subject: Is it a good time to refiance your home and the criteria to consider [print this page] Is it a good time to refiance your home and the criteria to consider
Mortgage home refinance is an idea that you should be considering with interest rates at decade lows.. There is no magic ball that will tell you were interest rates will be in six months or a year. However, the length of time which interest rates have been this low is a historical aberration. Chances are on the side that interest rates will gradually rise in the future, but when no one is certain despite the continued weakness in the housing market. So now may be a good time to start considering refinancing one home specially if you have any variation of adjustable type debt that is set to reset sometime in the near future.
Some points that you should consider when thinking about mortgage home refinance are as follows.
Current Mortgage rates The rate of interest between the current loan you have and the new loan should be at least 1%. This interest differential is were mortgage home refinance starts become sound, more than 2% differential, then its a no brainer.
Type of Loan If you have and adjustable rate mortgage which is due to reset its a great time to consider refinancing given the low interest rate environment..
Equity The mount of equity is important because having 20% or greater equity will allow you to removal of Private Mortgage Insurance (PMI). The savings could be anywhere from $70 to $150 a month for not having to carry this insurance.
Credit Score If your debt to income ratio is reaching the maximum. Your credit score can increase if you do a mortgage home refinance and your resulting payment that is lower. This results from lowering the debt to income ratio.
The length of time you have owned your current home. If you currently have a large expense to pay, such as college tuition or medical bills, taking money out from a mortgage home refinance is an option. This is a sound idea because other ways of borrowing have higher interest rates and as a result cost.
Debt consolidation is another tool that can result from mortgage home refinance where equity is pulled out to pay higher interest rate debt such as credit cards and result in additional monthly cost savings.
The cost involved in refinancing must be included when making a decision if mortgage home refinance is for you. Take the time or get professional advice to consider if refinancing makes sense in your case and carefully evaluate cost savings.There are many variations in which can be carried out and it could potentially save you significant amount of money over the duration of the life of the loan.
