Refinance Advantages

Should you choose to refinance your mortgage or shouldn’t you?If you are still undecided about whether you should refinance your mortgage or not, I hope that the following five points would help you decide:1.Your monthly installments will be lower – For this point to be true, you should be able to live in your home for at least 3-5 years. If this holds true, then it will make sense to pay a slightly higher rate of interest, because as it is you will save on rent and you will actually come out the winner from the savings. Do not consider refinance if you will not live in your home for at least 2 years from the loan.2.Choose the FRM (fixed Rate Mortgage) over the ARM (Adjustable Rate Mortgage) – A refinance loan will help you shift from ARM to FRM. This will again make sense only if you choose to stay in your own home for a long period of time. The ARM initially allows for lower installments but they are likely to rise in the future (it is very rare that it falls considerably). If you plan to live in the house for a long time, it is better to use a FRM so that you will know exactly how much you have to pay each month. The longer the repayment plan is, the lower will be the cost. 3.Break away from balloon programs – Balloon programs usually ensure the convenience of low initial installments. However, you will have to repay the whole mortgage at the end of the set fixed rate term. A refinance loan will help you change lanes to a FRM or ARM to suit your long term plans better.4.Do away with the PMI (Private Mortgage Insurance) – when you choose to avail of a low-down-payment loan you will be able to buy your home with about a 20 percent (or lower) down-payment. Along with it however, you will have to avail a private mortgage insurance that covers the lender from any possible default. After a few years, when a good part of your loan has been repaid, you can refinance your loan and do away with the PMI payments.5.Your home is a great asset in more than one way – with time, the value of your house increases while your loan outstanding will decrease considerably. This will give scope to refinance a higher loan amount which will leave extra cash for your needs. You can use the refinancing loan to pay your outstanding bills, credit card bills, remodel your house, send your children to college and even take a vacation. Please note that such a loan is tax deductible, so you will gain from both ends. Go to www.findthebestrate.net for all your refinance and home loan needs.

Comments? Questions? Email Here

© HowtoAdvice.com

How to Advice .com