Jay Conners
Now that you have been in your home for a few years and you have established some equity, you may be considering doing some home improvement with a second mortgage.
Home improvement comes in many forms. Such as a new kitchen, bathroom, roof, siding, etc.
You can acquire a home improvement loan or second mortgage through one of three ways. Refinancing with cash out, a home equity loan, or a home equity line of credit.
My suggestion to you would be, a home equity line of credit. (HECL)
The HECL is a very convenient loan for a home owner because it is not mandatory that you use the funds right away. And when you do decide to use the money, you only use the amount you need.
Lets suppose you have a home equity line of credit for $25,000.00. The lender will give this money to you as a line for you to use, only when you choose to do so. The line also comes with a check book so you can write checks at your convenience.
A refinance with cash out, or a standard home equity loan is given to you in the form of a lump sum, and you begin paying the interest and principal immediately.
On the HECL you only pay interest and principal when you use the money, and only on the amount you use.
So lets suppose you hire a contractor to put a new bathroom in your house for fifteen thousand dollars. Upon completion of the project, you would than write a check from your HECL check book, it’s that simple.
At this time, your monthly payments would begin to kick in.
Most HECL’s are amortized over twenty years, and the payment is interest only for the first ten. So make sure you are aware of the payment schedule before you close.
Home improvement is a great step to take with your home. It not only adds value to your house, but it also improves the quality of your life. And the interest is tax deductible.
As always, continue to educate yourself, and make sure you shop around for the best deal.
http://www.explainingmortgages.com
Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts
2007-11-10
2007-09-15
Home Refinancing Q & a
Terry Edwards
Are you trying to figure out if home refinancing is right for you? Here are some of the most common questions people have when it comes to refinancing a home mortgage.
Q. I have an adjustable rate mortgage. Should I refinance to a fixed rate mortgage now?
A. The answer is yes in nearly all cases unless you plan on moving in the next 1-3 years. If you currently have an ARM and you know it's going to go up (which in today's market it most likely is) then you should definitely be looking for a fixed rate mortgage.
Q. How do I know if I should refinance my loan?
A. This is different for everyone, but generally, you should ask yourself:
-How long do I plan to live in my home?
-How much lower of a rate can I get?
-Will the lower payments make up the costs involved in doing a refinance?
By knowing the answers, you can then better determine whether you should refinance your home loan or not.
Q. Is paying points for a lower APR a smart strategy?
A. In most cases the answer is no in refinancing. While it is true you can deduct the points paid on your income taxes, it is only throughout the life of the loan. So it can easily be years down the road before the monetary gains of a lower APR offset the cost of the points.
Q. How long will it take for a home refinance loan to close?
A. Depending upon whether your home will need a new appraisal, you will be looking at 3-4 weeks in most cases. If appraisers are backed up with work, then it could be longer. Unfortunately, you can be at their mercy when there is a glut of refinancing going on.
Q. What about those "no closing costs" loans?
A. As with most everything in life, there is no free lunch so to speak. Keep in mind that the no closing costs loans may actually come with a higher interest rate or even have extra fees put into the total amount of the loan. You really need to watch the fine print and do your due diligence here.
http://www.articlesbase.com/mortgage-articles/home-refinancing-q-a-214513.html
Are you trying to figure out if home refinancing is right for you? Here are some of the most common questions people have when it comes to refinancing a home mortgage.
Q. I have an adjustable rate mortgage. Should I refinance to a fixed rate mortgage now?
A. The answer is yes in nearly all cases unless you plan on moving in the next 1-3 years. If you currently have an ARM and you know it's going to go up (which in today's market it most likely is) then you should definitely be looking for a fixed rate mortgage.
Q. How do I know if I should refinance my loan?
A. This is different for everyone, but generally, you should ask yourself:
-How long do I plan to live in my home?
-How much lower of a rate can I get?
-Will the lower payments make up the costs involved in doing a refinance?
By knowing the answers, you can then better determine whether you should refinance your home loan or not.
Q. Is paying points for a lower APR a smart strategy?
A. In most cases the answer is no in refinancing. While it is true you can deduct the points paid on your income taxes, it is only throughout the life of the loan. So it can easily be years down the road before the monetary gains of a lower APR offset the cost of the points.
Q. How long will it take for a home refinance loan to close?
A. Depending upon whether your home will need a new appraisal, you will be looking at 3-4 weeks in most cases. If appraisers are backed up with work, then it could be longer. Unfortunately, you can be at their mercy when there is a glut of refinancing going on.
