Site Home

About Us

Security & Privacy

ToS

Place Your Link

Submit Article

Search:



Art & Creative

Online & Indoor Games

Fashion & Relationships

Research & Science

Automobiles

Computers & Software

News & Media

Shopping & Auction

Government & Politics

Healthcare & Treatment

Business & Services

Sports

People & Society

Recreation & Entertainment

Hygiene & Health

Teens & Children

Family & Home

Self Enhancement

Property & Agents

Education & Learning

Tour & Travel

Banking & Finance

Jobs & Employment

Drink & Food

Site Home › Banking & Finance › Mortgage & Property Loan

Home Refinancing is Done for Many Reasons

Author: essmeier

Just a few decades ago, refinancing a home loan was relatively unknown. Most people decided to buy a house, got a 30 year, fixed-rate mortgage, and made monthly payments until the loan was paid off. Times have changed, however, and in today's mortgage market, most new loans are more likely than not to be refinanced sooner or later. Today the average loan, even one issued for 30 years, is unlikely to last more than 30 years, as owners often exchange one loan for another one.

The reasons are many, and all of them are valid. Here are a few of the circumstances under which an owner might wish to refinance his or her home loan:

Get a fixed interest rate - Three or four years ago, interest rates were at or near historic lows. Rather than lock in long-term with a fixed rate, many buyers decided then to go with an adjustable rate loan, which had lower payments and allowed them to buy more house for the same amount of money. As rates have been steadily rising since then, many of those buyers now want to convert those adjustable loans to mortgages with fixed rates.

Lower interest rate - When rates drop, borrowers often want to exchange loans obtained at higher interest rates for new ones with lower rates. The lower interest rates mean lower monthly payments.

Get a longer loan term - Perhaps a buyer took out a 15 year loan and then decided the payments were higher than he or she wanted or could afford to pay. Refinancing and swapping that 15 year loan for a 30 year loan would lower the monthly payments, although it would double the length of the repayment schedule.

Borrow money - The "cash out" refinance has been quite popular during the past five years as rates have dropped and prices have risen. Many owners have discovered that they have a lot of equity in their property. With that equity, thousands of people have taken out new home loans while taking cash out of their equity to use for home remodeling, debt consolidation, or any one of a number of other things.

Refinancing often makes sense, but homeowners should realize that refinancing comes with closing costs that typically amount to several thousand dollars. Anyone considering refinancing a mortgage should take into consideration just how long they plan to remain in the home. If it is more than a few years, then a new mortgage might be financially worthwhile, particularly if doing so lowers your monthly house payment.

Author Bio:

?Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy. He also may know something about The Debt Consolidator.

You can search for this article using: mortgage calculator, mortgage rates, reverse mortgage, mortgage calculators