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September 7, 2008 |
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Should I Refinance?
Back to FAQ's
The most common reason for refinancing is to save money. Saving money through refinancing can be achieved in two ways:
- By obtaining a lower interest rate that causes one's monthly mortgage payment to be reduced.
- By reducing the term of the loan, thus saving money over the life of the loan. For example, refinancing from a 30-year loan to a 15-year loan might result in higher monthly payments, but the total of the payments made during the life of the loan can be reduced significantly.
People also refinance to convert their adjustable loan to a fixed loan. The main reason behind this type of refinance is to obtain the stability and the security of a fixed loan. Fixed loans are very popular when interest rates are low, whereas adjustable loans tend to be more popular when rates are higher. When rates are low, homeowners refinance to lock in low rates. When rates are high, homeowners prefer adjustable loans to obtain lower payments.
A third reason why homeowners refinance is to consolidate debts and replace high-interest loans with a low-rate mortgage. The loans being consolidated may include second mortgages, credit lines, student loans, credit cards, etc. In many cases, debt consolidation results in tax savings, since consumers loans are not tax deductible, while a mortgage loan is tax deductible.
The answer to the question "Should I refinance?" is a complex one, since every situation is different and no two homeowners are in the exact same situation. Even the conventional wisdom of refinancing only when you can save 2% on your mortgage is not really true. If you are refinancing to save money on your monthly payments, the following calculation is more appropriate than the rule of 2%:
This calculator below will help you determine what your monthly savings might be if you refinance now. Fill in the following information and click the Calculate button for results.
Whatever you choose to do, consulting with a seasoned mortgage professional at Teamazon can often save you time and money.
3 EASY Steps to Getting Your Loan
STEP 1. Complete our easy step by step prequalification form by telling us about yourself, about your home, and the amount that you request. GET STARTED TODAY! No Cost. No Obligation.
STEP 2. Once you have submitted your application. You will be assigned a personal loan consultant who will be your single point of contact for the entire process, all the way through closing.
STEP 3. Once your loan is approved, you will be notified by us within 24 to 48 hours.
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