| Your determination to refinance your mortgage should | | | | your home based on current value, not what you paid |
| not only be based on careful consideration, but as well | | | | for it, your chance of getting good rate of interest |
| should avoid the urge to get the equity out for | | | | irrespective of how good your credit report is, is quite |
| reinvestment in other properties, pay off outstanding | | | | slim. |
| debts, or to satisfy your appetites for consumer | | | | Without doubt, you can still get a remortgage loan with |
| goods. | | | | about 10-15% equity in your home, but definitely you will |
| As important as home refinancing is, you need to really | | | | end paying a higher interest rate. |
| reflect and ask yourself some important question. | | | | How Long Do I Intend To Stay In My Current Home? |
| Because remortgaging is not about getting out of debt | | | | Another determining factor is the length of time you |
| but in actual fact prolonging your debt. | | | | have to stay in your current home taking into account |
| I have below some critical question you need to ask | | | | the old prudent financial saying that says, you should |
| yourself while thinking "should I refinance my | | | | only take mortgage refinancing loan if the cumulative |
| mortgage?" | | | | monthly savings is better than your closing cost which |
| What's My Credit Rating? | | | | is about 2-3% of the worth of your mortgage on |
| As you might have known by now, in today modern | | | | average. |
| world of consumer quest for credit in about almost | | | | Therefore, you need to take out your calculator and |
| anything, your credit rating will decide the rate of | | | | crunch the numbers. From personal experience, the |
| interest the lender will charge you. On the plus side, if | | | | break even point is between 2 to 3 years on average, |
| your credit score is above 720 or more, you will | | | | and if you intend to stay in your home for that length |
| probably get a low interest rate. But if your score is | | | | of time, it would make financial sense to refinance your |
| lower, you might still get approved, but you will probably | | | | home. Having said that, make sure the savings is |
| pay a higher rate of interest. If your credit report is | | | | worth the effort you put in. |
| really bad on the other hand, you will need to quickly | | | | What If I Have ARM Mortgage (Adjustable Rate)? |
| start the process to improve your credit score but | | | | Lastly, if you have adjustable rate mortgages (ARMs), |
| unfortunately, it take time. | | | | it might make sense to opt for fixed-rate mortgage to |
| How Much Equity Do I Have In My Home? | | | | lock in low interest rates to forestall the risk of rate of |
| Due to the recent shake up in the banking sector, | | | | interest been jacked up in the future. So, if you fall in |
| unfortunately the day of getting low or | | | | this category of home owners, the risk of paying |
| no-money-down mortgages is long gone. As things | | | | higher interest rate in the future far outweighs the |
| stand now, if you don't have at least 20% equity in | | | | costs of refinancing in the short-term. |