Ask the Expert: When do I Refinance My Home?
Home refinancing is a wonderful financial tool for homeowners to use for debt management to investments. If the home refinance is used correctly, wisely, and at the right time, the benefits from the refinance can improve the financial picture of the homeowner. There is no cookie cutter approach to refinancing. Each individual or family has their own unique set of circumstances. Here are some common questions homeowners often ask when they are considering refinancing.
What is the most critical question to ask myself when refinancing a home?
Is refinancing going to put you in a better position financially? Will refinancing reduce your monthly expenses, meet a critical family requirement, or improve your investment portfolio? If the answer is yes, it is probably a good time to refinance.
What is a cost benefit analysis?
This is a detailed account of the actual cost of refinancing and helps provide the best financial decision. Cost-benefit analysis analyzes the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs When you look at the actual costs of refinancing, determine how long it will take to recoup costs. Is it worth it? A qualified mortgage professional should review your alternatives and help you determine if the benefits outweigh the near and long term costs. The rule of thumb regarding the cost vs. benefit of refinancing is that you need a 1- 2% "spread" between your existing interest rate and today's current rates. Refinancing, No Cash-Out option can reduce your monthly mortgage payment or reduce the remaining term of your loan and thus probably save tens of thousands of dollars in interest over the long-run. Cash-Out withdraws cash (reduces equity) for home improvement, educational tuition, debt consolidation or for such purchases as a investment property or second home, auto, or other major purchase.
How often should I refinance?
Some people refinance frequently but a rule of thumb should be that you have held the property for one year. Refinancing allows the homeowner to use the home to conduct transactions that allow opportunities and possibly enhance the homeowner's asset pool or reduce the financial short-term burden of the homeowner. How the homeowner approaches the refinance is critical to long-term financial net worth. If the homeowner is utilizing the home as a second checking account to payoff consumer debt, financial stability for future years is reduced through ineffective money management by reducing the homeowner's equity. The ability for the consumer to build equity is in essence a long term subtle retirement plan for the homeowner.
What are some questions I can ask the mortgage company or the bank handling my refinancing?
The scope of financial knowledge a mortgage consultant or loan officer possesses matters in this transaction. This person should have a thorough knowledge of money and how it works. Begin by asking about their professional credentials. The best mortgage professionals will have formal business education, professional experience in the financial industry, and the institutional knowledge to place you in the right product. At Breakwater Mortgage in Virginia Beach, we select our mortgage consultants, loan officers, and loan originators based on strengths in these areas. Often lenders, banks, and other mortgage companies do not conduct a detailed review of potential employees that will handle your most important asset. Ask your mortgage professional why they are recommending a certain loan product to you. You should also feel free to ask personal questions such as: Do you own a home? What type of mortgage do you have? What is your credit score? The answers will reveal information about their money management. If you do not feel comfortable with your mortgage professional, research a qualified individual who will help you based on your needs. It's worth it to take the time to find the right mortgage professional.
Does location of the home matter when considering refinancing?
Wednesday, July 1, 2009
Ask the Expert: When do I Refinance My Home?
Home refinancing is a wonderful financial tool for homeowners to use for debt management to investments. If the home refinance is used correctly, wisely, and at the right time, the benefits from the refinance can improve the financial picture of the homeowner. There is no cookie cutter approach to refinancing. Each individual or family has their own unique set of circumstances. Here are some common questions homeowners often ask when they are considering refinancing.
What is the most critical question to ask myself when refinancing a home?
Is refinancing going to put you in a better position financially? Will refinancing reduce your monthly expenses, meet a critical family requirement, or improve your investment portfolio? If the answer is yes, it is probably a good time to refinance.
What is a cost benefit analysis?
This is a detailed account of the actual cost of refinancing and helps provide the best financial decision. Cost-benefit analysis analyzes the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs When you look at the actual costs of refinancing, determine how long it will take to recoup costs. Is it worth it? A qualified mortgage professional should review your alternatives and help you determine if the benefits outweigh the near and long term costs. The rule of thumb regarding the cost vs. benefit of refinancing is that you need a 1- 2% "spread" between your existing interest rate and today's current rates. Refinancing, No Cash-Out option can reduce your monthly mortgage payment or reduce the remaining term of your loan and thus probably save tens of thousands of dollars in interest over the long-run. Cash-Out withdraws cash (reduces equity) for home improvement, educational tuition, debt consolidation or for such purchases as a investment property or second home, auto, or other major purchase.
What is the most critical question to ask myself when refinancing a home?
Is refinancing going to put you in a better position financially? Will refinancing reduce your monthly expenses, meet a critical family requirement, or improve your investment portfolio? If the answer is yes, it is probably a good time to refinance.
What is a cost benefit analysis?
