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Mortgage Refinancing Bad Credit Article
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The Risks of Refinancing
from:Refinancing your mortgage is a great way to achieve lower interest rates, build equity, and get some much needed cash. There are a number of benefits for those that go through with refinancing but much like a double edged sword, refinancing can cut deeply, usually into the wallet.
It is said that to make money one must take risks and while this may prove true and in many cases, these risks may also be too great and simply not worth it. So, before you refinance take all the risks into consideration and then make a decision that will not make your situation worse.
The most important thing to do is to read the fine print on your mortgage, this will pretty much tell you if you should refinance and if the risks are well worth it. Even if you have to find a high powered magnifying glass the effort is worth it. Some mortgages have penalties associated with early payment of the mortgage which can out weigh the profit you will receive from refinancing.
There are several things to consider before you go through refinancing; the amount of time you choose to spend in your home is an important consideration as this will determine if it is all worth while. If you refinance will you remain in your home long enough to break even and pay off the new closing cost? If this is the case, then you should go ahead and refinance. This can be determined by taking the profit of the new mortgage and dividing that number into the additional amount you owe. If you plan to move or sell your house before that time period expires then there really is not any reason to refinance your mortgage.
You will have to determine if you are going to refinance using a fixed mortgage or variable mortgage. A fixed mortgage keeps the interest rates at the same level while the variable can flux either up or down, at any given time. If you are going to own your home for decades then using a fixed mortgage rate to refinance will benefit you in the long run. If you plan to sell before interest rates have a chance to increase, a variable rate will be the best.
Another important factor to think about concerning the risks of refinancing is the reason you want to do it. Is the end result of such an action truly worth it? If you are planning to use the money you gain from refinancing as a way of quickly gaining cash to buy a boat, clothes, or to take a trip, you may want to rethink your plan. However, if you plan to reinvest the money or spend it on college or some other pursuit that will yield greater benefit and present little set back, then refinancing may be right for you.
Refinancing mortgages simply will not sit well with everyone's stomachs. And even if you find yourself with a seemingly perfect opportunity to lower your interest rates while keeping your monthly payments down, keep in mind everything that you are putting on the line. Weigh the risks and benefits carefully before deciding to refinance your mortgage.
Mortgage Refinancing Bad Credit News
Wonkbook: The bad news Brits - Washington Post (blog)
Wonkbook: The bad news Brits Washington Post (blog) to remove those barriers and expand refinancing opportunities." Vicki Needham in The Hill. The USDA is a ruthless debt collector when mortgages go bad. "The US Department of Agriculture's Rural Housing Service, which provides mortgage loans to rural ... |
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... - Sacramento Bee
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... Sacramento Bee With Adjustable Rate Mortgages (ARM) representing only about 7% of new loan originations in the market, many consumers are seemingly unaware that these adjustable rate loans are worth a second look. As refinance volume has increased year over year, ... |
Bankrate: Mortgage Rates Hold at Record Lows - Sacramento Bee
Bankrate: Mortgage Rates Hold at Record Lows Sacramento Bee By Bankrate, Inc. NEW YORK, May 24, 2012 -- /PRNewswire/ -- Mortgage rates were little changed, remaining at record low levels. The average rate on the benchmark 30-year fixed mortgage rate was unchanged at the record low of 3.97 percent according to ... |
Mortgage Lender Residential Finance Corp. Explains Benefits of HARP 2.0 - MarketWatch (press release)
Mortgage Lender Residential Finance Corp. Explains Benefits of HARP 2.0 MarketWatch (press release) Expanded Credit -- Borrowers with lower credit scores who are current on their mortgage payments and have been for 12 months may qualify. Unlimited Loan to Value -- Borrowers may now be able to refinance regardless of their loan to value. |
Mortgage-aid revisions paying off for lenders and some borrowers - Los Angeles Times
 Los Angeles Times | Mortgage-aid revisions paying off for lenders and some borrowers Los Angeles Times Johnny James and his wife, Yolanda Hatcher, have had more trouble than expected in trying to refinance the underwater mortgage on their Gardena condominium. (Arkasha Stevenson, Los Angeles Times / May 9, 2012) By E. Scott Reckard, Los Angeles Times A ... |