December 5, 2012

Which is the best time to Refinance your home

Which is the best time to refinance your home?
The best time for the owner of a property to get the home loan refinanced is, when the interest rates on the mortgages are low. Homeowners opt for refinancing, when they start to face problems in managing the mortgage payments. Another situation under which homeowners may opt for mortgage refinancing is, when they want to save money on the mortgage payments. Refinancing is the process in which you will be required to take out a new home loan, so as to get the terms and conditions of the loan changed. However, the criteria for you to obtain a refinance are same as that of taking out any other types of loans.

Determining the right time:
There are various situations under which you may be required to refinance your home loan. If you fear that you are going to default on the home loan payments, you may better opt for refinancing. As the terms and conditions of your loan get changed with refinancing, it becomes easier for you to pay down the mortgage. This again helps you to retain your home.
The main idea associated with refinancing is that it helps in lowering the interest rate and may also help by lengthening the loan term. Thus, the amount which you will be required to pay each month in installment, is suspposed to be much lower than what you were required to pay previously. Therefore, it becomes easier for you to make the home loan payments.

However still, the right time for you to refinance your home is when the mortgage market has various offers, and the interest rates are considerably low. In addition, it is also important for you to have a good credit score so you can refinance your mortgage at a lower interest rate.  For, even if the interest rate in the mortgage market is low, it may not be possible for you to get a good offer, if you have bad credit rating.

Other than the above if you think that the value of your home has risen quite a bit, you must have quite a large amount of equity in your home. So, this can be considered to be one of the best times for you to get your home refinanced: Refinancing your home is an option which can also be used for consolidating your debts or making the required home improvements.

Another option or the best time is, when you are seeing improvements in the source of your income. So, if you have been able to pay off all of the other debts, like that of the credit card debts or the student loans and any other such debts, you will see that the debt to income ratio has lowered quite a lot. If you have a low debt to income ratio, it may be possible for you to get a refinance mortgage for quite a low interest rate. Moreover, if the interest rates on the mortgages are low, you may be able to get the best of the offers.

Furthermore, if you would want to change the type of the home loan from affixed rate mortgage to an adjustable rate mortgage or vice versa, then too, you can opt for the mortgage refinance.
Author bio- Stephenie Miller is a prolific writer with specialization on various aspects of finance. Her articles on debt, mortgage industry,refinance, real estate and personal finance are valuable guidelines to the readers.

Speak with a Mortgage Specialist to discuss any questions
Contact US Mortgage Corporation toll free: 1-800-562-6715

No comments:

Post a Comment