 |
Why Refinance Back into a 30-Year Loan?
One of the biggest reasons homeowners refinance their mortgage
is to obtain a lower interest rate and lower monthly payments. By
refinancing, the borrower pays off their existing mortgage and
replaces it with a new one. This can often be accomplished with a
no-points no-fees loan program, which essentially means at "no
cost" to the borrower.
In the no-points no-fees scenario, the mortgage consultant
uses rebate monies paid by the lender to pay off non-recurring
closing costs for the borrower. These are "one time" fees such as
escrow or attorney fees, title insurance, document preparation,
tax service, flood certification, processing and underwriting
fees, etc. The borrower is still responsible for recurring fees
such as interim insurance, property taxes or insurance policy
payments.
Refinancing typically occurs when mortgage interest rates drop
significantly, but borrowers with recently improved credit scores
(from paying off credit card debt, making mortgage payments on
time, etc.) are often candidates for better interest rates as
well. If you haven't checked your credit score in a while, it's a
good time to call a mortgage consultant.
The question most asked is, "But why should I go back into a
30-year loan?"
There are two schools of thought on this subject, and the
mortgage consultant should work hand-in-hand with the borrower's
financial planner to determine what works best for their mutual
client.
One option is to take the route of the "same payment" refinance, and actually pay off the loan faster
and save money on interest fees in the long-run. If refinancing
results in a lower monthly payment, the borrower can still
continue making the same payment they made in the original loan,
and the extra money will be applied to the principal balance.
For example: Let's say you have 25 years remaining in your
current loan, and you refinance back to a 30-year loan with a
slightly lower interest rate, resulting in a payment reduction of
$200 per month. (Note: This is just an example. The actual amount
could vary.) You could then take that extra $200 per month and
apply it toward the principal on the new loan. At this rate, the
loan will be paid off in 22 years and 4 months, which is 2 years
and 8 months less than the original loan.
On the other hand, if the borrower's financial planner is a
proponent of best-selling author and investment guru Douglas
Andrew's philosophies (see Missed Fortune), he or she may suggest
investing the extra money in a side-fund that could earn a better
rate of return and grow to the amount of the mortgage (and
beyond) in even less time. This method provides excellent
liquidity, but having more direct access to this money may be too
tempting for some homeowners.
Regardless of the reason for the refinance, the mortgage
consultant will need to know what the existing loan scenario
entails, review the homeowner's long-term goals, and provide a
comprehensive spreadsheet that compares and contrasts the various
loan programs available. Bear in mind, refinancing to obtain a
lower interest payment could also result in a lower deduction at
tax time. The homeowner's mortgage consultant and financial
planner should work hand-in-hand with their mutual client's best
interest in mind.
Mical Johnson is affiliate with Rock
Financial. For a free copy of The Certified Guide to Credit
Scoring contact Mr. Johnson at http://www.TampaMortgageGuy.com
 MORE RESOURCES updated Thu. February / 09 / 2012
|
AgedLeadStore.com to Add 1100000 Aged Mortgage Refinance LeadsMiddle East North Africa Financial NetworkCOM, January 26, 2012 ) Baltimore, MD AgedLeadStore.com is increasing its value for its customers by adding 1.1 million aged Mortgage Refinance Leads in February. This is important as many people depend upon their ability to refinance to make progress ... |
|
New HARP Could Help Up to 6.7 MillionNASDAQOther changes to the program were designed to make it easier for homeowners with private mortgage insurance (PMI) to refinance or to obtain a HARP mortgage refinance with a lender other than their current mortgage servicer. In addition, new limits were ...and more » |
Google News
|
|
|
RELATED MORTGAGE AND REFINANCING ARTICLES:
Applying Online For A
Home Loan Can Give You an Instant Approval
"Instant Approval For Home Loans" is a common refrain for
online mortgage lenders, but sometimes instant is longer
than you think. During regular business hours with a
typical application, you can expect the databases to
approve your application almost immediately.
13 Extra Costs to be
Aware of Before Buying a Home
Whether you're looking to buy your first home, or trading
up to a larger one, there are many costs - on top of the
purchase price - that you must figure into your calculation
of affordability. These extra fees, such as taxes and other
additional costs, could surprise you with an unwanted
financial nightmare on closing day if you're not informed
and prepared.
Home Equity
Loans
A home equity loan allows you to cash-in on the equity you
have built-up in your home. The funds you receive can be
used for debt consolidation, home improvement, college
education, investments or any purpose.
