Get Debt Free Fast With Smart Mortgage Refinancing

Get Debt Free Fast With Smart Mortgage Refinancing



Get Debt Free Fast With Smart Mortgage Refinancing
Now that you​ have purchased your dream home,​ you​ are now knee-deep in​ debt and facing heavy financial pressure .​
There is​ one useful solution used by many savvy real estate investors,​ a​ solution that involves more cash flow,​ lowered interest rate and lesser monthly payment .​
This financial tool,​ known as​ mortgage refinance,​ is​ not complicated at​ all,​ and only involves a​ bit of​ calculation and smart leveraging of​ money.
This may explain why home mortgage refinancing is​ a​ popular and lucrative deal .​
The rule of​ thumb in​ refinancing your mortgage is​ that the​ interest rate for the​ new loan should be at​ least 2 percentage points below the​ rate of​ your existing mortgage .​
In the​ present economic scenario where the​ market is​ saturated with credit institutions and multiple loan products,​ you​ are flooded with all types of​ offers such as​ the​ no cost refinance mortgage and the​ low cost mortgage refinance packages .​
As a​ result your new monthly repayment after the​ mortgage refinancing is​ considerably lower than the​ previous one.
However,​ resorting to​ mortgage refinancing becomes even more worthwhile and cost-saving if​ you​ live at​ your present home for a​ certain length of​ time .​
If you​ plan to​ move out or​ sell the​ house soon,​ then home mortgage refinance may not be a​ feasible option for you​ .​
The longer you​ stay the​ more you​ save month by month in​ the​ form of​ reduced monthly payments .​
You should only consider refinancing your home mortgage if​ you​ plan to​ own and live in​ your home for at​ least three to​ five years.
If you​ decide that mortgage refinance is​ a​ wise move,​ then consider the​ following points:
* These days mortgage refinancing companies are eager to​ waive off the​ upfront costs including the​ application,​ appraisal and other legal fees .​
But in​ return for this very low or​ almost no upfront refinancing cost,​ you​ may have to​ accept a​ slightly higher interest rate .​
But obviously this new mortgage rate is​ still considerably lower than the​ interest rate of​ your previous mortgage.
* Consider the​ points factor .​
a​ point generally amounts to​ 1% of​ the​ total loan amount .​
Also consider the​ closing cost or​ the​ total amount payable at​ the​ end of​ the​ specified years .​
Now if​ you​ do not live in​ the​ house for at​ least three to​ five years there is​ no logic in​ paying for those points and closing costs.
* you​ can gain further by adding the​ points and closing costs to​ your new mortgage .​
This may seem like having to​ shoulder extra debt,​ but it​ actually is​ not .​
By keeping the​ existing mortgage for at​ least three years,​ your balance can be cut considerably .​
As a​ result,​ although the​ closing cost of​ the​ new loan is​ added to​ your new loan,​ you​ will still end up with less debt than with the​ previous loan .​
Add to​ this the​ benefits of​ lower interest rate and lower monthly payment and you​ will soon realize why mortgage refinance has become so popular over recent years.




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