December 07, 2001
By: Bev Dodd
Home loan mortgage refinance loan: Low rates, flexible terms
The most important point to consider in a home loan mortgage refinance loan is the length of time you plan to live in your home. You need to know how to tell a good home loan mortgage refinance loan from a bad one. We'll discuss this more below.
The most important point to consider in a home loan mortgage refinance loan is the length of time you plan to live in your home. A refinance from an 8 percent to a 7 percent loan will mean an immediate drop in your monthly house payment. But it will also mean paying closing costs - either out of pocket or rolling them into the loan amount, provided the loan-to-value ratio doesn't exceed 90 percent. Consequently, those costs should be factored into any savings calculations. To do that, simply divide the estimated closing costs by the net difference between your current principal and interest payment and the one you'd be paying with the refinance.
Think of the money saving tip when you are deciding on how much to borrow for your home loan mortgage refinance loan. If your original down payment was less than 20 percent, you may be paying private mortgage insurance (PMI). PMI provides no tax benefit and can be a significant cost of your mortgage, so do some research on the value of your property; you might find out that PMI costs can be eliminated because you now own more than 20 percent of your house.
Abusive or predatory lenders target people who are strapped for cash. But the loans they push usually have sky-high interest rates and fees. They're often illegal, too. You need to know how to tell a good home loan mortgage refinance loan from a bad one. Otherwise, you could end up paying too much, hurting your credit rating-and even losing your home. Watch out for harassing phone calls or solicitations from lenders who say they can give you next-day approval. The same goes for lenders who offer guaranteed low-interest loans-as long as you apply over the phone and pay them money today.
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