Refinancing Your Home

Posted by  on Apr 16, 2009

With banks reluctant to lend and with many Americans worried about keeping their homes, the rules of refinancing have changed. Instead of refinancing to pull cash out from high value properties, more of us ask our lenders for help with record low finance rates and streamlined monthly payments. Use our handy refinancing guide and our mortgage calculators to find out if you're ready to start tracking down new home loan offers.

How to Know When Mortgage Refinancing Is Right for You
In today's economy, refinancing works best under any of these conditions:

  • When you are ready to build home equity by switching from an interest-only loan to a fixed rate mortgage.
  • When you can reduce the interest rate you pay on your mortgage.
  • When you have improved a bad credit rating and can qualify for a conforming or FHA loan.
  • When you have researched a home improvement project that will significantly increase the value of your property.

How to Save the Most Money on Refinancing
Savvy financial experts understand that saving money on refinancing doesn't always mean getting the lowest monthly payment. When selecting a lender, think about how quickly you can build equity in your home. The ability to skip payments or to make principal payments optional might seem like great customer service features of a mortgage provider. However, making regular fully-amortized or accelerated payments on a fixed rate mortgage lowers the amount of interest you'll pay over the life of your loan.

How to Get the Best Refinancing Rates
When you've determined that it's time to refinance your home, follow these steps to get the very best deal on your next home loan:

  • Correct any errors on your credit report before shopping for refinancing packages.
  • Get mortgage quotes from a variety of prospective lenders.
  • Use a mortgage calculator to estimate your ideal monthly payment.
  • Maintain as much equity as possible in your property to make your mortgage less risky for prospective lenders.
  • Pay closing costs or other fees up front.
  • Look into paying an "advance premium" instead of monthly mortgage insurance.
  • Prepare yourself to walk away from a deal if it doesn't save you money in the long run.

How Mortgage Calculators Help Find the Best Refinancing Deals
Mortgage calculators take the guesswork out of shopping for a refinancing package. By plugging the right dollar amounts from your personal records into a payment calculator, you can determine exactly how much mortgage you can afford and how quickly you can start earning equity on your home. Use the mortgage calculators on our site to help determine whether you can save money by refinancing your home.


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