in turmoil after the sub-prime mortgage crisis and the Federal bail-out of Freddie Mac and Fannie Mae, the basic requirements to receive a mortgage have tightened up. According to at least one real estate financier, to get a mortgage these days you”practically have to walk on water”.
By:
Brian Jenkinsl
Finance>
Mortgagel
Oct 21, 2008
lViews: 640
An Explanation of a Residential Mortgage
Buying a home is one of the most important decisions that most people will make in their lives. It’s likely to be the most expensive asset that most people will ever purchase. With the average home costing the equivalent of several years’ salary, it’s very rare that anyone can save enough money to pay for their residence with savings.
By:
Brian Jenkinsl
Finance>
Mortgagel
Oct 21, 2008
Fibonacci Killer Forex Peace Army-Fibonacci Killer
Did you ever heard from the Fibonacci Killer, the latest trading system which was released in 2010?
By:
FrancisGithinjl
Businessl
Jan 23, 2011
Eve Billionaire Review-Eve Billionaire
It is said that Eve Billionaire is the Richest Eve On line Participant breaks his silence and reveals all his secret ISK generating strategies.
By:
FrancisGithinjl
Businessl
Jan 23, 2011
Tradeshow Printing and Commercial Printing in New York
Do you need tradeshow printing or commercial printing in New York City? While it’s easy to think that the “Big Apple” has everything you could ever need, part of the challenge is actually finding the right company for what you need.
By:
Vikram Kumarl
Businessl
Jan 23, 2011
Mind Secrets Exposed Lps-Mind Secrets Exposed
Almost all of your existence you have been led to think that the prosperous and powerful obtained to in which they are because of 1 single stroke of luck, due to 1 fortunate break
By:
AlaLiml
Businessl
Jan 23, 2011
Choosing the Best NYC Printer for Your Large Format Printing Needs
When you need large format printing, many companies may not be able to provide this service to you at an affordable rate.
By:
Vikram Kumarl
Businessl
Jan 23, 2011
Great Catwalk Models Start Slowly
This article highlights the need to find a good agent if modeling as a career is to be pursued. It also goes on to show some scams which can occur along the way.
By:
Stewart Wrighterl
Businessl
Jan 23, 2011
Large Format Printing – Posters and Banner for Your Company
Do you need to make a big statement to your customers? If your business wants to attract attention you may need a large poster or banner in your place of business to promote a product or service.
By:
Vikram Kumarl
Businessl
Jan 23, 2011
Google On-line Jobs Available for Anyone Who’s Interested!
Google Online Jobs Obtainable for Anyone Who’s Interested!
By:
Brad Thompsonl
Businessl
Jan 22, 2011
When To Choose An Interest-Only Mortgage
An interest-only mortgage is just what the name suggests. It is a loan in which you are only paying the interest amount and not the principal. However, most interest-only mortgages only allow you to pay just the interest amount for the first five or ten years of the loan term.
By:
shawn thomasl
Businessl
Feb 21, 2009
What Is A Balloon Mortgage And How To Choose The Right Lender?
A balloon mortgage is a short term loan, which unlike a regular mortgage, isn’t paid off completely in regular payments. Instead, you are left with a portion of the principal amount, which then has to be paid off in a lump sum.
By:
shawn thomasl
Businessl
Feb 19, 2009
Ways To Purchase A Mortgage Online
The internet has meant that many transactions that once had to be done in person can now be accomplished online, such as applying for a mortgage. It is relatively easy and straightforward to compare costs and services from different lenders.
By:
shawn thomasl
Businessl
Feb 19, 2009
Tips For Choosing The Right Mortgage Lender
Our home is the single most expensive purchase that most of us make. A decision that is almost as important as which house to buy is which mortgage lender to use.
By:
shawn thomasl
Businessl
Feb 18, 2009
Main Benefits Of Refinancing Your Mortgage
The biggest advantage to refinancing your mortgage in the short term, as your monthly payments will be lower; and in the long term, as you may not pay as much in interest.
By:
shawn thomasl
Businessl
Feb 17, 2009
How To Begin Repairing Bad Credit
If you feel that your credit score isn’t as high as you would like it to be, there are some steps you can take to raise it. Firstly, make sure your credit score is accurate. It is estimated that around 25% of credit reports have serious errors on them.
By:
shawn thomasl
Businessl
Feb 17, 2009
How a Fixed Rate Mortgage Can be Beneficial When Buying a Home
If you are just about to buy a house, one of your most important decisions, almost as important as which home you buy, is what type of mortgage to take out. You basically have two choices; a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM) .
By:
shawn thomasl
Businessl
Feb 15, 2009
Add new Comment
Your Name: *
Your Email:
Comment Body: *
Verification code:*
* Required fields
Submit
Your Articles Here
It’s Free and easy
Sign Up Today
Author Navigation
My Home
Publish Article
View/Edit Articles
View/Edit Q&A
Edit your Account
Manage Authors
Statistics Page
Personal RSS Builder
My Home
Edit your Account
Update Profile
View/Edit Q&A
Publish Article
Author Box
shawn thomas has 7 articles online
Articles Categories
All Categories
Advertising
Arts & Entertainment
Automotive
Beauty
Business
Careers
Computers
Education
Finance
Food and Beverage
Health
Hobbies
Home and Family
Home Improvement
Internet
Law
Marketing
News and Society
Relationships
Self Improvement
Shopping
Spirituality
Sports and Fitness
Technology
Travel
Writing
Agriculture
Ask an Expert
Business Ideas
Business Opportunities
Corporate
Customer Service
Entrepreneurship
Ethics
Franchise
Fundraising
Home Business
Human Resources
Industrial
International Business
Leadership
Management
Negotiation
Networking
Non Profit Organizations
Online Business
Organizational
Outsourcing
Presentation
Project Management
Public Company
Public Relations
Sales
Six Sigma
Small Business
Strategic Planning
Team Building
Training
]]>
Need Help?
Contact Us
FAQ
Submit Articles
Editorial Guidelines
Blog
Site Links
Recent Articles
Top Authors
Top Articles
Find Articles
Site Map
Mobile Version
Webmasters
RSS Builder
RSS
Link to Us
Business Info
Advertising
Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2011 Free Articles by ArticlesBase.com, All rights reserved.
Popularity: 1% [?]
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