This is a detailed account of the actual cost of refinancing and helps provide the best financial decision. Cost-benefit analysis analyzes the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs When you look at the actual costs of refinancing, determine how long it will take to recoup costs. Is it worth it? A qualified mortgage professional should review your alternatives and help you determine if the benefits outweigh the near and long term costs. The rule of thumb regarding the cost vs. benefit of refinancing is that you need a 1- 2% "spread" between your existing interest rate and today's current rates. Refinancing, No Cash-Out option can reduce your monthly mortgage payment or reduce the remaining term of your loan and thus probably save tens of thousands of dollars in interest over the long-run. Cash-Out withdraws cash (reduces equity) for home improvement, educational tuition, debt consolidation or for such purchases as a investment property or second home, auto, or other major purchase.
Four Ways to Avoid Foreclosure
Along with the economy and the financial sectors, the housing market is in a free fall and home mortgage lenders are tightening the purse strings. In the foreseeable future and recent past, experts estimate nearly three to four million people (1) will be unable to avoid foreclosure and will lose or have lost their homes due to the current recession. These are alarming numbers, especially when coupled with the fact that this statistic is projected to pass the number of homeowners who lost their properties during the Great Depression.
But is foreclosure always necessary? Could today's homeowners, if prepared with the right kind of knowledge, avoid foreclosure? The answer is a resounding yes - in many cases, homeowners with a little foresight can work with their home mortgage lenders and often avoid foreclosure or stop it from occurring in the first place.
Work with Your Home Mortgage Lenders
Whether you're struggling or you know someone who is, there are alternate means to avoid foreclosure. Begin by speaking with your lender to see what he can do for your particular situation. In most cases, home mortgage lenders and/or lending institutions can work with you to get better rates or help you make your payments in a timely fashion.
Below are four services that home mortgage lenders and institutions routinely offer to their clients. And with a little anticipation, you can avoid foreclosure and prevent it from happening in the future by being more informed and armed with some tricks of the trade!
1. Refinance - This is one of the most common activities to avoid foreclosure in the mortgage industry in which the homeowner tries to decrease his interest rate by paying off the actual balance on the mortgage. This is possible by creating a new mortgage with a different lender for a lower interest rate, with the possibility of paying off the actual mortgage and consolidating other debt such as credit cards, auto loans, student loans, or home equity loans) in order to make just one monthly payment.
2. Loan Modification - Generally offered by home mortgage lenders or even the homeowner's financial institution, loan modification is made to either the rate or the balance of the mortgage. This happens when home mortgage lenders change the interest rate or the balance on the mortgage in order to decrease the amount of the monthly payment. This is one of the simplest processes to reduce monthly payments and avoid foreclosure because it's done by the current lender, meaning the paperwork is minimal and there are no closing costs, which is ideal in those situations.
3. Repayment Plan - This service is only offered by home mortgage lenders to homeowners who are delinquent on their monthly payments. With this process, home mortgage lenders will add a portion of the past due balance on the mortgage to the monthly payment in order to pay off that late balance in a shorter period of time without paying extra interest. This option is generally offered to borrowing homeowners who have experienced a significant loss of income (or an increase in living expenses), but still have enough monthly income to correct the delinquency and re-instate the loan. Repayment of the loan must occur within the duration of a scheduled monthly plan, which can be achieved either through gradual repayment of the delinquent amount or through both repayment and loan modification.
4. Short Sale - With this process, home mortgage lenders and homeowners agree on selling the house for less than the balance on the mortgage in order to pay off the debt and avoid foreclosure. These circumstances are usually related to the current real estate market and the borrower's financial situation. A short sale is typically executed to avoid foreclosure and prevent subsequent damage from appearing on the customer's credit score for years into the future.
But is foreclosure always necessary? Could today's homeowners, if prepared with the right kind of knowledge, avoid foreclosure? The answer is a resounding yes - in many cases, homeowners with a little foresight can work with their home mortgage lenders and often avoid foreclosure or stop it from occurring in the first place.
Work with Your Home Mortgage Lenders
Whether you're struggling or you know someone who is, there are alternate means to avoid foreclosure. Begin by speaking with your lender to see what he can do for your particular situation. In most cases, home mortgage lenders and/or lending institutions can work with you to get better rates or help you make your payments in a timely fashion.
Below are four services that home mortgage lenders and institutions routinely offer to their clients. And with a little anticipation, you can avoid foreclosure and prevent it from happening in the future by being more informed and armed with some tricks of the trade!
1. Refinance - This is one of the most common activities to avoid foreclosure in the mortgage industry in which the homeowner tries to decrease his interest rate by paying off the actual balance on the mortgage. This is possible by creating a new mortgage with a different lender for a lower interest rate, with the possibility of paying off the actual mortgage and consolidating other debt such as credit cards, auto loans, student loans, or home equity loans) in order to make just one monthly payment.
2. Loan Modification - Generally offered by home mortgage lenders or even the homeowner's financial institution, loan modification is made to either the rate or the balance of the mortgage. This happens when home mortgage lenders change the interest rate or the balance on the mortgage in order to decrease the amount of the monthly payment. This is one of the simplest processes to reduce monthly payments and avoid foreclosure because it's done by the current lender, meaning the paperwork is minimal and there are no closing costs, which is ideal in those situations.
