Why Refinance Back into a 30-Year Loan?
One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at "no cost" to the borrower.
In the no-points no-fees scenario, the mortgage consultant uses rebate monies paid by the lender to pay off non-recurring closing costs for the borrower. These are "one time" fees such as escrow or attorney fees, title insurance, document preparation, tax service, flood certification, processing and underwriting fees, etc. The borrower is still responsible for recurring fees such as interim insurance, property taxes or insurance policy payments.
Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments on time, etc.) are often candidates for better interest rates as well. If you haven't checked your credit score in a while, it's a good time to call a mortgage consultant.
The question most asked is, "But why should I go back into a 30-year loan?" There are two schools of thought on this subject, and the mortgage consultant should work hand-in-hand with the borrower's financial planner to determine what works best for their mutual client. One option is to take the route of the "same payment" refinance, and actually pay off the loan faster and save money on interest fees in the long-run. If refinancing results in a lower monthly payment, the borrower can still continue making the same payment they made in the original loan, and the extra money will be applied to the principal balance.
For example: Let's say you have 25 years remaining in your current loan, and you refinance back to a 30-year loan with a slightly lower interest rate, resulting in a payment reduction of $200 per month. (Note: This is just an example. The actual amount could vary.) You could then take that extra $200 per month and apply it toward the principal on the new loan. At this rate, the loan will be paid off in 22 years and 4 months, which is 2 years and 8 months less than the original loan.
On the other hand, if the borrower's financial planner is a proponent of best-selling author and investment guru Douglas Andrew's philosophies (see Missed Fortune), he or she may suggest investing the extra money in a side-fund that could earn a better rate of return and grow to the amount of the mortgage (and beyond) in even less time. This method provides excellent liquidity, but having more direct access to this money may be too tempting for some homeowners.
Regardless of the reason for the refinance, the mortgage consultant will need to know what the existing loan scenario entails, review the homeowner's long-term goals, and provide a comprehensive spreadsheet that compares and contrasts the various loan programs available. Bear in mind, refinancing to obtain a lower interest payment could also result in a lower deduction at tax time. The homeowner's mortgage consultant and financial planner should work hand-in-hand with their mutual client's best interest in mind.
Jansen Drake is affiliated with 1st Metropolitan Mortgage, a Georgia Residential Mortgage Licensee 15506. For free consultation and a copy of The Certified Guide to Credit Scoring, call Jansen at 678-388-1755 or go to http://www.catquickloans.com
 Google News Updated : Mon, 06 Oct 2008 14:48:34 GMT PGA -- 2008 Turning Point Championship Recap - Pro Fantasy Sports
Pro Fantasy Sports - Hello in the second of the “Fall Finish” series, a unknown rookie birdied the 72 nd hole to earn a hefty paycheck and a spot on the PGA tour for the next two years. Johnson earns first win at Turning Stone Rookie posts first victory Publ.Date : Mon, 06 Oct 2008 14:07:14 GMT Obama accuses McCain of looking for distractions - CNN
CNN - (CNN) -- Sen. Barack Obama on Sunday charged that Sen. John McCain's campaign is launching "Swift boat-style attacks" on him instead of addressing the country's problems. Health Care: Coverage -- But at What Price? Health Care Destruction Publ.Date : Sun, 05 Oct 2008 19:30:50 GMT Postseason ace Beckett shelled as Angels win 5-4 - The Associated Press
The Associated Press - BOSTON (AP) - Josh Beckett waited four extra days for a chance to show his postseason brilliance. That shine wore off with his very first pitch. Video: Angels, White Sox Each Force a Game 4 Red Sox's injuries could prove costly vs. Angels Publ.Date : Mon, 06 Oct 2008 14:11:21 GMT Mammals facing extinction threat - BBC News
BBC News - By Richard Black At least 25% of the world's mammal species are at risk of extinction, according to the first assessment of their status for a decade. Many, many mammals face extinction One Quarter of World's Mammals Face Extinction Publ.Date : Mon, 06 Oct 2008 12:37:47 GMT Angelina Jolie Debuts New Movie and New Ink - Actress Archives
Actress Archives - Angelina Jolie and Brad Pitt recently attended the movie premiere for Jolie’s new film “The Changeling” directed by Clint Eastwood, and the film wasn’t the only thing on display. Video: Angelina Jolie and Brad Pitt at Premiere Angelina Jolie’s New Tattoo Publ.Date : Mon, 06 Oct 2008 14:09:31 GMT Ask.com Sails into Semantic Search to Differentiate from Google - eWeek
eWeek - By Clint Boulton Ask.com's search engine market share is minimal at best, but the company keeps on plugging away in application development to keep from being extinguished by Google, Yahoo and Microsoft. Ask.com Amps Up Search Again Ask.com, now with more answers Publ.Date : Mon, 06 Oct 2008 13:04:07 GMT For Some Animals, There's No Place at Home - U.S. News & World Report
U.S. News & World Report - By Amanda Gardner MONDAY, Oct. 6 (HealthDay News) -- Exposing your children to the joys of pet ownership may, in some cases, also mean exposing them to infections and injuries. Keep Kids From Exotic Animals, Docs Say Doctors: No hamsters or exotic pets for young kids Publ.Date : Mon, 06 Oct 2008 13:06:44 GMT Make Money Online |
PARLOT::Ebooks, Scripts,
Websites, and more... Mortgage advice overwhelming you? Many people get advice from everyone... Read More If you want a low interest, low payment mortgage refinance,... Read More A new survey reveals that in the last five years,... Read More One of the most common terms found in a new... Read More When financing a home purchase, the kind of mortgage you... Read More By refinancing your property online you can take advantage of... Read More Have you ever asked yourself how much home loan can... Read More "The ache for home lives in all of us, the... Read More Looking for home mortgage loans can get confusing with the... Read More The financial stories remain similar over the months and the... Read More Searching for a mortgage can sometimes be a hassle. Where... Read More While trying to find the lowest rates, many homeowners fail... Read More The recent boom in house price values have made some... Read More If you are a homeowner, you've probably received offers to... Read More If you have considered applying for a home loan mortgage... Read More There are at least two types of home equity loans.The... Read More One of the biggest reasons homeowners refinance their mortgage is... Read More Mortgages are easy as long as you understand them well.... Read More Sometimes so much is talked about how to solve the... Read More Real estate prices have been increasing steadily over the last... Read More Have you been turned down for a home loan recently... Read More It is likely to be one of the largest purchases... Read More Dealing with mortgage companies online can enable you to get... Read More If you have a poor or bad credit history with... Read More Buying a home with bad credit is possible with the... Read More
Adsense
websites
Helpful Mortgage Advice
Refinance Online
Home Equity Increases $1 Trillion in Five Years ? Is the Market Peaking?
