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When does it make sense to try to refinance to get better mortgage rates?
Wiki User
∙ 13y ago
People refinance to get a better rate. Even one percent can make the difference in thousands and thousands of dollars of interest over the life of the mortgage, depending on how much was borrowed, how much is owed and the current terms. Your lender can advise you when re-financing is a good idea.
Talk to your mortgage lender. There are often costs associated with re-financing. Get assistance to calculate the actual savings of a re-fi when measured against the cost. It always makes sense to re-fi IF it will save money in the long run.
Wiki User
∙ 13y ago
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Does it make sense to refinance your mortgage at a higher rate for debt consolidation?
It depends on how much debt you have, what interest rates this debt carries, what rate your 1st mortgage is at, if you are disciplined enough NOT to incure any more debt once a refinance has occurred. If you have a good interest rate on your home loan I would leave that where it is and consider a closed end home equity loan (typically, these loans would be at a rate a bit higher that convention mortgage rates, plus this loan can be written such a way than repayment is spread over many years, and you only have one payment). If you chose to refinance your home, remember that discipline must be maintained to NOT incure any more unmanagable debt.
What are the advantages of a cheap fixed rate mortgage?
The advantages to a cheap fixed rate mortgage are that they offer rate and payment security in the sense that the rates or payment will never change especially over a period of time.
How can a loan refinance calculator help me refinance my loans?
The Refinance Calculator helps you determine whether a refinance makes sense for you. It will also explain why and give you the necessary motivate to help you make the right conclusion.
How soon can a mortgage be refinanced?
You can refinance your mortgage anytime you want to. There is no minimum time before you can refinance. That being said, you do need to be aware of any "prepayment penalties" or clauses. Some loans ( especially sub prime ) will have a prepayment penalty. If you refinance your existing loan before that pre payment period is over then you have to pay the prepayment penalty. These penalties can be as much as six months worth of interest. Check your original note to see if you have this penalty. If you do have a PPP then you need to weight the financial benefits of refinancing against the penalty. There are some cases where such a transaction still makes sense.
What if you can't afford the balloon payment?
Lenders do not want you to default on your mortgage. As with any other mortgage, in the case of the balloon payment, your lender will try to work with you to refinance your mortgage into payments you can handle. If you can't refinance, you may be forced to sell the property (unless the bank does it for you) to cover the balloon payment. Most people will be able to refinance, the question is just how high their rate will be. You do not have to use the same lender that your first ballon mortgage was with. Many lenders have programs for people with less than perfect credit. The only problem is your rate will be high, so you want to refinance as soon as you have a decent credit score to get a lower rate. If your balloon payment is coming due and you can not qualify for a loan because you owe more than the home is worth then talk to your lender about a shortsale or deed-in-lieu. If neither of these are available and a workout just isn't possible, it may make more financial sense for you to just walk away from the property.
Does it make sense to refinance your mortgage at a higher rate for debt consolidation?
It depends on how much debt you have, what interest rates this debt carries, what rate your 1st mortgage is at, if you are disciplined enough NOT to incure any more debt once a refinance has occurred. If you have a good interest rate on your home loan I would leave that where it is and consider a closed end home equity loan (typically, these loans would be at a rate a bit higher that convention mortgage rates, plus this loan can be written such a way than repayment is spread over many years, and you only have one payment). If you chose to refinance your home, remember that discipline must be maintained to NOT incure any more unmanagable debt.
Making Sense of Auto Loan Refinancing?
When people think of refinancing, most people think of refinancing a mortgage. This is certainly an option, but it is not the only one available. Refinancing can make sense in the case of your vehicle as well. Auto loan refinancing is useful in several situations, each different from the other. Some auto loans have an introductory rate that is lower than the later rate. In this case, the monthly payments could shoot up higher than you can afford. In this case, you will need to refinance to reduce your monthly payments. If your financial situation changes for the worse, you will need to refinance your auto loan for the same reason. If you find a better job or get a promotion, it may also make sense to refinance. You can refinance in order to increase your interest rates, pay off your car sooner, and pay less in overall interest. Finally, you can refinance by taking out a secured loan. Using your car as collateral in a new loan is considered a form of refinancing, and it offers loans with better interest rates than unsecured loans.
Why would anyone want to find the lowest interest mortgages rates?
People want to find the lowest interest mortgage rates in order to pay the least amount of money for their mortgage. It makes sense to look for the lowest mortgage rate when you are looking to buy a house.
If your mortgage has a two year clause does this mean you have to wait until then to refinance?
If I understand your situation, you mean your mortgage has a two year clause in the sense that it can't be discharged or "forgiven" in that time frame? If I were you, I would call a customer service representative with the bank that's holding this mortgage and ask them. It's hard to answer this question without looking at the particulars of your mortgage. Good luck.
What are the advantages of a cheap fixed rate mortgage?
The advantages to a cheap fixed rate mortgage are that they offer rate and payment security in the sense that the rates or payment will never change especially over a period of time.