3. Repayment Plan - This service is only offered by home mortgage lenders to homeowners who are delinquent on their monthly payments. With this process, home mortgage lenders will add a portion of the past due balance on the mortgage to the monthly payment in order to pay off that late balance in a shorter period of time without paying extra interest. This option is generally offered to borrowing homeowners who have experienced a significant loss of income (or an increase in living expenses), but still have enough monthly income to correct the delinquency and re-instate the loan. Repayment of the loan must occur within the duration of a scheduled monthly plan, which can be achieved either through gradual repayment of the delinquent amount or through both repayment and loan modification.
4. Short Sale - With this process, home mortgage lenders and homeowners agree on selling the house for less than the balance on the mortgage in order to pay off the debt and avoid foreclosure. These circumstances are usually related to the current real estate market and the borrower's financial situation. A short sale is typically executed to avoid foreclosure and prevent subsequent damage from appearing on the customer's credit score for years into the future.
Friday, June 19, 2009
Virginia Home Refinance Loans
Are you applying for refinance in Virginia? You may wish to refinance your mortgage so that you can receive the current low interest rates. Reduce monthly payments by capitalizing on reduced interest rates and shorten your mortgage term. A refinancing is an approach that involves creating a new mortgage loan. Get refinance on your mortgage by Calling us at 1-800-717-7658 or visiting us at www.virginiamortgagedepo.com
Refinance Mortgage In Virginia - How To Make Certain You Get A Good One
When it is essential that you get the best possible refinance mortgage in Virginia, enter into some initial study for yourself. This is because the Internet can really be extremely useful in terms of very insightful information when you have to secure an outstanding refinance mortgage in Virginia.
A crucial point that you should bear in mind is that the central tenants of a good deal when it comes to a mortgage will stay stable. Bearing this information in mind, you can see why it's important to be quite circumspect when looking at the short-term aspects.
Companies/businesses that administer financial products of this nature generally make a lot of money and you really should to remember where all the money is coming from. As a consumer, you are the root of their profits.
Once it has become time to attain a mortgage, one of the things that people primarily tend to focus on is the interest rate. It is important to look at the rates of interest but it is also important to look at the other factors as well. Given that your mortgage will go on for a long number of years, other variables that may be hidden in the terms and conditions will become far more important.
You need to get your information about mortgages from more than one source to make sure that you have the clearest possible picture of what is available to you.
One particular aspect that it would not be a good idea to attach too much credence to is the figures in the headlines in financial product marketing as these numbers are not inclined to show you a rounded picture. 0ne thing is for sure, that we've all seen those adverts where your headline is three times bigger than the rest of the other words in the advert. There is one fundamental point here that you should really take on board. The business responsible for the ad is definitely not going to be just giving away their profit margins without a sting in the tail and one thing you can take to the bank is that if you look closely you will be able to ascertain where they will recoup that supposed free cash and you will always be where that cash is coming from!
It's fundamentally important to bear in mind that with a simple plan and clear some clear action getting the best refinance mortgage in Virginia is not a major difficulty.
After all, you will aspire to be cost-effective with your refinance mortgage in Virginia. There are very sizable numbers here and as a by-product the tiniest transformation in a percentage point can deliver very big savings.
In my experience, there are five main points you should look at with any mortgage. For a completely free and concise check list of those points, please visit the mortgage news site here. Also if you have have any credit difficulties learn how to clean up your credit report here.
A crucial point that you should bear in mind is that the central tenants of a good deal when it comes to a mortgage will stay stable. Bearing this information in mind, you can see why it's important to be quite circumspect when looking at the short-term aspects.
Companies/businesses that administer financial products of this nature generally make a lot of money and you really should to remember where all the money is coming from. As a consumer, you are the root of their profits.
Once it has become time to attain a mortgage, one of the things that people primarily tend to focus on is the interest rate. It is important to look at the rates of interest but it is also important to look at the other factors as well. Given that your mortgage will go on for a long number of years, other variables that may be hidden in the terms and conditions will become far more important.
You need to get your information about mortgages from more than one source to make sure that you have the clearest possible picture of what is available to you.
One particular aspect that it would not be a good idea to attach too much credence to is the figures in the headlines in financial product marketing as these numbers are not inclined to show you a rounded picture. 0ne thing is for sure, that we've all seen those adverts where your headline is three times bigger than the rest of the other words in the advert. There is one fundamental point here that you should really take on board. The business responsible for the ad is definitely not going to be just giving away their profit margins without a sting in the tail and one thing you can take to the bank is that if you look closely you will be able to ascertain where they will recoup that supposed free cash and you will always be where that cash is coming from!
It's fundamentally important to bear in mind that with a simple plan and clear some clear action getting the best refinance mortgage in Virginia is not a major difficulty.
After all, you will aspire to be cost-effective with your refinance mortgage in Virginia. There are very sizable numbers here and as a by-product the tiniest transformation in a percentage point can deliver very big savings.
In my experience, there are five main points you should look at with any mortgage. For a completely free and concise check list of those points, please visit the mortgage news site here. Also if you have have any credit difficulties learn how to clean up your credit report here.
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