Mortgage Prepayment Penalties - Just Say No
Types of Financing for Your Mortgage
Refinance Your Property Online
How Much Home Loan Can I Afford?
Secured Homeowner Loans to Reiterate that a Home Provides More than a Roof Over Your Head
Mortgage Soup
Debt Counseling ? Healing Touch for the Ailing Finances
Mortgage Clarksville - Find the Best Deal
Know Your Mortgage Options
Secured Lending - a Guide to Releasing the Value in Your Home
10 Things to Look for in a Home-Equity Line of Credit
Applying for a Home Mortgage Loan Online - The Pros and Cons
Types of Home Equity Loans
Why Refinance Back into a 30-Year Loan?
Mortgage Advice To Make Mortgages A Really Smooth Ride
Good FICO Credit Score? Tips to Getting the Most Out of Your Home Mortgage Loan With Good Credit
Are You Ready for a 40-year Mortgage?
Credit Problems? With a Subprime Mortgage Lender, Poor Credit is Not a Problem
Follow A Few Simple Steps To Make Shopping For Your New Home Loan A Little Easier
Bad Credit Home Loans - Dealing With Bad Credit Mortgage Companies Online
Bad Credit Home Loan - Apply Online and Keep Your Credit Score as High as Possible
Buying a Home With Bad Credit - Why a Recent Bankruptcy Will Not Stop You From Getting Approved
Affordable and Reliable Web Hosting Starting at $4.49/Month
Hard Money Loans - Reasons Why You Might Want To Try Applying With A Subprime Mortgage Lender
Before you apply for a hard money loan, try applying... Read More
Types of Mortgage Interest Rate
Here is a useful guide to the different types of... Read More
Home Loan Refinancing - What Lenders Dont Want You To Know
Refinancing lenders seems to hold all the cards. They have... Read More
Need Mortgage? Alternative Finance Often Masks Predators, Who Want to Steal Your House
So, your bank had just turned you down for a... Read More
This Secret Weapon Will Eanble You To Close Up To 200% more Home Remodel Sales
Many Homeowners are not aware of all the options that... Read More
Remortgage ? When Monthly Mortgage Payments are Touching New Heights
Current economic scene has hinted towards a fall in the... Read More
What is a Repayment Mortgage?
A repayment mortgage is the type of mortgage that most... Read More
Home Loan Lenders - Finding the Best Home Mortgage Lender
The process of obtaining a mortgage or home loan can... Read More
First Time Home Buyer Loans Made Easy
When it comes to firsttime home buyer loans, a little... Read More
Things that You Need to Know before Financing Your Home
Frequent Asking Questions:What are Points? A. There are several types... Read More
To Refinance or not to Refinance -- Here is the Answer
I have written many articles on refinancing a fixed rate... Read More
Thought You Can Go All Alone In Mortgages! Mortgage Advice Beneficial In All Important Decisions
Mortgages are easy as long as you understand them well.... Read More
Ten Things a Mortgage Processor Must Know to be Effective
From time to time, we hear a story about a... Read More
Subprime Mortgage Lenders - Helpful Tips When Getting a Subprime Mortgage Loan
If you have bad credit history, no down payment or... Read More
A Personal Mortgage Experience
I don't know what the mortgage situation is around the... Read More
Why Choose a Home Equity Loan?
There are many reasons for choosing a home equity loan.... Read More
For Mortgage-Refinance Help, Get the Best Mortgage Professional, Not a Bank Loan Officer
When you need a mortgage -- either because you are... Read More
Commercially Viable Commercial Mortgages
Commercial mortgages are similar to residential mortgages. Usually taken by... Read More
A Mortgage Loan For Homes
Everybody wants to own a house because it is something... Read More
Mortgage Information for the First Time Homebuyer
Inflation in the United States is increasing rapidly and home... Read More
How to Avoid Paying Mortgage Insurance
In today's world, a borrower should not be paying mortgage... Read More
Mortgage Debt Elimination in 5 to 7 years!
Mortgage Debt Elimination shows that most home loan debts will... Read More
Home Mortgage Loan Pre-Approval Online ? Keys When Applying For A Mortgage Online
Applying online for a mortgage is very fast and easy.... Read More
I Have A Slice of the American Dream and It is a 30 Year Nightmare
Well, we did it. We are buying a beautiful, brand... Read More
Mortgage Basics for First Time Home Buyers
Anyone planning to take out a mortgage for the first... Read More
Mortgage Refinance |