5 Mortgage Refinancing Tips
Homeowners everywhere need to save money. Their has been a lot of talk recently about mortgage refinancing and its potential to save a homeowner a lot of money on their home loan. Mortgage refinancing, depending on your personal finances, can be a good or bad decision. Here, I have included some tips which will help, and could save you a lot of money, should you decide to refinance your home loan:
1)Mortgage Refinancing with Points or without Points
Lowering interest rates should be the ultimate goal of a homeowner who is looking to save money. Homeowners will need to figure out the benefits of paying points up front, versus having a lower interest rate. Depending on what you choose, and how long you plan on living in your home, you need to figure out the benefits taking these factors into consideration.
2)Mortgage Interest Rate Games
Do not be a victim for mortgage lenders who advertise 0% interest rate home loan refinancing. Typically, these mortgage lenders will try to get you into a low interest arm (adjustable rate mortgage) loan, which will inevitably skyrocket in the future, and leave you in a bad financial spot, again.
3)Watch out for hidden fees and costs associated to refinancing your home loan.
If it seems like the new mortgage rate you are able to get is much lower than you thought it would be, there is probably a catch. Make sure to find out how much all associated closing costs and fees are prior to signing and mortgage refinancing deal.
4)Get a “Good Faith Estimate”
A good faith estimate is a document which is a valid quote for a mortgage which is valid for 3 business days. Take this time to carefully review and compare your potential mortgage to other lenders options.
5)Know how long you plan on living in your home.
Sometimes the costs of refinancing a home loan can be outweighed by the savings if a homeowner is not planning on living in the home for an extended length of time. Typically 6 years is when homeowner breaks even and will start to see savings from refinancing a home loan.
Mortgage Refinancing – Help, Advice, and Tips
Mortgage refinancing is a very popular option for a lot of homeowners who are looking to save money. In general refinancing a home loan is easy to do. However, there are some simple tips which can help you save time and money.
Mortgage Lenders
There are all types of mortgage lenders competing for your business today. Some of them do not even have a traditional brick and mortar location, just an internet presence. While all traditional mortgage lenders typically operate the same, the are hardly alike. Look for a mortgage lender who offers low interest rates, low closing costs and fees, and good customer service. That is the winning trifecta needed for a homeowner to have a good refinance.
Homeowners with bad credit should look at sub prime mortgage lenders. While their interest rates are generally higher than a standard refinancing option, they are usually better than a person with bad credit would be able to get through a standard mortgage lender. Sub prime refinancing, while not the best option, may still be beneficial for homeowners in certain financial situations.
Mortgage Loan Types
When refinancing, a homeowner will have a wide variety of loan and rate choices. In general, a fixed rate has a higher interest rate than an ARM (Adjusted rate mortgage) but is often the better financial move to make. Fixed rate home loan offer long term financial stability, and a homeowner with a fixed rate loan will never see an interest rate increase.
Homeowners who are no planning on staying in their home for long or are in other situations may want to opt for an ARM loan. These loan types sometimes offer an introductory fixed rate, sometimes for up to 36 months. Homeowners who think they will be getting a large amount of cash, moving, selling, or who believe their credit will dramatically increase in the future, should think about an ARM loan. Then refinance into a fixed rate mortgage in the future when conditions improve.
3 Mortgage Refinancing Money Saving Tips
With mortgage refinancing becoming much more popular lately, many homeowners do not know what to look for. Many homeowners make a few costly mistakes when they refinance, which can cost them a lot of money. Here are some tips which can help you get the best mortgage refinance possible.
-Know the True Costs and Benefits of Refinancing your Mortgage
When refinancing, lower interest rates are always better. However, sometimes a lower rate comes with increased fees and costs. Many times, mortgage lenders and banks will advertise an ultra low interest rate, but make up for it with their extreme closing costs, fees, or qualifying standards. The best thing you can do is make sure the interest rates do not come with huge fees which would negate any potential savings.
-Know Why You want to Refinance
Are you interested in getting lower interest rates? Want a lower monthly payment? Need to get out of an ARM loan and into a fixed rate mortgage? Want to get some cash from your homes equity? There are many options available for homeowners who want to refinance. You can get a lower interest rate, change the length of your mortgage, of get cash back. All of these options have drawbacks and advantages. Each situation will determine the appropriate mortgage, but make sure you know your options.
