[Aop] Mark Tiernan, Refinancing Your Mortgage Can Open Up A Lot Of Options For You And Your Family

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Mon Jan 7 04:34:03 EST 2008

Mark Tiernan, Refinancing Your Mortgage Can Open Up A Lot Of Options For You
And Your Family

It can happen to anyone, the roof is leaking, the credit card bills are
pilling up and it is almost time for a new car. But where are you going to
get the money to do all of these things? The need for extra cash can be very
frustrating and worrisome, however if you are a home owner you have a
variety of financial options available to you that you may not even be aware
of. You should look into refinancing as a viable option to solve your
financial worries.

Refinancing your mortgage can give you a lot of options as far as the
freedom of a little bit extra cash. There are a few different ways that you
can go about refinancing and the best way for you depends on what you are
hoping to accomplish and what your own personal situation is.

*What Is My Current Situation?*

The first thing that you need to look at is what your current situation is.
You need to do a little background research into your own situation. Many
home owners do not know what they are paying for an interest rate or in some
cases, home owners do not know the term of their mortgage or any of the

It is important to know what your interest rate is currently, because if you
are going to refinance you may be trading your already low interest rate for
a higher one, which is not likely to be in your favor. It is a good idea to
know what your situation is presently before you try to refinance.

*Why Should I Refinance?*

There are a few reasons for refinancing a mortgage:

* To lower monthly payments
* To shorten the length of the mortgage
* To take advantage of low interest rates
* To finance a home project or renovation
* To consolidate bills
* Reduce Risk

*How Will A Lower Interest Rate Affect Me?*

One of the most common reasons that people go through the refinancing
process is to take advantage of low interest rates in the marketplace. The
interest rate that you pay on your mortgage makes an incredible difference
to your monthly payments. If you have an interest rate on your mortgage that
is quite a few points higher than the current market interest rate, you are
likely to be paying much larger monthly payments than you need to be.

*For Example:*
House cost $200,000
Down Payment 40%
30 year repayment
Interest rate 5%
Monthly payments - $859

*But, if your interest rate is only 3%*
House cost $200,000
Down Payment 40%
30 year repayment
Interest rate 3%
Monthly payments - $675

As you can see, only 2% makes a huge difference in your monthly payments. An
excellent reason to refinance your mortgage would be to take advantage of a
lower interest rate and lower your monthly payments.

*I Could Use Some Extra Cash!*

Does your house need a new roof? Maybe it is finally time to develop the
basement or to finally put on that much needed addition. Almost all
homeowners at one time or another could use some extra cash. You can
refinance your home mortgage to get your self some extra money to do the
things that you need to do around your house.

Often it makes financial sense to refinance your mortgage to include the
cost of the new roof or whatever it is that you need extra money for. If you
can refinance at a low interest rate, then you can add the amount that you
need to borrow into your mortgage and perhaps make slightly higher payments
or extend the length of your mortgage term to offset the difference.

*What About My Credit Card Bills?*

Maybe you do not need the extra money for home improvements but you have
some major credit card bills. If you have credit card bills piling up than
refinancing your mortgage is an option that could save you hundreds or
thousands of dollars in payments every month. You can refinance your
mortgage to include your credit card bills. People usually do this because
the interest rate that you pay on your mortgage is generally lower than the
interest rate of most credit cards. Before you decide to rework your
mortgage to work in your credit card bills, you will want to look at how it
will affect the overall picture. Will this extend your payout period a few
years? What will your monthly payments be? These are a few questions that
you will want to ask yourself and your banker before making the change.

*What If I Want To Pay Off My Mortgage Faster?*

Many people may find themselves in a situation where their circumstances
have changed since purchasing their home. Maybe you are making more money
now than you were when you bought your home and now you would like to payoff
your mortgage faster. You can refinance your mortgage to make it a shorter
payout period if you are in this situation. However, you may want to just
consider increasing your payments voluntarily or make balloon payments on
your mortgage instead of refinancing. This is advisable as a security net
just in case you lose your job or the situation changes you will not find
yourself in a bind. However, some people need to have it official in order
to make the payments.

There are many different reasons for refinancing your mortgage, and everyone
will have their own personal factors that help them make their decision. The
important thing to remember is to know all of the facts before making your
decision and make the best choice for you and your family.
(c) 2005 http://www.home-loans-101.com

*About the Author*
Kevin Brown is successful author and publisher of many informative websites
including http://www.home-loans-101.com . His websites offer tips and advice
on a wide array of topics including home loans<http://www.home-loans-101.com/>,
mortgage refinancing, home equity loans and more.
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