Refinance questions you should ask yourself

 Before you even consider a refinance, ask yourself this fundamental question: "Why do I need it?" "Many times, people take out a new, larger loan to pay off credit cards, automobiles or even to purchase another home," says Norm Bour, host of the nationally syndicated U.S. radio program The Real Estate & Finance Show, and an experienced mortgage lender. "Sometimes they need the money to do home improvements or renovations." If, however, you want to lower your current loan payments or switch to a different type of loan, you must calculate the benefits before going the re-fi route. "If someone is going from a fixed loan to another fixed loan, my general benchmark is to see a 1% reduction of interest rates to justify it," says Bour, who also teaches money-management classes in Southern California. "Sometimes the borrower goes from a fixed-rate loan to an adjustable to lower his payments. Sometimes he does just the opposite-maybe to get away from interest-rate volatility. These are very personal decisions, specific to each individual client."

You may already know-or suspect-that you will not live in your current home beyond a certain timeframe (perhaps 5 years). If this is the case, why would you even consider a 30-year loan? "Sometimes, an adjustable-rate loan or a 'hybrid'-say, a 5-year fixed, then converting to an adjustable-makes the most sense," Bour says. Find out more here: ">http://www.mortgage-for-all.com/50047.php"> Home Mortgages: Think Before You Borrow

Do your homework before trying to qualify for a new loan. You should know: ? The approximate market value of your property, as "loan to value (LTV) is one of the primary factors that control interest rate," Bour says. ? Your credit score, which will affect your overall ability to secure a loan, as well as the interest rates offered and the options available to you.

In certain cases, refinancing may not yield "a monetary savings, per se," Bour says. This means there must be "compelling reasons" to secure a new loan, he emphasizes. "A good loan officer will ask a series of questions to help the borrower identify his best option," Bour says. The officer should: ? Assess your current monthly cash flow and potential future risks. ? Calculate your monthly savings if you were to refinance. ? Determine how long it will take you to break even. ? Fully explain the different types of loans and interest structures. ? Disclose all closing costs and "hidden" fees (origination fees, escrow, title, underwriting, interest, taxes, insurance, prepayment penalties, etc.). ? Treat you with respect and as an individual-not come up with a one-size-fits-all, cookie-cutter approach to your financial future. Find out more from our huge collection of expert mortgage and refinance collection at: Expert Mortgage Advice

Other resources:

* Re-mortgage * Expert Web Hosting Advice * Expert Dog Training * Health advice on numerous conditions

About the author:

None

 Mike Rad

More Articles 

How to Finance or Refinance a Motorcycle Loan - Claire Calkin
How to obtain a motorcycle loan If you want to get a loan for your motorcycle or refinance a current loan, follow our simple advice to get you back on the road. Never mind public opinion, obtaining a motorcycle loan can be a straightforward and...

Why should I refinance? - Chileshe Mwape
If you bought your home a few years back when annual interest rates were 12 percent, refinancing now can save you a great deal of money over the term of the mortgage. Or you might be able to switch from a 30-year mortgage to a 15-year, so you can...

Finance and Divorce - Brad J Tamitnowson
Are Your Finances Prepared For Divorce? Life is hard and nothing is more testing and straining than going through a divorce. A divorce can indeed be a stressful time without the added pressures on ones finances. Besides emotional erosion, a...

Moneynet Takes Finance Personally - Rachel Lane
Moneynet, the personal finance specialist, is expanding its range of product guides to include financial lifestyle information to appeal to families, students and other consumer markets. Moneynet, the most established consumer research website in...

Refinancing 2nd Mortgage - Why Research Refinance Rates - Carrie Reeder
Refinancing a second mortgage can reduce your monthly payments and interest rates. To get the best deal, you need to research rates. With a minimum amount of time invested, you can have peace of mind, knowing you are getting the best...

Shopping for a Personal Loan to Suit Your Finances - Holly Bentz
Just as one would shop around for the right automobile to suit your taste and financial style, the same is true in shopping for a personal loan. If you’re thinking about taking out a personal loan, it’s important to make sure it matches your...

Six Ways Under Your Nose To Finance Your Home Business - George A Parker
There are lots of ways to get additional capital to expand a home-based business. But before you look outside for financing, leaving the decision about your company’s progress and merits to someone else, consider these six ways under your nose to...

General Personal Finance Advice - Joseph Then
Personal finance is an individual's financial status. It's about how much money you have, and how much you need. It is about managing your money - today and for tomorrow. Money is the currency on which all world economies function. Income...

Students investing in their future need to manage their finances today - Richard Green
With the A-level results coming out, the long wait for UK school leavers hoping to go to university will soon be over. All the hard work that has been put into achieving the grades required will now pay off and the fun and freedom that is student...

Refinance & Mortgage Tips: Down Payment From Stocks & Bonds - Tristan Hunt
When you start thinking about buying a home, the first thing you should be considering is your down payment and cash for fees and closing costs, and then you’ll have to show your lender how where you got the money for the down payment. The best...

Get The Right Car Finance - Joseph Kenny
These days when you step into a car showroom, there will be two major things that the dealer will be offering you. First he will be offering you cars, and secondly he will be offering you finance packages. This is how you should look at it. The...

How to Select the Best Factoring Finance Company for your Business - Marco Terry
What is factoring? Factoring is an innovative method of business financing that allows clients to get an accelerated payment on their slow paying invoices. Traditionally, when a company offers its services to another business, they...