-Compare your Options and Different Mortgage Lenders Quotes
Always make sure to comparison shop between different lenders, their options, and their costs. Most of the time, you will get a different quote from different lenders. Everyone charges different fees and costs, and have different requirements to qualify for a lower interest rate. Be sure to get several quotes from potential mortgage lenders, and pick the one which is best suited for you.
3 Mortgage Refinance Tips to Help you Save Money
Mortgage refinancing can be a great thing for a lot of homeowners to do. However, there are some common mistakes which homeowners make that can cost them time, and money. Here are some tips which will help you get approved the first time, and get the best mortgage refinance deal possible:
-Double Check All Documents
Homeowners need to realize that even a little mistake, on your application or credit rating, can carry huge consequences. Always request copies of your credit report, so you can check for errors. Small mistakes can get a homeowner denied, or not let them get the lowest interest rates they can. Also, the application to your lender is important. Always make sure all income and statements made on your refinancing application can be verified. If there are any questions which a lender can not answer, you will get denied.
-Compare Different Lenders and Mortgage Refinancing Options
When refinancing, always be sure to compare different mortgage lenders, and what they are offering you. Mortgage lenders and banks have all different restrictions and terms which can vary drastically. When you comparison shop different mortgage lenders, you are ensuring you get the best deal possible. This is just like shopping for any other large purchase.
-Know Why you want a Mortgage Refinancing
Make sure you have a reasons to refinance your mortgage. Many different reasons, and options exist for all homeowners. Picking the right one for you is crucial. You need to know if you want lower interest rates, smaller loan payments, or cash back from the refinancing. This will make choosing, and figuring out which refinance option is best for you.
Mortgage refinancing is often made to look a lot more difficult than it is. These few tips can dramatically decrease the cost of a home loan refinance.
The 2 Best Mortgage Refinancing Tips for All Homeowners
Mortgage refinancing, especially now with mortgage rates near all time lows, can benefit many homeowners. However, there are 2 things which all homeowners can do when refinancing which will ensure that they are getting the best deal possible. Here are 2 of the best tips all homeowners can use when refinancing a mortgage:
-Have a clear cut reason for refinancing.
Whenever your going to refinance your home, make sure you know why you want to. You do not ever have to refinance, yet many people can benefit from refinancing.
Do you want to get lower interest rates? Has your credit improved since purchasing your home? Want to shorten, or lengthen the length of your home loan? Want to use some of the equity you have built up in your home and use it as a low interest loan, so you can get cash back? These are all legitimate, and good reasons many homeowners refinance. While not everyone will benefit, homeowners who know what they want from it stand a much better chance of getting a beneficial home loan.
-Find the best mortgage lender.
Each lender or bank will have their own terms and conditions, as well as different costs and fees associated with refinancing. There also may be cost differences between getting a lower interest rate, or getting cash back, when your refinancing a mortgage.
Always be sure to shop around your situation to a variety of mortgage lenders. Once you obtain quotes which you like, from lenders who seem supportive in helping you reach your goal, carefully scrutinize each loan offer. Once you have 2 or 3 mortgage refinancing offers which you like, bring them to the competing lenders, and see if they can match or beat it. Often, a mortgage lender will lower some costs in order to make their offer a little more lucrative.
Mortgage Refinance Benefits
Mortgage refinancing can be a great move for a lot of homeowners. Mortgage rates are near all time lows, and new Government programs make getting approved easier than ever. Here are some of the benefits of mortgage refinancing a homeowner can look forward to:
-Refinancing into a Lower Interest Rate
Getting a lower interest rate is the main reason homeowners refinance. Many people have seen their credit improve, and interest rates go down, as the years have gone by. Getting a refinancing now, with rates as low as they are, can mean big savings for a homeowner who locked in an interest rate just a few years ago. Rates have dramatically dropped as a result of the struggling housing market, and homeowners who are paying a high interest rate should look into refinancing now while rates are low, and getting approved is easy.
-Changing the Terms and Conditions of a Home Loan
Many homeowners can benefit from simply adjusting the terms and conditions of their mortgage to meet their current needs. A lot of people refinance and change the length of their home loan. Shortening the mortgage will increase the payments, although this is not necessarily true if the interest rate you get is low enough. Pretty much regardless of why, extending your home loan will lower your payments, but increase your overall interest costs over the course of the mortgage. Make sure you do the math, and find the right choice for your personal financial situation, and goals.