Is a Refinance Loan Right For You?
The possibility that you might be able to refinance your home loan can become very tempting. This might be because you see the opportunity to reduce your interest rates. It could be because you want to escape and adjustable rate mortgage where the monthly bills are about to skyrocket out of your budgetary allowances. No matter why, refinancing your loan could save you money in the long or short term. It is important to realize that this is not always the case, however. You will need to analyze your current situation before you take out a refinance loan. The first thing that you will want to do is take a look at your current mortgage and look at its terms. What is your current rate? Will it adjust in the future, and if so, when? Find out how much your adjustable rate mortgage payments could change by finding out how the rate is indexed. Mortgage rates can change based on many factors. Some are set to adjust upward by a fixed amount, while others are based on an economic indicator. Find out if their is a penalty for exiting your loan early as well. Compare your interest rate with the current interest rates. If interest rates have dropped considerably since you took out the loan, you could save quite a bit of money with a refinance loan. The interest rate that you will actually receive will depend on more than the prevailing rates, however, so make sure that you take this into account. Consider how long you actually plan to stay in your home. Generally speaking, the longer you plan to stay in your home, the more you will save if you choose to refinance. If you plan to leave your current home in just a few years, it may not make sense to get a refinance loan. Find out at what point you will break even on a refinance loan. Find out your closing costs, and how much you will save each month. If you will be moving out before you have saved enough to pay for the closing costs, then refinancing will actually cost you, rather than save you money.
Would it be better for the parents to be the borrower rather than the cosigner for their kids on a refinance?
You should understand that if you co-sign a loan then you will be responsible for payment if the borrower defaults. Your credit will be affected by any late or missed payments because you will be held legally responsible for the loan in every sense. It sounds like you may be inquiring about a mortgage refinance. The borrower will be the owner of the property. The co-signer is the volunteer who guarantees the loan will be paid.
How can a loan refinance calculator help me refinance my loans?
The Refinance Calculator helps you determine whether a refinance makes sense for you. It will also explain why and give you the necessary motivate to help you make the right conclusion.
How soon can a mortgage be refinanced?
You can refinance your mortgage anytime you want to. There is no minimum time before you can refinance. That being said, you do need to be aware of any "prepayment penalties" or clauses. Some loans ( especially sub prime ) will have a prepayment penalty. If you refinance your existing loan before that pre payment period is over then you have to pay the prepayment penalty. These penalties can be as much as six months worth of interest. Check your original note to see if you have this penalty. If you do have a PPP then you need to weight the financial benefits of refinancing against the penalty. There are some cases where such a transaction still makes sense.
What if you can't afford the balloon payment?
Lenders do not want you to default on your mortgage. As with any other mortgage, in the case of the balloon payment, your lender will try to work with you to refinance your mortgage into payments you can handle. If you can't refinance, you may be forced to sell the property (unless the bank does it for you) to cover the balloon payment. Most people will be able to refinance, the question is just how high their rate will be. You do not have to use the same lender that your first ballon mortgage was with. Many lenders have programs for people with less than perfect credit. The only problem is your rate will be high, so you want to refinance as soon as you have a decent credit score to get a lower rate. If your balloon payment is coming due and you can not qualify for a loan because you owe more than the home is worth then talk to your lender about a shortsale or deed-in-lieu. If neither of these are available and a workout just isn't possible, it may make more financial sense for you to just walk away from the property.
Knowing About Refinance Interest Savings?
After a period of time, it makes sense to try and refinance a home loan or mortgage. After all, credit scores change over time as do interest rates and loan terms. This is a great way to save money on monthly payments and trying to pay off a home loan in a shorter period of time. With so many financial groups available around the world, there are many refinance options from which to choose. The following are some things to think about when looking into refinance interest savings. The first thing to think about is the goals of this refinancing. Some people want lower interest rates. Other people want lower monthly payments because of a decrease in job hours or a change in one's financial situation. Over time, people's credit scores can also change: becoming higher, more in depth, or lower. This is why it is important to really consider one's goals and know what to expect when it comes to interest rates. The next thing to look into is the duration or term of the loan. The longer a person has this refinance option, the longer it will take to repay a loan. This is why it is important to really consider any and all refinance loans, interest rates, and terms. Some people just want to pay a loan and be done with it. This is why a shorter time span or term is important. To calculate savings on a refinance option, one should do a few things. It is important to use one of many online calculators and to really think about how different interest rates and terms can affect a person. Having all this knowledge in place means that one can make the most of refinance interest savings. This is a chance to save a lot of money in the short- or long-term. Look into refinance options so that one doesn't have to spend more than necessary on this investment.
Can you refinance your mortgage while it's in foreclosure?
If you are in foreclosure it will be very hard to refinance out of it. If you are able to get current I would say there's a chance if your loan makes sense. You could possibly however get something called a, hard money loan, but the interest rate would be very high and you would have to pay a lot of money up front. If you are in foreclosure, I would try and short sale the property or become current.
