Not sure what home refinancing or home loan refinancing means? A simple way to define it is they are special loans that equal to the principle of the amount currently owed along with altering the existing terms and agreement of the old loan. This is usually done for properties or home improvements. If you like many others are paying high interest rates on the loan, if you need cash liquidity, if you are stuck with an adjustable mortgage rate or even if you plan on consolidating your debts looking into refinancing you loan may be a great step. There are many different types of options that can be utilized by homeowners looking for better mortgage rates. Refinancing your current mortgage loan can help you redeem the current loan for a new loan which would bring better terms and a lower interest rate.

When to refinance

Refinancing you home loan if you have an adjustable mortgage rate for a loan with a fixed rate is a good move. However there is no set time when it is best to do so, it really depends on your situation and where you have set your finance goals. Ask yourself these questions to try and decide whether or not to refinance.

* How long do you plan to occupy your home?
* Are you willing to compromise for a lower interest rate?
* Are availing lowered payments worthwhile as compared to the cost incurred for the mortgage closing costs and the initiation fees?
* How much equity have you invested in your home? (Less than 10 years?)

Adjustable rate to a fixed rate

It is always best to get the lowest fixed rate possible when refinancing, however you must be aware of your current financial situation. If you do have an adjustable rate mortgage, (ARM), and your plans are to move within 3 years or so refinancing is probably not the best choice.

"Lock in" an interest rate?

It is impossible to predict the interest rates of the future. However, most times when mortgage rates skyrocket they tend to lower and become steady. So if you are looking into a home or mortgage loan refinance it is best to lock in a rate as soon as you can. It is always possible to refinance a home mortgage if the rates suddenly drop after. If the rates do drop chances are it does not drop low enough to affect you or your monthly payments. However everyone’s situation is different so make sure you review your situation and figure out what is best for you before committing to any solution.

Estimated value of a home and what it is actually worth.

Generally a homes estimated value is determined by a comparative market analysis or an appraisal. However the actual worth is established by what buyers are actually willing to pay for it. The price that a home is sold for is the “practical price” usually determined by the lending institutions or the bank.

-M Petrone
www.RefinancingCondo.com

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