refinance loan
What is the break-even period of your home loan?
March 7, 2009 by Mortgage Align · Leave a Comment
The break-even period is the time before the savings from the lower rate completely covers the upfront refinance costs.
How Do You Find the Break-Even Period?
• Income tax: This is the tax rate on your total income.
These federal tax brackets are 10%, 15%, 25%, 28%, 33%, and 35%. If you also pay state income taxes, you should add the highest bracket you used in connection with these taxes.
Remaining Term on present Loan: The number of months till the balance is paid if the payments remain the same.
Term on New Loan: For people looking for a fixed-rate mortgage (FRM), a 15-year term is the best bet.
Whether Points and Costs Are Paid in Cash or Financed: Finance the costs if you have to. However, having to finance the costs could swing the refinance from profitable to unprofitable.
Calculate them and then you will be able to find the break even costs easily.
refinance loan
AVOID OVERPAYING WHILE REFINANCING
March 5, 2009 by Mortgage Align · Leave a Comment
If you are considering refinance as the option for you, take a check on the things that help you clinch the best for yourself. Mistakes happen and you end up paying a lot more money that you intended to.
• Shop around
You should never go with one lender. Look around, ask for comparisons only then decide on the refinance that suits you best.
• Check Your Credit
Check your credit rating yourself before going to a lender. You need to be aware of your advantages.
• Read Between The Lines
Read the loan offer document carefully before signing. There are many hidden costs and fees which you should be aware of.
• Calculate Numbers
With online mortgage calculators, it has become very easy to get a fair idea about your standing in the mortgage market. So, check it out.
Remember, each dollar saved is an investment for you.
refinance loan
AVOID THE SALES TALK WHEN YOU REFINANCE
March 5, 2009 by Mortgage Align · Leave a Comment
When you go and ask for any mortgage information the sales talk begin. They want to sell you a package which will be most beneficial to them. The real estate person wants the sale and the lender wants to sell a loan. So, they have to convince you.
They talk like salesmen to sell you the best deal, in which they get a hefty commission.
People ask questions related to their monthly repayments and not much attention to the rate of interest. The lender makes profit on the interest he can give you. Higher the interest, bigger is his commission.
You should be cautious about there talks and use your own instincts and calculations. Also take a second opinion, before finalizing.
refinance loan
THE BEST WAY TO FINANCE HOME IMPROVEMENTS
March 2, 2009 by Mortgage Align · Leave a Comment
Want to renovate and there is a cash crunch? Everything turns out to be more expensive than budgeted? But there’s hope. There is a solution to the cash flow problem at hand. Home equity loans are usually used as home renovation loans and come with lower rates, with generally comfortable repayment schedules, and some tax advantages.
• Take a refinance loan
The cash-out refinancing loan is an option when you replace your existing mortgage loan with a new, higher one. It is good option that gives you a broader view to a whole range of mortgage loans on the fixed or variable rates and also the interest-only loans.
• Second loan is the key
The second mortgage is the key to release the cash from the increasing interest rate market. These loans have a hiked equity loan rates than the first mortgage, but carry low closing cost. This makes sense for renovation and improvement projects, if there is a long term project in mind. Tax advantages and long repayment schedules that make the monthly payments easy to handle.
Your house can be the dream home you always wanted.
refinance loan
BEST TIPS ON REFINANCING YOUR MORTGAGE
March 1, 2009 by Mortgage Align · Leave a Comment
Refinancing in today’s world is the best solution to many ills. You can take different types of refinancing to have more cash in your hand, pay for a wedding or education of your child or even add a new room to the house. To go about the refinance and fixing yourself a good deal is a smart move. So, pay attention to the small details like:
• Pre-approval application
Get a preapproval application from different dealers so you are aware of your shortcomings in terms of credit score. Also it will let you know your rate of interest based on your credit history.
• No pre payment penalty clause.
Check if the current loan has a pre payment penalty clause which is about 3 to 6 months of your mortgage cost. When you refinance you might have to pay that. So, check before you get a refinance.
• Interest rate
Take into account the interest rates and closing costs offered by different lenders depending upon your credit history.
• Hard copy.
Take everything in writing from the lenders so in case of doubt later on you have some proof. Checking all loopholes will definitely be beneficial to you.
