Question by nluv4ever31: refinancing your mortgage?
is this a bad thing to do? how long should you wait before refinancing? and how does it lower your payment?
Best answer:
Answer by Goldenbearloan.com
No not at all? I am not sure of your scenario but lets look at a couple of angles.
Orignally you financed 100% of the home. If the equity gained from the time your purchased to today is over the amount of the 2nd than you can refianance rate/term to cut out the 2nd and just go to one payment.
If you have cash left over and under 80% of your loan to value you can cash out and use the money on paying off debt or additions to your home. Maybe a spa, trip to europe/carribean.
Considerations:
Do you have a prepayment penalty? If you dont know than please call your lender to find out.
Lowering payment?
100% to 80% one loan yes will lower your payment also you can use some of equity to buy down your rate if you wish.
Know better? Leave your own answer in the comments!
Agree with above. No problems with refinancing. I’ve done it 3 times! I’ve done it to get a lower rate and to get rid of PMI. When you refinance they may reappraise your home for a higher value. If so, you’re new home value vs. what you’re borrowing may be better than 80% which would get rid of PMI.
Because of all the closing fees, make sure refinancing makes sense for you. How much money will you save a month vs. the fees and then determine how many months/years it will take to break even. Make sure you’re not planning on moving before then!
What i will stress to you first and foremost is that everyone is America is in different situations financially..
Wha tmight be good for you, may not make any sense for another…
Whether or not a refinance makes sense depends on what you are looking for..
What is the reason you are thinking about refinancing? Do you want to pay off debts? Do you have an adjustable rate? Do you have a high rate? Are you looking to get a lower payment?
There are many different reasons why people refinance their home.. So whether or not a refinance makes sense for you really depends on what you are trying to accomplish..
As for how does a refinance save you money…there are many ways..
If you get a lower rate of interest, it will obviously lower the monthly payment obligation.. If you pay off debt that has high interest rates, or high payment obligations for that matter, it to could save you money…
There are also specialized programs like interest only, and Option arm programs that can give you more flexibility with LOWER payment obligations..
What i would suggest to you is that you consult with a professional to discuss your situation. They will look at YOUR credit, YOUR income, YOUR finances, etc. and give you exact figures as to what YOU wualify for..
Until you do that any response here will simply be speculation, and assumptions… Without knowing what you even want to accomplish, no one can accurately gove you advice..
My name is Jason Fry, I work with Providential Bancorp, a nationwide mortgage lender.. I ahve been in the mortgage industry for 8 years, and would be happy to give you more advice..
Feel free to call me at 312-264-6448, or email me at jasonf@providential.com.. I will give you an analisys, and you can decide from there if htis makes sense for you..
Look froward to hearing from you!
Jason Fry
Senior mortgage specialist
Providential Bancorp
312-264-6448
It is not a bad thing to do if you are able to lower the interest rate while not extending the term. You should refinance only when it makes sense. It lowers your payment by lowering the interest but at the same time it could extend the term, thus costing you more over the life of the loan.