When and Why You Should Consider Refinancing?

There are some cases when something is giving you a better option to pay off an existing loan and replace it with a new one. This process is what we call as "refinancing" a mortgage.

There are times that refinancing your mortgage is actually better but what is very vital for you as a homeowner is to have a clear grasp of all financial objectives. More importantly, you have to keep these objectives in mind so that you will be able to acquire the loan that's most appropriate for you. This article will look at a few of the major reasons as to why people decide to refinance their mortgages. But of course, the decision on which is best based on your financial situation is up to you, as a homeowner.

Goals of Refinancing:

· To create equity faster by securing a lower interest rate - one of the top reasons of refinancing is to lower your existing loan's interest rate. Aside from saving money, reducing your interest rate also increases the rate at which you build equity in your home. Furthermore, it can also decrease the burden you bear for your monthly payment.

· To adjust the length of your mortgage - when adjusting your mortgage, you have to options:

o Increase the term: Reducing the amount that you pay each month will increase your mortgage's term. However, you also have to consider the fact that the total amount you end up paying will also increase because of the interests per month.

o Decrease the term: Mortgages in short-term basis generally have lower interest rates. Moreover, you pay off your loan sooner than usual.

· To convert from ARM to Fixed-rate mortgage or vise-versa - having an adjustable-rate mortgage or ARM will change your monthly payment as the interest rate changes. With this type of payment, your payment can increase or decrease.

On the other hand, there are some who find their selves uncomfortable with the possibility that their monthly payments could rise. In this case, it is better to switch to fixed-rate mortgage because you will have a steady rate and thus, have a peace of mind. Fixed-rate mortgage is also a great idea if you think that the interest rate will increase in the future.

Conclusion:

Refinancing can be an excellent move if it helps you create more equity faster, shortens the term of loan, or decreases your mortgage payment. It can also be a useful tool when making your debt under control as long as you use it carefully. Before refinancing, you need to look at your financial situation and ask yourself how long you plan to continue living the house and know how much money you will save by refinancing.

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A Quick Guide To Bad Credit Mortgages

Trying to buy your own home but can’t get a mortgage because of your bad credit rating? Stop applying for regular mortgages now and start looking at the bad credit mortgage market.

Traditional mortgage providers rarely offer their mortgage products to people with bad credit. Why? Because if you’ve had trouble paying your bills, credit cards or loans in the past, you’re a bad risk. Lending you tens or hundreds of thousands of pounds could be a bad idea.

The recent increase in the number of people in this situation, however, has meant that demand has risen for suitable mortgage products. The larger lenders are still wary of bad credit risks, so it has fallen to more specialist lenders to fill the gap in the market. Consequently, the bad credit mortgage market is growing, and is competitive, which means that customers suffering from poor credit can find a range of mortgage products that suit their needs and that help them get their finances back on track.

So, what is a bad credit mortgage?

A bad credit mortgage is a financial product that’s specifically designed to let you buy your own home even if you have a bad credit rating.

• Interest rates on these mortgages are typically marginally higher than for traditional mortgages. This is because the risk to the lender is higher.

• There may be some additional conditions on your mortgage, which are placed there to give security to the lender. These might include a larger arrangement fee at the start of the mortgage, or stricter redemption penalties.

• These mortgages are usually only made available through specialist mortgage advisors, who, in the UK, must be authorised by the Financial Services Authority (FSA).

• A bad credit mortgage can help you to address your financial difficulties and even to improve your credit rating over the long term.

Getting rejected by lenders for traditional mortgage products is something that gets added to your credit history. Avoid this by speaking to an independent, experienced mortgage advisor who can help you buy your house with a mortgage that’s designed for people in your circumstances.

Reverse Mortgages Provide Money for Retirement

Want to retire in 2013?
Consider a reverse mortgage...

Many Boomers are looking to retire but not sure how they can afford it. While savings and retirement plans may have gone down in the past decade there are still options that will allow you to retire in 2013. Many retirees have bought their home years ago and have been faithfully paying ever since. Whether your home is paid off in full or your balance is low, this home loan can turn your asset into a source of income. Speak with a mortgage banker to learn how HECM loans can help you achieve your finance goals.

Reverse Mortgage Information
• Age matters. The minimum age to qualify for a reverse mortgage is 62. This can be three to five years prior to you qualifying for full social security benefits. A reverse mortgage can carry you through those crucial years.

• Income. You don't need any! Traditional refinances require you to have an income source in order to make monthly payments. For example if you wanted to take out $100,000 from the equity of your home and use the funds to make payments - you would not qualify unless you had an income source. You do not need an income to qualify for a reverse mortgage, making it the ideal loan for retired seniors.

HARP 2.0 Mortgage Relief Bill Helps Underwater Homeowners

A new bill called the Responsible Homeowners Refinancing Act of 2013 has been introduced in Congress for the purpose of simplifying the process of changing mortgage providers by eliminating some of the closing costs, such as home appraisal costs under HARP 2 programs.

By way of recap, the Home Affordable Refinance Program was originally made law in early 2009 for the purpose of assisting homeowners whose homes had declined in value by enabling them to refinance mortgages that were held by Freddie Mac and Fannie Mae at lower mortgage rates. It also eliminated the requirement to purchase new private mortgage insurance (PMI) in the case of homeowners who had made a twenty percent equity payment initially and then lost their equity when housing values plummeted.

Additional relief was provided to homeowners under HARP 2.0 in 2011. The requirement that Loan-to-Value (LTV) could not exceed 125% was removed and replaced with no limits on LTV. Two cities which especially benefited from this change were Miami Florida and Las Vegas Nevada, where many homes had lost half of their value.

Equity Release, the Best Method for a Carefree Life

After retirement, many people are facing financial problems. Now, you no longer have to worry: the equity release is the alternative of a steady income on the age when you need to focus on the beautiful side of life.

Nowadays, a lot of people use equity to help fund of their retirement. You need to be at least 55 years old and own a property you can release the equity.

This is a good way to use on the money currently tied up in your house. You'll have the chance to use this money as a source of income, without giving up your property. First of all, you have to know that you have two possibilities to use it: home reversion plans and lifetime mortgages.