Many people look to refinancing as a method of reducing monthly payments, taking advantage of low interest rates, pulling equity out for repairs and remodels, or consolidating first and second mortgages. And while refinancing can be a wise move, it’s not always the right time to make that move. Here are some instances in which you should avoid refinancing. If You Plan To Move Soon When you refinance, you will have to pay closing costs on the new loan, which take away from the financial benefits. So, if you’re refinancing to lower your payment, consider how long you plan to stay in the house. If you’re planning to move in the near future, those closing costs may not be recouped before you move on. Do the math quickly—how much are the closing costs and how much will the refinance save you each month? Add up the monthly savings until you reach the closing cost amount, and you’ll know how many months you have to stay in the house to break even. If you expect to move before that time, the refinance won’t save you money. If Your Credit Needs Work If your credit score is not as good as it […]
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With mortgage rates on the lower side, the choice to cash in and refinance your mortgage may be tempting, but before you make that decision here are a few facts to help you decide if it is the best financial choice for you and your family. Whether it is just to reduce the amount of interest you pay, or freeing up some income for other items or debts, there are several considerations to take into account. Here are the more popular options for refinancing your mortgage. Fixed Rate Mortgages If you like the stability of a fixed rate loan because of your budget can’t handle unexpected fluctuation, then now might be a great time to choose this option. With fixed rates lower than they have been in some time, this may save you money by either reducing your monthly payments or, if you keep your payment the same, reducing the principal on your loan. Adjustable Rate Mortgages (ARMs) If you’re planning to stay in a home for only a few years, or your income can handle changing monthly payments, then you can get an ARM for significantly less than a fixed rate mortgage. Adjustable rate mortgages are also popular with […]
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Divorce is a difficult experience for everyone involved, and the details of sorting out property can be overwhelming. One of the items you will likely have to deal with is the refinancing of your home if both people were listed on the mortgage. How and when this happens will depend on the terms of your divorce. Refinancing To Remove An Owner In the event that one of the previous spouses will retain ownership of the home, it will be refinanced to a new loan that is solely in that person’s name, removing the other party’s liability for the mortgage and property. This can usually be done in a straightforward manner. The new sole owner will take out a loan and pay off the previous loan in the process. In this case the closing costs will be the responsibility of the new sole owner. Once the refinance is complete the other party will no longer be responsible legally for the mortgage or the home itself. If there is any equity in the property, and cash is taken out during the refinance, the courts will determine how this is distributed during the divorce proceedings. It may be split or belong to one […]
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