We suggests that you shouldn't enter into the refinancing process unless the market rates are approximately two percent below your original mortgage lock in rate. This difference should yield a “break even” period of about two to three years for most conventional, middle to high end mortgages.
That said, some more innovative re-financiers may want to take advantage of one and a half or even one and a quarter percent differences in the refinancing rate -- if the principal of your loan is high, relative to the costs of refinancing, it may be worth it to refinance at one of these lower rates.
Another possibility is that you want to build equity as quickly as possible in your house so that you can own it and be done with mortgage payments for good. If you refinance to a shorter mortgage loan term, you can create this equity faster.
If you are going to go this route, make sure that you have a solid asset forecast. If you are going to take on higher monthly payments, it's savvy to work with a financial planner to see how these increased monthly costs may impact your investment portfolio and general quality of living.
Alternatively, you can refinance to draw upon the earned equity in your home to finance certain big ticket purchases. Remember that the duration of time you expect to stay in your house will influence your refinancing calculations.
Finally, you might want to refinance if you're currently using an exotic mortgage instrument, such as a balloon mortgage, and you don't want to face the upcoming consequences of a spiking payment.
CHECKLIST BEFORE APPLYING FOR HOME REFINANCE
Should I refinance?
Based on how long you have had your loan, how much you paid for it, the size of your loan, how long you plan to keep your house, your credit rating, and how much money you will save by refinancing, you make your decision.
AM I GETTING THE THE BEST DEAL? (HOME REFINANCE RATES)
refinance with different interest rate. You should be wise enough to pick the right
one , offering the best or cheapest refinance rate as the ultimate motto of refinance
is to slash the rate of interest rate.
How can I lock in to the lowest interest rate?
This question is on everybody's mind. Even the loan officers'. While no one can predict rates with certainty, there is information available that can help you make a good choice. Furthermore, you need to protect yourself from losing a rate lock, because a loan officer failed to lock you in on the day you requested.
Loan fees: which are required, which are negotiable, and how much is too much?
Most home owners are surprised at the fees in a refinance. Are all those fees really necessary? Perhaps not. Some lenders charge more than others. And some mortgage brokers, even within the same office, charge more than others.
How do I compare loans?
This is a tricky issue. Companies purposely make it hard for people to compare loans, and for good reason. First, they don't want to lose you to a competitor, and second, they want to make as much money as possible.
The truth about "points."
Going beyond explaining what points are, I tell you the truth behind the facade. This is another way some companies take advantage of home owners. I have seen charming loan officers gouge their clients for more money than you would want to know about, and all the while, the client was smiling and thanking the loan officer for the loan. I think it's high time people learn the truth about points.
The No Cost Refinance--is there really such a thing?
No, of course not. Do you think a bank or mortgage company is going to loan you money for nothing? Do you think a loan officer is going to work for hours and hours on your loan for free? Still, in some situations, the so-called "No Cost Refinance" is a good loan to take.
Should you pay off your debts in a refinance loan?
Sometimes yes, and sometimes no. I give you the formula for success and for making a smart decision.
How to drop PMI.
You should quit paying the private mortgage insurance fee as soon as possible. Why? Because it does absolutely nothing for you. This insurance insures the lender, not you, and yet you pay the monthly premium for it. Your goal is to quit paying the lender's insurance premium as soon as possible. I'll give you a secret as to how to quit it even sooner than expected. I'll tell you how I helped one couple drop PMI after only one year.
How to keep from being ripped off and get the best loan ever.
Beware of these:
- Equity Strippers
- Bait-and-Switch
- Cold-calling neophytes
- Prepayment penalties
- Liars and looters
CAR REFINANCE
Re-Finance is replacing an older Loan with a new Loan offering better terms. This is applicable for Car Refinance also. Re-Financing your Car Loan has become easy with Interest Rates going down day by day. If you go through your present Car Loan contract, certain questions may arise in your mind such as:
1. Do you have to pay a high Rate of interest on a long-term Loan?
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2. Is there a clause of penalty for early payment?
You should be ready to take a new Car Loan if there is a high Interest Rate and there are no or low penalties in case you make an early payment.
You are searching the web and you have found a company which is offering Car Refinancing. The balance of your Loan can be refinanced and it is possible for you to lower down the Payments
Applications are taken over the Internet and online lenders like E-Loan and Capital One Auto Finance provide Customers the Interest Rate quotes and the monthly payment quotes. After establishing a line of credit a check or draft is issued which can be utilized at a car dealership.
Different types of customer & requirement of refinancing car
1. The Saver
This type of Customer always keeps an eye on the RBI (Credit Policy). They start shopping in an attempt to improve their own financial condition when Interest Rates are falling down.
2. The Newly Educated Remorseful
A person may have purchased a new car recently and the finance was made through the dealership. When he was made aware by a friend or neighbor that the dealer has marked the Interest Rate up by several percentage points, then he becomes remorseful and he starts to search for a new Car Loan.
3. The Budgeter
A person might have purchased a car on a Loan which is short term, for example 2 years. In spite of the Payments being high, they are affordable to him. If this Customer's financial condition changes, -say he has purchased a house and his monthly expenditure is going up. After looking at his Car Loan, he develops a desire to distribute the payment over a longer time duration. An easy way to do this is Refinancing the Car Loan.
4. The Leaser
These days many people lease out their cars. At the end of the lease period, sometimes it is seen that they have a desire to keep the car. The dealer is unable to help out to establish a Loan in some instances. A smart move in this instance can be a “buy out” where the Loan is established by the Customer and the car is actually purchased by him.
5. Others
Customers who previously had shaky credit and made car Payments for 2 years on a Loan taken for five years can qualify for a more high credit range and they can avail a re-financed Loan in which the Interest Rate is lower. This is another instance which deserves Refinancing.