-Getting a Cash Back Mortgage Refinancing
Many homeowners look into refinancing so that they can tap into some of the equity in their home. Many times, a cash back refinancing is cheaper than taking out a traditional loan. When refinancing like this, a homeowner is basically taking out a new mortgage which is bigger than their old one, and pocketing the difference. This is a great way to gather a large amount of low interest cash for any situation.
Mortgage and Refinancing Interest Rate Predictions
Mortgage rates are they key to saving money when refinancing a home loan. Right now, mortgage rates are around 5.19% for the average homeowner who refinances. However, my mortgage rate predictions are that interest rates will drop a little further, potentially saving homeowners a lot of money. Here are my mortgage rate predictions, and forecasts for 2009 and 2010:
Mortgage rates are near all time lows right now. Earlier in the year, home loan rates were at their lowest, around 4.69% for a typical fixed 30 year mortgage. When interest rates were that low, millions of homeowners needed help getting a better, or more affordable home loan. Homeowners literally rushed to mortgage lenders and banks to apply for refinancing. Very quickly, the lenders and banks became backed up with paperwork, and homeowners to help. To try to slow down the rush, mortgage rates were increased to 5.19%. While this rate is still very low, it was enough of an increase to slow down the rush.
However, now that mortgage lenders and banks are getting caught up, I predict mortgage rates will lower to their prior lows of 4.69%. Mortgage lenders and banks will be eager to have another rush of customers to help. To spur another wave of interest, rates will be dropped around .5%. While this may not seem like a lot, .5% can easily make or break a refinancing deal, and could be just what a homeowner needs to save a lot more money.
Mortgage refinance rates are not facts, just educated guesses. Homeowners should wait until these lower interest rates kick in to refinance. However, since interest rates are still very low, homeowners who are struggling and at risk of losing their home, should take action now. After the predicted rate drop, the interest rates will only be increasing.
5 Things You Could Do With $8000
With only three months left in the program that pays first-time homebuyers an $8000 tax credit, those hoping to take advantage of the offer will need to act quickly. November 30th is when the program is scheduled to expire and, even though some lawmakers are pushing for an extension, this is money that you might be leaving on the table starting December 1st. The money is part of the economic stimulus package and is reserved for first time homebuyers, which in this case can be defined as anyone who has not owned a home for the past three years and meets income requirements to qualify.
Most people can probably think of a lot of things to spend the $8000 on, but here are five ideas that you could consider if you’re a first-time buyer thinking of entering the housing market:
- Pay Down Debt: Purchasing a home when you’re in a position to do so can be a very wise financial decision. If you’re receiving $8000 as an incentive to make that wise decision, why not use that money to improve your financial circumstances? Most Americans carry a debt balance that they would love to reduce but it’s difficult to do when most of each paycheck is already reserved for other needs within your budget. An $8000 windfall could put a big dent in credit card debt or pay off a car or student loan and put you in a stronger cash flow position moving forward.
- Start A Business: With unemployment continuing to increase and many employees seeing their pay or hours reduced, the idea of starting a business to generate primary or supplemental income is appealing to many people right now. The average startup costs for a small business are between $10,000 and $15,000, so your tax credit could go a long way in funding your own small business and allowing your inner-entrepreneur to see what it can do!
- Purchase Health Insurance: If you are among the millions of Americans not currently covered in a health insurance plan, this money could be used to fund good health insurance for close to a year for many families. The government may or may not come up with a solution to insure those currently without the protection of insurance, but you’d sleep better at night in your new home knowing your family was covered in the event of a major medical expense.
- Upgrade Your New Home: Many of the homes being purchased today are at deep discounts compared to normal market prices, but the homes are usually also in need of some TLC. Your $8000 could be used to upgrade flooring, paint, appliances, or other areas that could make your house feel more like home to you. Doing at least some of the work on your own will stretch those dollars even further.
Start an Emergency Fund: In a poor economy, it’s a great idea to have some cash in a safe place to guard against a future job loss or some other financial hardship. This money should be kept in an FDIC insured, interest-bearing account. A good rule of thumb is that you should have 3-6 months worth of living expenses in an emergency fund.
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