The Right Time for Mortgage Refinancing
If interest rates have dropped by a percentage point or more
since you got your first mortgage, refinancing could save you
big bucks. And if you have enough equity so that your new
mortgage is for less than 80% of your home's value, you'll be
able to stop paying Private Mortgage Insurance (PMI), which will
save you even more.
Mortgage refinancing could also result in lower monthly
payments, depending on factors such as: if any 'points' are paid
to lower the interest rate on the new mortgage; how much cash is
taken out at the time of refinancing; the duration of the new
mortgage and whether the new mortgage is a fixed-rate,
adjustable-rate or variable-rate loan.
"A vast majority of people close their loans, make their
payments and don't worry about it again," says Bob Cannon of
BancMortgage Financial Corp. "They don't refinance when they
should be looking at it."
Even if you have bad credit and have to pay somewhat higher
interest rates, mortgage refinancing will still cost less than
other forms of borrowing because the loan is secured by your
home. And if you use the money wisely, you can get out of credit
trouble and raise your FICO score. This will qualify you for
better rates in the future.
Your FICO score is computed and tracked by the three major
credit bureaus: Trans Union, Equifax and Experian. Your score is
updated quarterly and is negatively affected by such things as:
late or missed loan payments, filing for bankruptcy, having too
much debt compared to your income, and credit card balances
being too close to their limits.
Fixing Bad Credit If you are a homeowner, mortgage refinancing
can go a long way toward improving your financial situation.
Here are a few other positive steps you can take to speed up the
process:
Credit card discipline - Reduce the number of cards in your
wallet or purse to one. Take it out only when necessary and pay
it off each month.
Credit union membership - If you aren't already a member, join a
credit union. They're a good source of loans for purchases like
a car or a home.
Automatic savings - Have your bank automatically deposit a set
amount from your paycheck into your savings account or
retirement plan.
Avoid credit repair scams - There's nothing a credit repair
company can do that you can't do yourself with a little research
and effort.
Many of the homes on your block have probably been refinanced in
the last few years. Now it's your turn. For more information on
bad credit mortgage refinancing and a quote based on today's
best rates, visit www.badcred
itmortgagerefinancingnow.com.
About the author:
Mike Hamel is the author of several books and the Senior Writer
for AIM Techs, www.salesandmarketingllc.com, an Internet
marketing company that specializes in improving visitor-to-sale
conversions using proprietary software and advanced SEM
techniques.
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