Question by Chad J: Will refinancing a home lower the mortgage and interest rate?
Answer by HADITDUN
IT WILL IF YOU HAVE NOT YET REFINANCED, IF IT’S YOUR FIRST TIME. AND IF IT’S AT A FIXED RATE VERSUS AN ADJUSTABLE ONE.
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IT depends on how much equity you have and how much better of a rate you can get you may not get a lower rate if you refinanced in last 3 years the rates may be higher now costing you money
not always… There are many variables in play… one.. how are the homes in the area selling?? if it is very good.. that’s a plus.. because it makes the apraised cost of your home go up.. if things are not moving so hot in the area .. your appraised cost can actually go down…
If you have equity built up in the house.. such as.. your original mortgage was taken out 10 yrs ago… when the house was worth 100,000 K.. and today you owe 90,000K.. and homes in the area are going for 120,000K… that would give you 30K in equity… which means your refinancing less with a higher *down* ….
Interest rates are back on the rise.. sooo if your not going to be saving at least 1% on the rate. it may not be worth doing a refi…
Talk to a GOOD mortgage person.. make sure they are giving you accurate info.. and shop around.. by all means shop around.. some companies are better than others.. and USUALLY the one your with.. won’t want to loose you and will do whatever they can to meet or beat a competitor…
It can and some times does. Most likely if you are having problems making the payments the refinancing will only stall the loss of your home.
Stop buying what you do not need.
get another part time job
work seven days per week
Learn to live within your means
That depends on you current rate and certain other variables. If you have a 8.5% interest rate currently and you refinance at the rate of 6.5% the yes your rate will be lower. That is one reason property owners refinance their homes.
Another reason home owners refinance is not necessarily to reduce the interest rate, but to pay off debt that they have accumulated over the few years. So they will take cash out of their home to pay off the debt with regard to the interest rate.
There would be no reason to refinance for a higher rate this would not make good business sense. It would cause you to pay an higher note thus increasing your monthly payments.
I hope this has been of some use to you, good luck.
It can. Need more info. Shoot me an email to email@example.com, and lets chat.
Each individual loan has many variables. I am a professional financial mortgage consultant. If you would like a free live phone consultation I would be glad to guide you in the right direction.
It’s almost impossible to answer this question without more information.
Generally, refinancing can lower your interest rate and payment if your mortgage interest rate is higher than the rates at the time when you refinance. It’s that simple. For example, if you are paying 7% and current rates are 6%, then you will have a lower interest rate when you refinance! And usually, a lower interest rate correlates into a lower payment.
That said, keep in mind several factors that may affect whether or not refinancing will save you money.
How much are the closing costs? How long do you plan on staying in your mortgage? Do you want an adjustable-rate mortgage or a fixed-rate? All of these can affect your refinance.
Think of it this way. If refinancing saves you $ 150 a month, but costs you $ 2000 in closing costs, you’ll need to stay in your mortgage at least 14 months just to break even (14 x 150 = 2100).
And regarding whether to pick an adjustable or fixed rate mortgage, that again would depend on current rates and how long you plan to stay in your house. If you know you want to move within 3, 5 or 7 years, you can usually get a lower rate with an adjustable mortgage.
This is a long answer to your short question, but my point is that there are so many factors to consider that there is no one easy answer.
You’ll have to talk with a trusted mortgage professional to get a truly accurate idea if refinancing will lower your rate and save you money.
I hope this information was what you were looking for.
It depends on a few things. First what is the current rate you have right now? As far as the approval on a loan, there are a few things to consider. What are your credit scores. If they are 680 and above, you qualify for todays “par” rate, which is about 61/2% If they are lower than 660 then you will see an adjustment to your rate the lower your scores, the higher your rate. Also the documentation type will need to be determined. If your income is trackable by W2’s and pay stubs and can justify all of your liabilities including your housing expense ( Full Doc ) then your rate woun’t be effected, but if you can’t prove the income, ( off the books ) or if you don’t make enough by the bank standards and you have to go Stated, then you will take another adjustment to the rate. Finally, how much of the house worth are you trying to finance? Lets say the house is worth $ 100,000 and you owe $ 40,000 on the exiting mortgage, you will be looking at financing about 50% of the value when you include and finance your closing costs. If you owe $ 80,000 you will be looking at financing about 90% of the value of the house. The higher you go for the financing against the value of the house you will see yet another upward adjustment on the rate.