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Refinance Mortgage
Before I decide to refinance my mortgage, what should I consider when refinancing?
If you are considering refinancing your home, there are several factors you should keep in mind before making your decision. These factors include the interest rate on your current mortgage, the current market interest rate, how long you plan to live in your current home, and whether or not you need cash out for other things (such as home improvement, children's education, a new auto, or paying off credit cards).
Things to consider before refinancing:
- The Current Interest Rate
Always be abreast of the current interest rates. To get the benefits of a lower rate, keep in mind you may have to pay fees associated with the loan, unless your lender is doing a no fee loan. Before committing to a home mortgage refinance, be sure you have discussed the fee options with your loan officer.
- The Interest Rate You Are Paying
Bear in mind the interest rate you are now paying before refinancing. Compare it against the current interest rate to see how much you would save by refinancing your mortgage. Use our mortgage calculator to determine your new monthly payments. ( Hughes…mortgage calc. Button)
- Change your Adjustable to a Fixed rate:
Rates are at their lowest right now. Changing your adjustable rate to a fixed rate is a capital idea. Refinancing is the best way to do this.
- Consolidation
If you have several outstanding bills, you may want to consider mortgage refinancing your home and ultimately, consolidating and paying off your other high interest debts. Using the equity in your home is the smartest way to consolidate your debts. Some loans may use your home as collateral; however refinancing on the other hand does not. You could choose to apply that equity for children's education, a debt consolidation plan, a new auto or home improvements.
If you are choosing to refinancing, also remember that there are a variety of different mortgages. If you plan on residing in your home for a long period of time, you may want to consider the traditional fixed-rate 15- or 30-year loan. You may also consider choosing an adjustable rate mortgage as an option and in the future refinancing your home mortgage.
This can save you a considerable amount of money when and if market interest rates decline one percentage point or more lower than your present rate. Refinancing is the best route to take because the interest rates are lower than any of your other consolidating options. Chances are if you have home equity and good to excellent credit, then this is your best avenue to take.
- Home Improvement
The Title I loan is for individuals requiring funds for home improvement, but who have little or no equity in their property or who live in a state where equity loans are very limited. If you have some equity in your home you may want to consider home refinancing for your improvements. Title I loans bear a higher interest rate than other loan types available.
Who Qualifies?
- Borrower must have at least a one-half owner interest in the property or have a long-term lease and be an acceptable credit risk.
- A borrower's total fixed expenses cannot exceed 45 percent of gross income. This includes debt for such items as cars, houses, credit cards, and various types of other loans. It does not include such items as food and utilities.
Something potential borrowers should know:
Funds cannot be used for luxury items. They must be used for improvements that protect or improve the basic livability or utility of the property. Some examples include: structural additions/alterations, roofing, insulation, etc.
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