Considering refinancing? There are so many alternatives, how to pick the right one? We have gathered the most useful and up to date information for choosing the right refinancing option for you. We hope this site proves useful for you in your quest! Don't forget to bookmark us!
by Carrie Reeder
Refinancing an adjustable rate mortgage (ARM) is a common practice for borrowers. However, it may not always be the best option. Depending on how high interest rates climb, there are cases when you could end up spending more on converting your mortgage than you would save with a locked in interest rate.
Adding Up Costs
Before you jump on a refinancing offer, consider the upfront costs. To refinance a $100,000 loan, you can expect loan fees to range from $1000 to $3000. That is not including points for lower rates.
In order to recoup these origination costs, you need to be planning to spend several years in
your home. Also, if you only have a couple of years left on your mortgage, you may be better off with your original mortgage.
Benefits Of Refinancing
Locking in a low rate is the most common benefit to refinancing an ARM. By converting to a fixed rate mortgage, you are guaranteed a low interest without worrying about yearly interest rate fluxes.
You can also build up your equity sooner by converting to a biweekly mortgage or short term loan. With larger monthly payments, you can potentially save thousands on interest payments.
When Not To Refinance
With an ARM there is always some
risk involved, but there are cases when keeping your ARM makes financial sense. For instance, unless interest rates will rise more than a couple of percentage points over the course of your loan, you will probably pay more in loan fees than you will save. You should also keep your ARM if current rates are only 1% or lower than your ARM's rate.
You may also want to keep your ARM if you are planning to move soon. With homeowners moving within seven years of buying a home, it doesn't make sense to refinance when you won't recoup the costs.
Picking A Lender
Just like with any mortgage, you want to be sure that you
have researched several lenders before choosing one. Request quotes on both rates and fees. You will need to add up total costs to find the best financing package. You can also use the internet to find online mortgage lenders. Many times these lenders will offer lower interest rates or low closing costs to remain competitive.
About the author:
See my recommended Home Mortgage Refinance Lenders for the lowest rates online. Carrie Reeder is the owner of ABC Loan Guide, which offers help finding low rate home mortgage loans.
Home Improvement: Home Equity Line of Credit versus Mortgage Refinance
Making home improvements, home remodeling, adding onto a home and debt consolidation are some of the most popular reasons people cash out on their home equity. But the question is, which should you choose, mortgage refinancing or a home equity line...read more
Lowest Interest Rate Mortgage Refinance Loans - 3 Ways To Get A Low Rate Refinance
The lower your interest rate on your refinance mortgage, the more money you will save. But not all refinance loans are created equal. To get the lowest interest rates, follow these three tips when applying for you refinancing. 1. Refinance...read more
Refinance questions you should ask yourself
Before you even consider a refinance, ask yourself this fundamental question: "Why do I need it?" "Many times, people take out a new, larger loan to pay off credit cards, automobiles or even to purchase another home," says Norm Bour, host of the ...read more
Refinance Your Car Loan - 3 Tips For Refinancing Your Auto Loan Online
Refinancing your car loan is an ideal way to lower your interest payments or reduce your monthly payments. By using online auto loan lenders you can be assured that you are finding the lowest rate. To be sure you are getting the best terms, follow...read more
Refinancing Your Home Equity Loan - How to Refinance a Home Equity Loan
Refinancing your home equity loan is simple when using online lenders. By comparing loan quotes, you can find the lowest costing refi solution. In addition, you can save time and hassle by completing your application online. In less than...read more
Refinancing Your House Mortgage - 3 Reasons To Refinance While Rates Are Low
Before mortgage interest rates begin to rise, homeowners should consider the advantages of refinancing now. Although we're witnessing record low rates, these rates will not last forever. Unfortunately, many homeowners will delay refinancing and...read more
Why You Should Refinance Your Credit Card
Getting the Right Rate Can Save YOU Thousands A credit card debt can be like the worst sort of trap. Like a wound that won’t heal, a monthly minimum payment – with ceaseless regularity and endless strain on your budget – leaves your account. ...read more
Need more information? Try a search: