Home Loan Refinance When is a Good Time to Refinance a Home Loan

<h1>Home Loan Refinance When is a Good Time to Refinance a Home Loan</h1>Author: <a title="Walter Shkolnik" href="http://www.articlesbase.com/authors/walter-shkolnik/19908.htm">Walter Shkolnik</a> If you have a home loan, and you think that your property went up in value by ten percent or more since your took out that loan, you might be a good candidate to refinance. It can save you money on your mortgage payments; improve your terms, or both. Here is why:

When you take out a home loan, bank uses your home as collateral for the loan. The more expensive the collateral is, the lower the bank’s risk that you will default on the loan and walk away from that collateral. So, if over the years, the collateral grows in value, bank’s risk is reduced and therefore you should be able to qualify for a lower rate. If your home went up in value by ten percent or more, banks will consider your home loan to be a less risky investment, and therefore should be able to offer you a lower rate. This is assuming that you kept the same job and income, made all of your payments on time, and market interest rates are the same or lower.

Lower interest rate can benefit you in several ways. You can either refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner. For example, if you have a 30 year fixed loan, you could refinance it at a lower rate in to a 25 or even 20 year loan, and keep your payments about the same.

Before deciding to refinance your home loan, you need to consider the cost of doing the refinance, and then compare it to savings. If it is costing you $5,000 to refinance, and your savings are only $25 per month, it is not worth it because it would take you over 16 years to just brake even. But if your savings are $250 per month, or 5 years worth of mortgage payments, it is probably a good idea to refinance you home loan at that time.

Walter Shkolnik is a Loan Consultant employed by Express Capital Funding Group, <a href="http://www.expfunds.com." target="_blank">www.expfunds.com.</a> He has over ten years of experience Financing Real Estate transactions.

About the Author: Walter Shkolnik is a Loan Consultant employed by Express Capital Funding Group, <a href="http://www.expfunds.com." target="_blank">www.expfunds.com.</a> He has over ten years of experience Financing Real Estate transactions.Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/mortgage-articles/home-loan-refinance-when-is-a-good-time-to-refinance-a-home-loan-128678.html" title="Home Loan Refinance When is a Good Time to Refinance a Home Loan">Home Loan Refinance When is a Good Time to Refinance a Home Loan</a>

If you have a home loan, and you think that your property went up in value by ten percent or more since your took out that loan, you might be a good candidate to refinance. It can save you money on your mortgage payments; improve your terms, or both. Here is why:

When you take out a home loan, bank uses your home as collateral for the loan. The more expensive the collateral is, the lower the bank’s risk that you will default on the loan and walk away from that collateral. So, if over the years, the collateral grows in value, bank’s risk is reduced and therefore you should be able to qualify for a lower rate. If your home went up in value by ten percent or more, banks will consider your home loan to be a less risky investment, and therefore should be able to offer you a lower rate. This is assuming that you kept the same job and income, made all of your payments on time, and market interest rates are the same or lower.

Lower interest rate can benefit you in several ways. You can either refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner. For example, if you have a 30 year fixed loan, you could refinance it at a lower rate in to a 25 or even 20 year loan, and keep your payments about the same.

Before deciding to refinance your home loan, you need to consider the cost of doing the refinance, and then compare it to savings. If it is costing you $5,000 to refinance, and your savings are only $25 per month, it is not worth it because it would take you over 16 years to just brake even. But if your savings are $250 per month, or 5 years worth of mortgage payments, it is probably a good idea to refinance you home loan at that time.

Walter Shkolnik is a Loan Consultant employed by Express Capital Funding Group, www.expfunds.com. He has over ten years of experience Financing Real Estate transactions.

Walter Shkolnik is a Loan Consultant employed by Express Capital Funding Group, www.expfunds.com. He has over ten years of experience Financing Real Estate transactions.

