For several years now the watchword
in lending ~ whether online or at a
bricks & mortar bank ~ has been
'refinance'. If your primary
home mortgage is at an interest rate
that's higher than what's currently
available, then you're a candidate
for this loan category.
But it's not necessarily that simple.
You may have a long-term fixed rate
loan that's only temporarily above
market rates, and may want to keep
it
There's also the cost of the new
loan to consider, as well as any
prepayment charges on the existing
loan. If it costs you $10,000
in points, fees, and loan closing
costs to lower your mortgage payment
by $100/month, then it's hardly
worth the trouble. Because
your $10,000 is worth more today
than it will be by the time you've
gotten it back at $100/month.
What's more, nowadays some lenders
unscrupulously offer exotic loan
products that sound very enticing
but are usually not wise choices to
make. Teaser rates,
no-interest loans, and others could
stick you with a far higher monthly
payment over time, so tread
carefully in refinancing waters.
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