Every Home Owner Should Know About Re-financing...
By A Sea of Refinancing Confusion!
are probably many "lifesaving" tips people have thrown
you to help you determine the right time to refinance your home.
You may have heard that the interest rate on the new loan must be
at least two percent less than the old loan, or it is not a good
decision. Another frequently quoted, but just as frequently incorrect
statement, is that if your loan is less than two years old, you
shouldn't refinance it now.
Neither one of these statements is entirely correct, and
it can be extremely difficult to receive unbiased and accurate information
about the refinancing decision and process. It is our desire to
offer you a clear, concise guide to help you get rescued from that
sea of refinancing confusion. This report has been designed to provide
unbiased information that will help you make an educated decision
about whether or not to refinance your home mortgage.
When Shmy Home Mortgage?
very simply, the decision to refinance a home should be based on
whether you will own the property long enough to recapture the expense
connected with the new loan. The way to figure this can be as easy
as subtracting the proposed new house payment from the existing
payment to find out what the monthly savings will be. Then, divide
the monthly savings into the cost of refinancing to determine how
many months it will take to recapture that cost.
There are some situations in which a refinancing decision
should invariably be made. If you are able to negotiate a "no-cost"
mortgage (you pay no points or closing costs), and if the new mortgage
rate is lower than your existing rate, than refinancing your loan
would certainly be of financial benefit to you. If the remaining
mortgage balance, including points and closing costs, can be refinanced
at a reduced monthly payment, and still be paid off within your
existing mortgage payment term, then refinancing would be highly
advisable. If you need extra cash for a home equity or auto loan,
and the mortgage rate is lower than alternative loan rates, then
refinancing is probably the best choice. Lastly, you can generally
count on it being time to refinance when your new mortgage rate
is at least one to two points lower than your existing rate, and
you plan on staying in your home for at least three to five years.
What Refinancing Myths Do
I Need to Watch Out For?
widespread myth that needs to be dispelled, is the idea that lowered
monthly payments are the financial yardstick that wise refinancing
is measured by. Monthly payments are only comparable if they are
based on the same loan duration! In fact, lowered monthly payments
can be achieved even at a higher mortgage rate, if the new mortgage
has a longer term than the remaining years of the old mortgage.
Another common misconception about refinancing is that
if the new rate is not at least two points lower than your existing
mortgage rate, then refinancing is not worth the time and trouble.
In many cases, especially if you are planning to stay in your home
at least three to five years, even a one point reduction can make
an enormous difference in your overall home mortgage cost. In addition,
with the constant technological advances in the mortgage industry,
obtaining a mortgage loan or refinance is now faster and easier
than ever before. If you have any confusion or apprehension about
your refinancing decision, an Allegro
Lending Source mortgage consultant will happily consult
with you at no charge or obligation.
What Exactly Do I Need To
About Refinancing My Home?
To accurately sum up your refinancing decision, you need to thoroughly
consider the following factors:
1.The amount of reduction in the mortgage interest rate
2.The amount of reduction in the monthly payment
3.Any prepayment penalties on the old mortgage
4.The amount of closing costs, including any points, loan
fees, application fees, inspection fees, appraisal fees, title insurance,
mortgage insurance, etc.
5.The number of years you plan on retaining your home
6. Your immediate
cash flow needs.
What Will Actually Be Involved
When I Refinance My Home Mortgage?
you refinance, the proceeds from your new mortgage loan are used
to pay off your old mortgage. Even if you use the same lender this
is true. You are not simply re-negotiating the terms of the old
mortgage, such as reducing the interest rate.
You will receive back the old note that you signed, the
mortgage contract, and your lender will file a Mortgage Record Change.
You will sign a new note and mortgage contract which your new lender
will record. No money will pass through your hands, unless you borrow
more than your old mortgage balance. However, you must pay for points
and closing costs unless you finance those as well as the old mortgage
You need to expect that your home will have to be appraised
again, and possibly inspected. Your credit history will be reviewed
again, and there will probably be changes in your mortgage and title
Of course money doesn't just grow on trees, but if it is
truly the right time for you to refinance, then with the money you
will be saving after twelve to eighteen months, you should begin
to feel like your money trees are in full bloom!
What Should I Do If I'm Still
Not Sure I Should Refinance My Home Mortgage?
after reviewing this report you are still not sure whether or not
you should refinance your home, then it is time to call on someone
trained specifically to help you interpret your individual mortgage
Do This For You At No Cost or Obligation
The Personal Loan Consultants at Allegro
Lending Source are trained to take care of all those details
for you, and we will gladly meet with you at your convenience to
discuss your specific refinancing situation. This consultation is
absolutely free, and there will be no obligations or salespeople
hounding you if you decide that it is not the right time for you
Remember that refinancing your home mortgage does not need
to be a tedious, overwhelming task. Call us at (832)476.3498 and
let us show you just how quick and hassle-free creating increased
cash flow through your home mortgage refinance can be!