Rate this Article:

0 / 5 stars - 0 vote(s)

Re-Publish

Article Source: http://www.articlesbase.com/mortgage-articles/home-loan-refinance-when-is-a-good-time-to-refinance-a-home-loan-128678.html

Article Tags: Loans, Mortgage, Home, Loan, Rate, Refinance, Payment, Fixed, Lower, Low, Lowest, Payments, Monthly

Related Articles
Related Q&A

Latest Mortgage Articles
More from Walter Shkolnik

Help with mortgage arrears and repossession

By: Copywriting 4 U | 10/12/2009
If you are struggling to continue meeting your mortgage repayments and have suffered problems and found you have fallen into mortgage arrears, and you are faced with repossession and eviction by your lender, it is imperative that you take matters into your own hands and do something. If you do nothing and cover your head in the sand, hoping things will remedy themselves then you will more than likely lose your residence.

Increased Pressure on Mortgage Companies

By: Paul Escobedo | 10/12/2009
Mortgage companies have been receiving a lot of pressure since the mortgage crisis happen last year and in November the president’s administration decided to make loan companies renegotiate their borrowers loans.

WHY an FHA Mortgage over other Home loan options?

By: Florida Mortgage | 10/12/2009
There are many good reasons to choose an FHA home loan over other home loan options, especially if one or more of the following apply to you:

Florida FHA mortgage refinance up to 97.75%, No MIn FICO

By: Florida Mortgage | 10/12/2009
Take advantage of the many benefits of FHA refinancing your Florida home - from getting cash out, to lowering your monthly mortgage payment, to protecting your Florida home investment - our FHA mortgage refinancing programs give you financial breathing room up to 85% of your Florida home’s value

Refinancing A Mortgage - Considering Refinancing?

By: Myron E. Hunter | 10/12/2009
There are many avenues of refinancing available to homeowners who are deliberating whether to refinance their home. To help in deciding the best route, homeowners should first assess what their needs are. After these goals have been calculated, a refinancing expert should be consulted.

Home Equity FAQ

By: refinancefaq | 10/12/2009
Bank cancelled home equity. Can someone comfort me? Today me and my parents found out that the bank cancelled our home equity line of credit because the utility of the property went down. My mom is sick so she cant help out and even if i work similar to ive been doing i wouldnt make up the difference we entail every...

What Kind Of Answers Do You Get Online?

By: Rudy Silva | 10/12/2009
Do you know that internet provides you online answers? You can ask various questions at different sites for free. You can try paid services for specific information. Free Q & A sites only have limited sources. Online answers provide you with convenience. Read this article to learn the process of searching for an answer.

Equity Mortgage FAQ

By: qeokfaq | 10/12/2009
Do you accrue more equity at a faster rate from a 15 or 30 year mortgage? I'm in my 4th year of a 15 year mortgage, and I'm selling my home. If I had gotten a 30 year mortgage, would I enjoy more equity by now? you will always gather more equity...

Mortgage Loan Documents – Identifying Adjustable Rate Mortgage Loan

By: Walter Shkolnik | 25/04/2007 | Mortgage
If you ever signed mortgage loan documents, chances are that you’ve never read all of the pages that you signed. Most people don’t, because it is very time consuming and there is too much meaningless disclosure paperwork that has little or nothing to do with your actual loan and has more to do with lender’s compliance with State and Federal laws.

Debt Consolidation - Different Ways to Consolidate Debt

By: Walter Shkolnik | 10/04/2007 | Debt Consolidation
Keeping up with bills can be frustrating if you have more than a few financial obligations. Debt consolidation can make your life much easier. By combining several accounts in to one you can save a lot of time and money. Here are some of the most popular ways to consolidate debt:

Home Loan Refinance When is a Good Time to Refinance a Home Loan

By: Walter Shkolnik | 09/04/2007 | Mortgage
If you have a home loan, and you think that your property went up in value by ten percent or more since your took out that loan, you might be a good candidate to refinance. It can save you money on your mortgage payments; improve your terms, or both.