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Refinancing - Is this a Beneficial Route for You?
There's been much talk about refinance over the past few years, however, few people understand how refinancing works and why it can be beneficial. When mortgage interest rates plummet, homeowners flock to refinance their mortgage, and naturally so. The ...
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Using a Business Mortgage to Grow your Business
So you want to be a Player? The real movers and shakers of America are always looking to move up the ladder of success. They also have a particular penchant for desiring to display their success through their purchasing power. You may have noted that ...
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Refinancing a first and second mortgage requires some extra considerations. Depending on your equity, you may find that combining the two mortgages results in a higher interest rate. You may also find that you have to carry PMI with the refinanced mortgage.
Will Refinancing Benefit You?
Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.
Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.
However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still find that you will save money by refinancing.
Have You Done Your Research?
To see if refinancing makes sense for you, research mortgage lenders. You can quickly go online and request quotes and terms. Look at the different offers, and work out the numbers. An online mortgage calculator can help you figure out monthly payments and interest costs.
An easy way to compare cost is to first add up your interest payments for both mortgages. Use this number to compare interest payments with each potential mortgage.
You also need to factor in the cost of refinancing. Just like with your original mortgage, you will have to pay fees and points. You want to be sure that you can recoup these costs with your interest savings.
Why Do You Want To Refinance Both Mortgages?
While refinancing both mortgages is convenient, you may decide to refinance only one or both separately. With your main mortgage, you can expect to get low rates.
A second mortgage will usually qualify for higher rates, but you can lock them in. You may also choose to convert from a line of credit to an actual mortgage. Again, you will want to investigate financial packages before signing up with a lender.
About the author:
View our recommended mortgage Refi lenders. Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.
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When refinancing mortgage makes senseChicago Tribune, United States - Nov 14, 2008But you don't have to be in financial trouble to benefit from mortgage refinance, real estate experts say. "At this point, there are thousands of good ... |
Mortgage applications drop in weekRedOrbit, TX - 5 minutes ago14, the Mortgage Bankers Association said in a release Wednesday. The Refinance Index increased, however, up 2.6 percent to 1281.2, the MBA said. ... |
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