Refinance
Online
If you want a low interest, low payment mortgage refinance,
refinancing online could be the answer. There are many
mortgage companies who specialize in mortgage refinancing
online.
Seniors Can Use a
Reverse Mortgage to Fund Annuities, Investments, and
Insurance Policies
For many seniors in or entering retirement, the prospect of
purchasing long-term care, investments or annuities can be
cut short by a lack of retirement income. Statistics show
that 3 out 4 seniors will have to lower their current
standard of living during retirement.
Types of Home Equity
Loans
There are at least two types of home equity loans. The first
is a term or closed end loan and the second is basically a
line of credit.
Should You Get a Home
Inspection?
It's very important, and in my opinion, mandatory to have a
home inspection done before you close on a house. The
inspection helps with giving you an objective evaluation of
any problems with the home before you move in.
Low Home Mortgage
Interest Rate - Finding the Best Mortgage Rate
Interest rates are at an all time low, making now the
perfect time to purchase a new home or refinance your
existing mortgage. The interest rate you receive will
depend largely on your credit rating, monthly debt, and
your income.
Sell Your Home and
Invest at the Same Time
I continue to see the same For Sale signs in my
neighborhood. The houses just aren't selling.
Zero Down Mortgage Loans
- Is 100% Financing a Good Idea and Can You Get
Approved?
Are you wondering if you can get approved for a home loan
with 100% financing? Are you also wondering if its a good
idea to get a mortgage loan with no money down? Here are
some points to keep in mind as you apply and consider your
different mortgage loan options.To qualify for 100%
financing on a purchase mortgage loan, it would be
important for you to have a credit score of at least 600 or
higher.
Why Choose a Home Equity
Loan?
There are many reasons for choosing a home equity loan. A
home equity loan allows homeowners to obtain a loan in
addition to their original loan using the equity in their
home.
Stated Income Mortgage
Loan - Get Approved Online
A stated income or no doc mortgage loan allows individuals
with difficult to document income to buy a home. With a
documented credit score and reasonably stated income, you
can qualify for a mortgage at a slightly higher rate.
Benefits of a
Remortgage
There are many benefits in choosing a remortgage, some of
which are listed below.A remortgage is changing your
mortgage without moving your home.
What is a Home Equity
Loan?
A home equity loan is a loan that is guaranteed by your
home. Are you in urgent need for cash and want to get the
same without selling off your home or property? Getting a
home equity loan is a good way to do so.
The Top 5 Things You
Must Know Before Applying for a Mortgage
You've been thinking about buying your own home for quite a
long time, and now you're ready to take the plunge. You've
been saving money for a down payment, and you know the next
step is preparing to apply for a mortgage.
When is the Right Time
to Refinance Your Mortgage?
You've heard that interest rates are down and you think it
could be time to refinance your existing mortgage, but the
entire loan application process was so exhausting during
the initial loan that you aren't sure it's worth the
hassle. You could very well be right, but there are some
things you can do to help decide whether it's time to
refinance your mortgage.
How To Turn
Disadvantages Of A Reverse Mortgage To Your
Advantage
When it comes to a reverse mortgage, wise consumers weigh
the advantages and disadvantages prior to signing on the
dotted line.Let's start on a positive note, you could do
what most borrowers do and opt for the reverse mortgage
line of credit.
Are You Ready for a
40-year Mortgage?
Real estate prices have been increasing steadily over the
last five years, particularly on the East and West coasts.
In parts of California, homes are selling for 33% more than
they were a year ago.
To Refinance or not to
Refinance -- Here is the Answer
I have written many articles on refinancing a fixed rate
mortgage to an adjustable rate mortgage. I have helped
people cut as much as $800 off their monthly payments by
turning their high fixed rate mortgage loan into a much
lower ARM.
Bad Credit Loans
Authenticate What Is Positive About Bad Credit
This might not be the front page news but it is now out in
the open! 'Bad credit is getting loans - all kinds of
loans'. Lending institutions, banks and other financial
constitutions are coming forward to provide loans for bad
credit.
|
used office furnishings-supplies-equipment-desks-cubicles-service-counters for
sale in Akron Ohio
Die cast model cars for sale in Akron Ohio
used cars for sale in Akron Ohio
unfurnished homes for
rent in Akron Ohio
| first second
ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers
quotes florida houston gmac washington interest only 2nd software debt consolidation
reverse senior equity texas maryland options lending bad credit
option one ameriquest chase first banks emc residential california miami dallas est branch marketing
home company commercial yahoo online bad credit low credit no credit |
|
