| refinancing |
[Jun. 23rd, 2006|07:15 pm] |
Consolidating your debt can help you lower your monthly bills and interest rates. While refinancing and home equity loans can both help you pay off accounts, they have their own benefits. The best choice depends on your current mortgage terms and future financial goals.The Goal Of Debt ConsolidationThe goal of debt consolidation is to pay off your current debt with a new, lower rate loan. The lower your rates, the more of a savings your pocketbook will see each month. But loan fees can eat into those savings.Extending your loan term can also lower your monthly payments. But your interest costs will be higher over the life of the loan than if you choose a shorter term.For debt consolidation to be most affective, plan on paying off and closing accounts as soon as your receive your loan amount. That way you won’t be paying interest on two account or be tempted to use your credit.Refinancing Your Mortgage For Debt ConsolidationRefinancing your mortgage to cash-out your equity for debt consolidation purposes will qualify you for lower rates than a home equity loan. Having one mortgage is seen as less risky by lenders than by having two loans.But you also have to consider overall rates. If you currently have a low rate mortgage, then refinancing for a slightly higher rate doesn’t make sense.For example, if you have a $200,000 mortgage at 5% for 30 years, your interest costs $186,513.24. Say you refinance for an additional $10.000, but now your rate jumps to 6%. Your interest costs jumps to $231,677.04 – an increase over $45,000. It would have been better to go with a home equity loan.Using A Home Equity LoanA home equity loan allows you to use your equity without affecting your current mortgage rate. In some cases, it can also protect you from having to provide private mortgage insurance, an additional cost.However, home equity loans, also known as second mortgages, have higher rates than if you refinance your mortgage. This is only an issue if you have a high rate mortgage. In this case, the better choice is to combine the cash-out with a refinance.In the end, you need to compare numbers to find what is your best option. Luckily, lenders offer free online quotes to make this easy.View our recommended companies for Debt Solutions.Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
refinancing
You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home’s equity.
refinancing
Why should you consider refinancing real estate investments instead of selling them?
refinancing
A Mortgage is a long-term loan for a large amount, commonly taken for a property or a house. It is a kind of home loan except that it is termed for longer.
refinancing
Closing costs should be carefully considered before singing any loan contact. If you overlook these expenses you could overpay at closing. By shopping from a variety of mortgage lenders and brokers you can find lenders
refinancing
Oh, the joys of being a home owner. You finally get that great fixed rate 30 year mortgage at 8.5% and 2 years later...Interest rates plummet.
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