Q. What about those "no closing costs" loans?
A. As with most everything in life, there is no free lunch so to speak. Keep in mind that the no closing costs loans may actually come with a higher interest rate or even have extra fees put into the total amount of the loan. You really need to watch the fine print and do your due diligence here.
http://www.articlesbase.com/mortgage-articles/home-refinancing-q-a-214513.html
2007-09-13
The Time is Right for Investment Property Mortgage Refinance
Terry Edwards
If you own investment properties, then you may want to consider refinancing them and get a lower interest rate. This may lower your payments, which can mean more money in your pocket. Even though the housing market may be in a slump right now, it is still a good time to refinance while interest rates are still low. Read on to discover how to get the most from your investment property mortgage refinance.
The first thing you should do is to shop around for a good mortgage broker. They are the professionals when it comes to financing matters. A good mortgage broker can hook you up with the right lender to help you get the best loan for your circumstances.
A very important point to remember is to do your research before you do anything. Learn everything that you can about the loan refinance process and interest rates. Make sure that you check out the mortgage broker thoroughly before committing to anything. Most are honest, but as with any business, there can be a few unsavory characters out there.
If you go into this venture knowledgeable and fully prepared, the process will go a lot smoother and you have less of a chance of being taken advantage of. The goal is to get the best interest rate that you possibly can. Make sure that you are keeping current on the changing interests rates.
Another good idea is to buy down. What this means is that, if the current interest rate on your mortgage is 7%, you could pay a few thousand at closing and end up with a 6.5% interest rate. This is sometimes known as paying points. It is a good way to save thousands of dollars over the term of your loan and end up with a lower monthly payment to boot.
Never be afraid to walk away from a deal if you can't get the interest rate that you want. If you have studied the market and you know what the current rates are, then you have the ammunition that you need to negotiate a great deal.
There is nothing that says you can't use more than one mortgage broker or more than one lending service. Don't be shy about using them against each other for competition. If ABC mortgage broker says he can give you a 7% interest rate, call up XYZ mortgage broker and ask them if they can beat it. You may be surprised at the results.
The bottom line is to never go into any type of business deal blind. Research, research, and then research some more. Become familiar with the investment property mortgage refinancing business. Then, negotiate for the best interest rates. Pay down your points and come out a winner!
www.HomeRefinancingA-Z.com
If you own investment properties, then you may want to consider refinancing them and get a lower interest rate. This may lower your payments, which can mean more money in your pocket. Even though the housing market may be in a slump right now, it is still a good time to refinance while interest rates are still low. Read on to discover how to get the most from your investment property mortgage refinance.
The first thing you should do is to shop around for a good mortgage broker. They are the professionals when it comes to financing matters. A good mortgage broker can hook you up with the right lender to help you get the best loan for your circumstances.
A very important point to remember is to do your research before you do anything. Learn everything that you can about the loan refinance process and interest rates. Make sure that you check out the mortgage broker thoroughly before committing to anything. Most are honest, but as with any business, there can be a few unsavory characters out there.
If you go into this venture knowledgeable and fully prepared, the process will go a lot smoother and you have less of a chance of being taken advantage of. The goal is to get the best interest rate that you possibly can. Make sure that you are keeping current on the changing interests rates.
Another good idea is to buy down. What this means is that, if the current interest rate on your mortgage is 7%, you could pay a few thousand at closing and end up with a 6.5% interest rate. This is sometimes known as paying points. It is a good way to save thousands of dollars over the term of your loan and end up with a lower monthly payment to boot.
Never be afraid to walk away from a deal if you can't get the interest rate that you want. If you have studied the market and you know what the current rates are, then you have the ammunition that you need to negotiate a great deal.
There is nothing that says you can't use more than one mortgage broker or more than one lending service. Don't be shy about using them against each other for competition. If ABC mortgage broker says he can give you a 7% interest rate, call up XYZ mortgage broker and ask them if they can beat it. You may be surprised at the results.
The bottom line is to never go into any type of business deal blind. Research, research, and then research some more. Become familiar with the investment property mortgage refinancing business. Then, negotiate for the best interest rates. Pay down your points and come out a winner!
www.HomeRefinancingA-Z.com
2007-09-06
Refinance Loan Options And Know-how
Nazir Hussain
Today a lot of refinancing loan options are available in market. It totally depends on the financial condition of the borrower as to which refinance option to adopt that will solve all his requirements. Here we will look upon various options and requirements of the people concerned.
