What You Should Know About House Refinancing
By Charles Hopkins
Published 10/26/2007 | Business and Finance
The question is, Is house refinancing a wise move?
The answer is yes! Definitely! Now is the time to take advantage of the markets lowest interest rates.
The Current House Refinancing Market
There are a lot of advantages youd get from house refinancing. You would also save thousands of dollars after house refinancing and your monthly payment considerably lessened. You dont even have to have the best credit history or standing as you would still be able to find lenders who would be willing to lend you enough money for refinancing.
Refinancing would also certainly shorten the term of your mortgage loan. However, you dont have to worry about it significantly affecting your monthly payments. You could find a lot of brokers who would be wiling to help you analyze your financial state and pursue correct refinancing.
With the current interest rates at their lowest, you will certainly find different lenders who would be willing to give you the lowest interest rates that you can afford. There are sub-prime lenders whom you could resort to if your credit status is not too attractive.
Another benefit of house refinancing is the tax deductible mortgage interest rate. Unlike the interest on your other loans, interest rates on your mortgage could be claimed as a deduction from your gross income.
What to Consider when Refinancing
There are a lot of factors to consider when you opt for house refinancing. First and foremost, you have to choose a lender who would refinance your mortgage. You should also consider the kind of interest rate that you would be comfortable with. For example, opting to lock in your interest rate could guard against higher interest rates. This would enable you to save a lot of money from the difference between your locked in rate and the prevailing market interest rate. If you are planning to keep your house, it is better to opt for a fixed rate than an adjustable one.
Another factor that you would have to consider when refinancing your house is the term of payment. The goal is to save on interest by paying your loan early and short-term refinancing would do the trick.
What You Should Do Before Refinancing
There are some things that you have to do before you take a house refinancing loan. These things include:
1. Investigate your lender. This is the most important thing to do before you sign any contract. Most lending companies have website that you could visit to check their details and request for quotations.
2. Check interest rates before quotation. Mortgage rates can also be checked online. This could help you study interest rates trend, get some advice on this, and choose the kind of interest rate that you would want for your loan. It could either be fixed or adjustable rate.
3. Calculate your refinancing cost. Get some professional assistance if you need to, but it is best that you have a calculation of the probable cost to leave no room for surprises. Youd be able to adjust and budget your finances accordingly.
4. Know your term of payment. This would also help you budget your finances as well.