Apr 16, 2010
Considering Your Home Refinance Options
A home is one of the biggest investments that most people make during their lives. Being able to pay for your home will most often dictate a need for a mortgage to pay for the home over a period of time. There may come a time when you want to refinance your home loan, however, and knowing when you may need to do this is important. What are some of the cases where you would want or need to refinance your home?
Changing From An Adjustable Rate Mortgage (ARM) to Fixed Rate Mortgage
If your ARM loan has an interest rate that is higher than what is being offered for a fixed rate mortgage, you may want to refinance. This is most dependent upon how long you are going to stay in your home. If you only plan to stay for a couple more years, you can stick with your ARM loan in most cases, but if you plan to stay long-term, you will want to look into a fixed rate mortgage.
Lowering Your Monthly Payment
A drop in mortgage interest rates can make a significant impact upon your mortgage payment. By looking into home refinance, you may be able to decrease your mortgage payment. There are three conditions where you can lower your monthly payment through home refinance options, including getting a lower interest rate, changing the term of your mortgage, and getting an interest only mortgage loan where you pay only pay the interest for a specific amount of time.
Need Extra Cash
If you have built up equity in your home, you can undergo the home refinance process and borrow against the value of your home to get cash for home improvements and other needs. This can be a very viable option, especially if you have a need for additional cash and have equity in your home.
Consolidating Credit Card Debt
If you have quite a bit of credit card debt or have a high interest rate on your credit card debt, you can consolidate the debt in with your mortgage loan if you have equity on your home. If your home’s value is more than the loan balance, you can take the equity and pay off your credit cards. This is considered much “healthier” debt and the interest can be taken off of your income taxes.
Changing From A Fixed Rate Mortgage to an Adjustable Rate Mortgage
If you are not planning on being in your home for a long time, you may want to consider changing to a lower Adjustable Rate Mortgage Loan. This can save you a significant amount of money in payments to give you more money for other things in your life. This is a viable option if you are not going to stay in the home for more than a few years, because you will not have to worry about the interest rate increasing.
Deciding on a home refinance option will take some time and thought. To be sure that you make the best decision for you and your family, you will want to make sure that you carefully consider the ramifications of this decision. With careful thought and planning, you can refinance your home to make your financial situation stronger and more secure.
Video related to home refinance
Let’s talk about the Making Home Affordable Refinance program just rolled out by Obama’s Administrations. It’s designed to help you refinance into a lower interest rate even if your home value would normally disqualify you from doing this.
Frequently question about home refinance
Home Refinance?If you have a derogatory account on your credit report, will a mortgage company require you to pay it before allowing a refinancing loan?
I have a decent credit score
About Author
Joshua Suffie –
About the Author:
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You can not force the appraiser to value the improvements, they are NEVER part of the appraisal. The only thing you can do is try to force a change in the listed condition. If it went from from "poor" to "good" you appraise higher.
You can not force the bank to use any other appraiser then the one they have hired. It is their money.
As for your rhetorical question, it is because they borrowed MONEY. Cash money. Refusing to repay it does not make it a gift. They still owe a huge chunk after a foreclosure.
If you are unhappy with this bank you can try another, but your appraisal should not vary by much. They all use the same criteria.
Well your ARM expires next year so you should not have a prepayment penalty as most prepayment penalties are for 2-3 years.
Since you have been in your home for almost five years you should not have a problem with that old nasty PMI any longer and it should go away with the refinance, since the appreciation should have increased by now.
There might be a slightly higher rate for the 30 year mortgage and you can pay extra Principal each year. You can do the same thing with the 15 year mortgage also. I think you should take which ever you are comfortable with.
Which ever rate you eventually decide to get take, the entire amount is tax deductible as your lender will send you a document at the end of the tax year indicating how much you have paid. (You should check with your tax preparer for all tax advice)
I find that most people refinance about 5-6 years any way.
I hope this has been of some use to you, good luck.
"FIGHT ON"
FEAR – caused by watching too much economic news is driving your thoughts on selling the place. You haven't lost your job, and the loan payments haven't changed. The best thing to do is stay the course. If this fear gets the most of you, try renting one of your rooms. This will provide you extra income to allow you to feel more comfortable.