Banking and Financial Investing |
||||||||||
|
Related Sites 2nd Mortgage Auto Insurance Banking Domain Parking Energy Tax Credits Fast Cash Finances Financial Services Lending Mesothelioma Million Dollars Money Lendor Mortgages Online Investing Second Mortgage Trademarks Interesting Sites Weddings Green Homes Search Nude Girls Gainesville Realtor Green Tax Credits PR Backlinks Real Estate No Spam Online Gaming Raleigh Real Estate VQIX
|
Are you stuck with an ARM that is about to go through the roof? You need to look into refinancing your home mortgage into a new, fixed rate loan that you can afford.
Advantages Refinancing may be undertaken to reduce interest costs (by refinancing at a lower rate), to extend the repayment time, to pay off other debts, to reduce one's periodic payment obligations (sometimes by taking a longer-term loan), to reduce risk (such as by refinancing from a variable-rate to a fixed-rate loan), and/or to liquidate some or all of the equity that has accumulated in real property during the tenure of ownership. In essence, refinancing a mortgage or other type of loan can lower the monthly payments owed on the loan either by changing the loan to a lower interest rate, or by extending the period of loan, so as to spread the re-payment out over a long period of time. The money saved can be used to pay down the principal of the loan, thus further reducing payments. Alternately, refinancing can be used to transform available equity in one's house into ready cash, available for other purposes or expenses. Another use of refinancing is to reduce the risk associated with an existing loan. Interest rates on adjustable-rate loans and mortgages shift up and down based on the movements of the various prime rates used to calculate them. By refinancing an adjustable-rate mortgage into a fixed-rate one, the risk of interest rates increasing dramatically is removed, thus ensuring a steady interest rate over time. Refinancing a loan or a series of debts can assist in paying off high-interest debt such as credit card debt, with lower-interest debt such as that of a fixed-rate home mortgage. The net savings between the two interest rates can then be applied either towards further paying down the debt, or other purposes. In addition, non-tax deductible debt, such as credit card or car loan debt, can be transformed into tax-deductible debt such as home mortgage debt, potentially lowering one's taxes or shifting one into a more advantageous tax bracket. This type of arrangement is often associated with a Cash-Out Refinance. Risks Certain types of loans contain penalty clauses triggered by an early payment of the loan, either in its entirety or a specified portion. In addition, there are also closing and transaction fees typically associated with refinancing a loan or mortgage. In some cases, these fees may outweigh any savings generated through refinancing the loan itself. Typically, one should only consider refinancing if one stands to save a substantial amount of money from doing so, either in the short or long-term, or if there is a need to extend the loan in order to pay for unexpected costs such as medical expenses. In addition some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan, depending on the type of loan used to refinance the existing debt. Calculating the up-front, ongoing, and potentially variable costs of refinancing is an important part of the decision on whether or not to refinance. |
|
||||||||
Banking and Financial InvestingBanking, refinancing, mortgage, 2nd mortgage, second mortgage, arm, adjustable rate, fixed rate, home equity, home equity line of credit, line of credit, equity loanTropical Fish - Tropical Fish - Banner Exchange - Tropical Fish - Tropical Fish - Add URL - Madison Celtics Soccer - Eco Friendly Power - No Domain Scammers Home - Privacy Statement - About Us Copyright 1995-2008 | ||||||||||