Refinancing your mortgage may be a good idea, depending upon your specific circumstances. In fact, refinancing may be a smart option for any homeowner. With a refinanced mortgage, interest rates are reduced, and monthly payments decrease as well. Refinance mortgages let you change the terms of your loan from a long-term arrangement to a shorter term one. This means you can pay off your mortgage loan must more quickly and save more money overall on the interest you pay. In most cases, the first loan you have on your home closed with high interest rates imposed. Refinancing your mortgage can reduce these interest rates, and by taking a second refinance mortgage, you can close your new loan at even lower interest rates and pay off the previous loan.
There is a particularly large impact on the funds you can accumulate through a refinance mortgage is interest rates range between one percent and two percent. For example, if your existing principal loan balance totals $150,000 and has an interest rate of six percent, your monthly payment for the loan in $899.30. If you decide to take a second refinance mortgage with a five-percent annual rate of interest and a term of thirty years, your monthly payment lowers to $805.23. The refinance mortgage would save you $93.77 on your monthly payments in this case.
If you think that this is too small an amount to get excited about, remember that this amount, when saved each month over time, will make a meaningful addition to your total assets. Using a refinance mortgage calculator, you can find out how much the total interest amounts for each loan. In this case, the first loan would have an interest rate bill totaling $173,757.28 after one year. The refinance mortgage would only have an interest bill of $139,883.68 over the same period. This lets you save as much as $33,873.61 on the refinance mortgage interest alone. You can probably think of something to do with that amount of saved money.
Besides providing you with significant savings, refinance mortgages also make for greater loan satisfaction. If you think the terms of your existing loan are bad, you can make a change and pay it off with a refinance mortgage. These mortgages give you the chance to get away from the lender whose services or programs you do not like. If you do not like the duration of your loan, you can use a refinance mortgage to alter these terms. You may want to take a shorter term on your loan, while still being able to repay the current loan.
Another benefit of the refinance mortgage is that it will help you eliminate the inconvenience of receiving several bills at the end of every month. When you take a second refinance mortgage, you can consolidate all of your debts into one, single monthly bill. This means much less confusion and a lower possibility of forgetting a bill and having that debt remain unpaid. You could even save yourself from being harassed by collections agents by taking a second refinance mortgage.
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Frequently Asked Questions
Jumbo Refi
By: Billybob | 24-07-2008
My credit score is 750. I have my home for sale in this market and I owe about $550.000 I want to refi and cashout $100,000 for the new biz and pay bills till the house sells. My problem is I have been a sub S corp for 25 years and resently expanded so my w2s show a loss. My home has been assest for taxes @ 1,2M where can I get a jumbo refi with all this?
Signs of a Bad Mortgage
By: Sobe | 24-07-2008
I just purchased a foreclosed home. We were suppose to close tomorrow on it. Just found out the lending company does not close on foreclosures unless it is on a Monday or Tuesday. At this point we cannot shop for another lender. I was told by my broker my file is a tough one and we are stuck with this lender. Is this a sign of a bad mortgage already? It is an FHA loan, which the good thing is the interest rate will be fixed.
PMI Question
By: zomble1243 | 24-07-2008
we purchased out home a year ago and our pmi (private mortgage insurance) is 642.00 a month they told me I could refinance in 3 months and have the house reappraised and as long as I was at 80% they would remove it..Guess what they will not refinance me because I was late due to the PMI and now I am stuck with PMI in the amount of 642.00 a month till I pay my mortgage on time for 24 months which will never happen cause we can't afford it..Is this legal?
Assumption Deed
By: jowalker33 | 24-07-2008
My aunt wants me to assume her note. A mortgage agent told us to have her put me on the her deed. We were told by a title company here in Louisiana that she could not do that instead we had to do an assumption deed. The mortgage agent told her to add me to her mortgage for 6 months and then I could refinance on my own. The title company recommends that I just do the assumption deed. My question is will the loan company Countrywide allow me to finish buying my aunt's home without qualifying for the loan. I just started my own business and I cannot verify my income. So I took a fulltime job so I can provide 2 check stubs to qualify for the refinance. Can you please tell me which solution is the better one and will I actually be able to purchase the home. My aunt's loan is a 30 year unassumable loan. Also, I was told that she can't just add me to the mortgage.
Questionable Insurance Practice
By: Mr Leroy Carter | 24-07-2008
Hi David, alaollowed the insurance to expire on my resident for two month before I reinstated the insurance, Feb and Mar 2008 was the period without. Now Aug 2008 the lender is charging me for the period gap, They are not providing new insurance because I have ins. can they grandfather me and not provide something in return?
American Home Mortgage is in foreclosure, have ...
By: Linda | 24-07-2008
American Home Mortgage is in foreclosure, have they been purchased? I have tried repeatly to contact them. Left on hold for hours or hung up on.
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