Home Equity Loan – When Does Refinancing Make Sense?Written by Charles Essmeier
For last two years, interest rates have been much lower than anytime during last thirty years. This has resulted in an unprecedented boom in real estate sales, home refinancing and home equity lending, as borrowers try to take advantage of these rates for long term. But refinancing or even borrowing against your home’s equity may not make sense for everyone. When is it a good idea to refinance your home? When is it not advisable?
Traditionally, lenders advised homeowners not to refinance unless doing so would lower interest rate on loan by 1-2%. While anyone who can save 2% on their interest rate would almost certainly benefit from doing so, others might find refinancing worthwhile even with a smaller reduction in interest rate. Increased competition among lenders has brought costs of refinancing down in recent years, so homeowners can realize a significant reduction in their home payments with reductions of ½% or so, depending on size of their mortgage.
The key to whether or not refinancing makes sense is how long homeowner intends to remain in his or her home. The costs of refinancing, which can run $1000-2000, are amortized over life of loan. For many people, a reduction of $50 or more in house payment would be more than enough to justify a new mortgage. If payments cannot be reduced by at least that much, or if homeowner plans to live in home only a short while, refinancing may not be a good option.
Refinancing may also make sense for those with Adjustable Rate Mortgages
| | Refinance Your Home Equity LoanWritten by Carrie Reeder
Refinancing your home equity loan is an excellent way to save money. By refinancing your home equity loan you can lower your interest rate and finance for a longer or shorter term. Some things to consider before refinancing your home equity loan are possible tax benefits, how long you intend to stay in your home, what your long term financial goals are, and how could you use money to benefit your family. Refinancing your home equity loan is a great way to save money each month.A home equity loan is a great way to get cash you need and lower your monthly payments at same time. If you already have a home equity loan you may be able to refinance at a lower interest rate and save money. With one short application you can get several quotes and be pre-qualified by multiple lenders. The quotes are free and there will be no credit check until you select lender that will offer you best terms. Refinancing your home equity loan could give you extra cash each month and drop your interest rate dramatically. Bad credit, past bankruptcy, and foreclosures are all considered. There are numerous options available in refinancing your home equity loan. One simple online quote request will give you several quotes from lenders who can design a loan package especially for your situation. If you are a homeowner with an existing home equity loan, consider refinancing to take advantage of many loan options offered by mortgage lenders. Your quick online quote request will give you quotes from several lenders who can refinance your home equity loan even if you have poor credit. There is no mandatory credit check so you will only have one inquiry on your credit report after you have selected lender that is right for you.
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