When Should You Refinance Your House?

A simple guide from financial experts, you should not refinance your house unless the market rates are approximately two percent below your original mortgage lock in rate. But, there are many re-financiers take advantage of one and a half or even one and a quarter percent differences in the refinancing rate. It may be worth if the principal of your loan is high, relative to the costs of refinancing.Let consider some of the scenarios in which it’s wise to refinance your house:Scenario 1: You current mortgage loan rate is high in relative to market rates If you are currently holding a mortgage loan which has interest rate significantly higher than the rates offer in the market. And after calculating all the refinance cost and you are seeing a “Saving” in loan repayment. Then, refinancing your house would be your wise decision.Scenario 2: Refinance from adjustable rate mortgage to a fixed mortgage You currently hold on adjustable rate mortgage and you have recently discovered that your long term income prospects aren’t looking as rosy as they once were. And the mortgage interest rate has very high chances to be increased in near future. You do not want to your financial future to be affected with these unforeseen changes which may causes a spike increase in your loan repayment. Therefore, you can refinance to a fixed mortgage loan so that you can budget more effectively on your reduced income stream.Scenario 3: To shorter your mortgage loan termYour financial situation is getting better and you may want to build equity as fast as possible in your house so that you can fully own it with full loan settlement. Hence, if you refinance to a shorter mortgage loan term, you can create this equity faster.But, you should consider it carefully with you financial ability with the new loan term. If you are going to take on higher monthly payments, its savvy to work with a financial planner to see how these increased monthly costs may impact your investment portfolio and general quality of living.Scenario 4: Refinance to avoid spike payment due to balloon mortgageYou might signup a balloon mortgage loan package when you bought your house. As you know that you need to pay for large payment at the time of maturity. The time is coming close but you forecast that your financial situation may not support it when the time come; thus, you may want to refinance your house before the large payments come due and pass the debt down to your future self. By creating this time cushion, you give yourself a window to generate income and asset streams in anticipation of your upcoming refinanced mortgage payments.Scenario 5: Refinance To finance other big ticket purchases 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.SummaryThere are many mortgage tools found in the internet and you can use them to do your refinance calculation before making any decision to refinance your house. Get more information from bank officers on their refinance packages and make a summary on all the potential cost involve before make up your wise decision.

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VA Refinance Mortgage Rates

The VA refinance mortgage is also known as an interest reduction loan. It has been known to be one of the best mortgage loans that one can get today.Another name for it is the VA streamline refinance home loan. If you go through all the available refinance loans, you will find there is no other type of refinance loan that is easier to qualify for than the VA refinance mortgage loan.This is because this type of loan is backed by the government. The sad part about this loan is that it is only for those veterans who are in active duty or those that were prior in service.They should also have a previous VA loan to be able to qualify for this VA refinance mortgage loan. It gives such veterans a method to refinance their current VA loan.It has been known to be very easy to get and it does not have the common hassles involved with other methods of refinancing.You will find that if you are a veteran, you will be lucky to find that these loans have the lowest interest rates in the market.Another advantage of the VA loan is that it does not require you to have a good credit score to qualify. Most other forms of refinancing loans have the credit score requirement for anyone to qualify.This means that even when a veteran has had a bad credit report, they are eligible to get the VA refinance mortgage. Even if the veteran has had several thirty day late payments in the past twelve months they will be eligible for the refinance package.You will find that requirements for this refinancing are different from the other normal methods of refinancing.In this case, you will not be required to have income documentation, job verification and appraisals. With the current global financial crisis, you will that the interest rates for such loans are at an all time low.This is because most governments are keen to make sure that they help the economy jump start.For those who happen to have an adjustable VA mortgage, they should reconsider to having it readjusted so that they can be able to get a permanent fixed low rate.For those who already have a fixed low rate VA loan, the option of refinancing can help them save a lot of money on the current mortgage payments that they are making.

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