Fixed Rate Mortgages Refinance
1) If you have taken an adjustable rate mortgage and rates are about to rise, go for refinancing to fixed rate mortgages as they have all time low interest rates.
2) It is a fruitful refinance only if you plan to stay in your home for a long term.
Adjustable Rate Mortgages Refinance
1) Anyone who has a fixed rate mortgage and is planning to move within 7 years should go for adjustable mortgage refinance, as it does not make sense to pay a higher interest for 30 years of a fixed mortgage.
2) This in turn decrease monthly installment.
3) People who want the low rate of an ARM with the security of a fixed rate can start with ARM and switch to fixed rate afterwards.
Interest Only Refinance
1) An interest only loan gives you the option of paying just the interest, or paying interest and as much principal as you want in any given month. People who want significantly lower monthly payments use this option.
2) People go for this kind of refinance when they want to pay off debts.
3) People who want the flexibility of an Interest Only option.
4) People who want month by month flexibility
5)People who want to add principal whenever they want
Home Equity Refinance
1) A home equity loan is loan on the value of equity you have in your property . If you have various credit card debts or other high interest debts they can consolidate into a single debt and paid off via refinancing home equity loan.
2) Those who want lower monthly payments at low interest.
3)Those who want a long term stay in their home, as this refinancing is not beneficial in short term.
High Interest Refinance
1)Anyone who has a problem in showing their income and/or qualifying with other lenders because of variety of reasons such as a high interest loan taken recently or no income proof etc.
2)People with unique situations: selfemployed, entrepreneurs, divorcees, hospitality employees, sales people, retirees, etc.
Bad Credit Refinance
1) People with low credit score, less than perfect credit and want to get approved for refinance
2)People who want to pay off debt and repair their credit profile.
3)People who want to consolidate their multiple high interest bills into one low interest payment but are unable to do so because of bad credit history.
Cash out Refinance
1)In 100% Cash out refinance transaction, the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage and the associated costs, thus giving extra money. People who are in urgent need of cash go for this king of refinancing.
www.articlesbase.com/non-fiction-articles/refinance-loan-options-and-knowhow-69706.html
Today a lot of refinancing loan options are available in market. It totally depends on the financial condition of the borrower as to which refinance option to adopt that will solve all his requirements. Here we will look upon various options and requirements of the people concerned.
Fixed Rate Mortgages Refinance
1) If you have taken an adjustable rate mortgage and rates are about to rise, go for refinancing to fixed rate mortgages as they have all time low interest rates.
2) It is a fruitful refinance only if you plan to stay in your home for a long term.
Adjustable Rate Mortgages Refinance
1) Anyone who has a fixed rate mortgage and is planning to move within 7 years should go for adjustable mortgage refinance, as it does not make sense to pay a higher interest for 30 years of a fixed mortgage.
2) This in turn decrease monthly installment.
3) People who want the low rate of an ARM with the security of a fixed rate can start with ARM and switch to fixed rate afterwards.
Interest Only Refinance
1) An interest only loan gives you the option of paying just the interest, or paying interest and as much principal as you want in any given month. People who want significantly lower monthly payments use this option.
2) People go for this kind of refinance when they want to pay off debts.
3) People who want the flexibility of an Interest Only option.
4) People who want month by month flexibility
5)People who want to add principal whenever they want
Home Equity Refinance
1) A home equity loan is loan on the value of equity you have in your property . If you have various credit card debts or other high interest debts they can consolidate into a single debt and paid off via refinancing home equity loan.
2) Those who want lower monthly payments at low interest.
3)Those who want a long term stay in their home, as this refinancing is not beneficial in short term.
High Interest Refinance
1)Anyone who has a problem in showing their income and/or qualifying with other lenders because of variety of reasons such as a high interest loan taken recently or no income proof etc.
2)People with unique situations: selfemployed, entrepreneurs, divorcees, hospitality employees, sales people, retirees, etc.
Bad Credit Refinance
1) People with low credit score, less than perfect credit and want to get approved for refinance
2)People who want to pay off debt and repair their credit profile.
3)People who want to consolidate their multiple high interest bills into one low interest payment but are unable to do so because of bad credit history.
Cash out Refinance
1)In 100% Cash out refinance transaction, the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage and the associated costs, thus giving extra money. People who are in urgent need of cash go for this king of refinancing.
www.articlesbase.com/non-fiction-articles/refinance-loan-options-and-knowhow-69706.html
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