There
have been a good number of inquiries as to whether it is time to
refinance home loans. Of course, the answer definitely would depend on
the whole scenario for each borrower. You have to make sure that you get all
income/asset/credit information on hand and make sure
that the property value is acceptable to the mortgage refinance package
selected. Talk to the mortgage officer, let them check on your property
value and before you committed to the package, check the reasons and
guideline below.
Here are some of the reasons for refinancing:
*If you have an adjustable rate loan (multi tier interest rate) where the payments are due to
increase soon, it would be wise to do it now while the rates are low and you
can get a fixed rate option loan where you still pay the same amount.
*If you are interested in cashing out money to pay off credit card debts
and consolidate your other loan. Even if you have those 0% credit card offers
(trick of Balance Transfer Plan from one credit card company to other
credit card company),
remember you still owe that amount of money and it has to be repaid and
start charging interest if you never finish the payment within the plan.
Consolidate your debts into one payment and you will be surprised at the
savings, not to mention the tax benefits. Remember, credit card interest
is always non tax deductible while mortgage interest is tax deductible
and the credit card interest is normally 3 times higher.
Wouldn?t it feel great if you paid less and had more money in
your pocket to enjoy?
*Rates over 7.50% or higher fixed rate mortgage are also due for
refinancing; the current rates Base Lending Rate (BLR) as of Sept 14, 2006 is
at about 6.75%.
You should refinance to a better rate and you might even be able to
refinance the loan with no moving cost. Your rates would be based on your
current loan balance. If you have high rates but only have a few years
remaining, then I would advised not to refinance as it might not be
worth refinancing if you have no proper plan.
One key point in refinancing your current mortgage is to always get the best
package from lender. You can get as many packages as you can and
analyzed them precisely with assistance of your banker, accountant or
mortgage expert before committed.
Another note you should be aware about is that your current mortgage
package have any lock-in period? If you refinance your current mortgage
within the lock-in period, prepare to pay the lock in penalty.
