Welcome to Refinancing Guide
Refinance Home Loan Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Refinancing of loans has become quite common today with more and more people getting loans for purchases. Mortgage loans are still the largest loans because of the high cost of homeownership. There is almost an equal amount of consumer loans as well, however. With the cost of living increasing at a higher rate than most people's income, loans are about the only way many people can afford to buy the things they need. The unfortunate thing about loans is the interest rate the consumers are being charged. There's no way around this, however, because this is how the banks make their money. But, for the consumer, this is increasing the cost of what they're buying. For instance, an individual will purchase an automobile for $15,000 and be charged a certain interest rate. Many times after the loan is all paid for, the cost of the car is over $20,000 after the interest has been added into the loan.
from:The same scenario is true when we buy a home. With a home the initial cost is much higher and the term of the loan is much longer. Most new car loans only go for 36 to 72 months. Mortgage loans, however, run anywhere from 20 to 30 years. That's a lot more months where the consumer is paying interest. In many cases, by the time a home mortgage loan is fully paid, they've almost paid for their home twice. To avoid paying anymore than they need to, most people pay attention to refinance rates and look for opportunities to refinance their loan at a lower refinance rates in the hopes of saving some money in interest charges.
At the initial time of the loan, the interest rate the borrower is charged is determined by a couple of factors. The main factor is what the current market interest rate is at. Banks make the most of their money through the interest they collect on loans. When people put CDs in their bank, the bank has to pay the customers interest on the CDs. If they are paying their customers 5% interest on the CDs, they have to charge their customers a higher rate of interest on the loans or they wouldn't make any money. Both of these interest rates are determined by the current market rates. This is also used to determine what refinance rates can be as well.
Interest rates are also determined by how good a borrower's credit rating is. A poor credit rating will result in higher loan or refinance rates whereas a good credit rating will result in lower refinance rates. Lower refinance rates are the main reason why borrowers choose to refinance loans. Refinancing is a way to get the loan paid off quicker and cheaper by lowering monthly payments, lowering the term of the loan or just paying less interest. If you're a current borrower, you should always watch the refinance rates at your bank so you know when it's the best time to check into refinancing.
Refinance Home Loan News
Nations Lending Streamlines VA Home Loan Program and IRRRL Mortgage Refinance Application Process With Department of ...
The Department of Veterans Affairs has approved Nations Lending Corporation as a Nonsupervised Automatic Authority Lender. The financial institution is now closing VA home loans on an automatic basis, without prior approval from the Department of Veterans Affairs. Jeremy E. Sopko (C.E.O.) and William L. Osborne Jr. (C.F.O) of Nations Lending Corporation have announced that the Ohio based, VA ...
Read more...First Person: Is It Time to Refinance My Mortgage?
Your home is your biggest investment. Many people seem to think that once you purchase the house all you need to do is pay the mortgage and that's it. Of course that's possible but the shrewd financial manager keeps up on the market trends and interest rates. You never know when you can refinance and pay even less for your home than you originally thought.
Read more...My refinance loan is a HELOC. Is that bad?
Dear Dr. Don, We recently refinanced our mortgage of $87,000 to get a lower monthly payment. We just found out the loan we have is not really a mortgage but a home equity line of credit. Are we at a disadvantage with this type of loan?
Read more...Sonoma County home refinance: When and how?
There’s an old saying among homeowners: “You shouldn’t refinance your mortgage unless you can save 1 percent on the interest...
Read more...Can I refinance without much home equity?
We have a second conventional mortgage on our primary (and only) home. When we purchased it, we used an 85-15-5 loan breakdown. We have since refinanced the primary mortgage, but are paying 8.4% on the second.
Read more...