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 Home Refinancing Is More Than Just About Interest Rates 
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Joined: Mon Sep 13, 2010 1:47 pm
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Post Home Refinancing Is More Than Just About Interest Rates
by: Alan Lim

Knowing whether now is the right time to refinance should be more than just considering current interest rates. Find out some factors which you should consider when deciding home refinancing.

If you are like the rest of us, you surely would like to take a break on your monthly mortgage. Home refinancing just seems to be one of the most, if not the most promising solution to this problem. However, you probably know how this should be done at the right time in order to achieve your desired goal of financial freedom. You need to consider whether the interest rates now and the mortgage market are showing good indicators. There are factors that you also need to consider such as your mortgage insurance and your long-term goals for paying off your mortgage. You need to know beforehand whether debt consolidation is part of your financial strategies for getting a refinance. These are just a few of the considerations you need to make before you go through any refinancing. Success can only be assured if you evaluate all the critical factors and you know how to choose the right time and manner by which you refinance.

The monthly payment you need to make on your mortgage is directly related to the interest rate provided by your lender. If your existing mortgage is based on a fixed rate, it is easy to compare the interest you are paying for with that of the current interest rates and know whether home refinancing now will make sense. All other factors held in place, if your fixed rate loan provides interest that is lower than the current rates, then there is no reason to refinance.

On the other hand, if you have an adjustable rate mortgage and you are beginning to feel the interest rates rising with your increasing monthly payment, you might be better off refinancing to a fixed rate now. However, note that while it may sometimes be a good decision to refinance based only on interest rates, these rates should never be just your sole deciding factor. What does this mean? This simply goes without saying that your individual situation is the best indicator whether refinancing today is a good decision.

You may be paying unreasonably high mortgage insurance or have built-up enough equity to drop those insurance charges with home refinancing. You may have signed a five-year adjustable rate mortgage, your introductory term may be ending soon but you still do not have the means to revert to a regular amortized loan which pays the principal along with the interest payments. Or, you may need some extra money to pay off high-interest debts, send a son to college, or needing a renovation for your leaking roof. These situations call for great opportunities to get some home refinancing.

Refinancing can be your ticket to relief from many burdens during this time. However, this is not to say that you only refinance on a per need basis. You still need to consider whether the market and the interest rates are ideal to ensure that you are making the right decision when getting some home refinancing. Sure, to refinance should be more than just about interest rates. It should also be about right timing, proper financial planning, learning your options and making the right decisions.

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Alan Lim

Refinancing can be the best financial decision you can ever make. Know more about mortgage refinancing by visiting for more information now.

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Thu Dec 18, 2008 12:38 pm
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