When (And When Not) To Refinance Your Mortgage

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Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many common reasons why homeowners refinance: The opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a home’s equity in order to finance a large purchase; and the desire to consolidate debt. Some of these motivations have benefits and pitfalls. And because refinancing can cost between 3% and 6% of the loan’s principal and – like taking out the original mortgage – requires appraisal, title search and application fees, it’s important for a homeowner to determine whether his or her reason for refinancing offers true benefit. TUTORIAL: Mortgage Basics Securing a Lower Interest Rate One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, many lenders say 1% savings is enough of an incentive to refinance. Reducing your interest rate not only helps you save money, but it increases the rate at which you build equity in your home, and it can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 9% on a $100,000 home has a principal and interest payment of $804.62. That same loan at 6% reduces your payment to $599.55. (To learn more about the home costs, see Mortgages: How Much Can You Afford?, Home-Equity Loans: The Costs and The Home-Equity Loan: What It Is And How It Works.) Shortening the Loan’s Term When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another loan that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9% to $5.5% cuts the term in half to 15 years, with only a slight change in the monthly payment from $804.62 to $817.08. Converting Between Adjustable-Rate and Fixed-Rate Mortgages While ARMs start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate as well as eliminates concern over future interest rate hikes. Conversely, converting from a fixed-rate loan to an ARM can also be a sound financial strategy, particularly in a falling interest rate environment. If rates continue to fall, the periodic rate adjustments on an ARM result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop. Converting to an ARM may be a good idea especially for homeowners who don’t plan to stay in their home for more than a few years. If interest rates are falling, these homeowners can reduce their loan’s interest rate and monthly payment, but they won’t have to worry about interest rates rising in the future. Tapping Equity and Consolidating Debt While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt. It’s important to keep this in mind when considering refinancing for the purpose of tapping into home equity or consolidating debt.
Source: investopedia.com

Video: Refinance Home Mortgage Adivce | Refinance Underwater Mortgage | 1-800-463-5049

Mortgage + Refinancing Calculator

BLR or base lending rate is a term predominantly used in Malaysia. In many countries, it is known as the ‘prime lending rate’. The central bank will determine a BLR (currently stands at 6.6%) which functions as the base against which all financial products will be offered. Bank A which offers BLR-1.8% means an effective interest rate of 6.6-1.8 = 4.8%. Bank B which offers BLR-2.4% effectively incurs an interest rate of 4.2% which, judging on this single criterion, is a better alternative. You may also view the following infographic by iMoney.my for easy understanding.
Source: chutzpahism.com

Mortgage Refinance Calculators Recommended By Ufmb

The mortgage refinance calculators are available in several types namely, 3a, 1b, 1c, 3b, 3f, 3c, 3e and 3d. There are many situations when the mortgage refinancing pays really. To save the money on the refinance, one must stay in house longer than break even period over which interest savings will just cover refinance costs. An example is refinance calculator 3a that is used in the refinancing single FRM into one another FRM allowing to consider all factors affecting profitability of the refinancing a mortgage. All these do include time value of taxes, money, and the differences in cost of the mortgage insurance between old and the new mortgage. The calculator assumes only a mortgage and that you do not take cash out of transaction.
Source: freepressindex.com

Refinance Calculator For The Purpose Of Home Mortgage

All in all, we can easily say that refinance calculator offers a number of benefits and features for the purpose of home mortgage. With a little bit of professional help and guidance online one can easily make the best use of a refinance calculator. So, these are some of the most interesting points that you should remember in this process. Once you know each and everything about this process you will be able to carry out home mortgage in a significant way. Read this article carefully if you want to know anything more about a refinance calculator. It could be of great help and guidance to you. For more information you can talk to an industry expert.
Source: offwestend.info

HARP 2.0 Program Eligibility Guidelines and Calculator to Check Refinance Qualifications

Announced in March 2009, HARP is a federal government program designed to help 5 million underwater or near-underwater homeowners refinance into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP. On Oct. 24, 2011, President Obama announced an overhaul to the HARP program with the intent of reaching more underwater homeowners. The expanded HARP program – also referred to as HARP 2.0 – will take effect on December 1, 2011 for borrowers with a loan-to-value ratio of less than 125 percent and in the first quarter of 2012 for borrowers with a loan-to-value ratio of greater than 125 percent.
Source: zillow.com

PMI Group latest mortgage insurer to give Fannie Mae short

Short sales, an alternative to foreclosure, have struggled to take a larger share of the market away from REO sales, which take place after the property is repossessed. However, the alternative has increased dramatically during the crisis. In the fourth quarter of 2008, the GSEs completed roughly 6,000 short sales and deeds in lieu.
Source: housingwire.com

Cap mortgages; let the bankers shriek

It is now time to bring to an end a bank’s freedom to set its own lending criteria. This is a much less radical idea than it first sounds. The convention that property buyers could borrow no more than three- to three-and-a-half times income broke down at the end of the 1970s. The cap was effectively enforced by the Bank of England’s then-robust capital constraints on banks and building societies. Thatcher threw many of those controls away, while in the last decade the demutualised societies (although Nationwide participated as well) went on their own borrowing spree in the wholesale market. Much of the cash was then blown on dodgy buy-to-let and self-cert loans.
Source: theguardian.com

How much house can I afford? – Buying Calculator

When you’re buying a home, mortgage lenders don’t look at just your income, your assets and the down payment you’re able to make. They look at your liabilities and obligations as well, including auto loans, credit card debt, child support payments, potential property taxes and insurance premiums, and your overall credit rating. Use this calculator to determine how much of a mortgage you may be able to obtain.
Source: msn.com

Mortgage applications slip as refinancing activity heads down

KEYWORDS Finance / Person Career / Real estate / Contact Details / Economy of the United States / Mortgage / Personal finance / Refinancing / Mortgage loan / Mike Fratantoni / Banking / Adjustable-rate mortgage / Law / Commercial mortgage / Federal assistance in the United States / United States housing bubble / Jumbo mortgage / Home / Mortgage industry of the United States / Fixed-rate mortgage / Total
Source: housingwire.com