Category Archives: Finance

Kick out your hassles by studying these refinance home mortgage guidelines

$800 billion dollars is the amount that Americans have currently pending as mortgage loan outstanding. Freddie Mac Company the giants in the refinance sector have forecast that current homeowners would take more time to repay their loans even when facility programs like HARP have been implemented at a national level. The main reason why homeowners refinance is because they feel that their current mortgage home rates are high and they want to save some money.

What are the basic guidelines which you need to follow?

Refinance Home MortgageUnderstand the advantages and disadvantages of undertaking a refinance mortgage loan

When you refinance your old mortgage loan, the lending company pays off your old loan and then creates the repayment plan for the new loan undertaken. Here you would notice that the new loan rates are considerably lower than your older loan rates. Thus you would save a small amount of money every month. However Mike Dubis an expert financial planner is of the opinion that homeowners should be foresighted and look towards the long term effects of refinancing your old home loans. He advises to calculate the total interest rates that a homeowner would be paying in the new refinanced mortgaged loan. He observes the fact that homeowners end up paying more interest rates over long duration, even though they pay smaller monthly repayment amounts. Here most people end up paying refinance mortgage rates when they have retired and their earnings is low. However Margot Saunders an expert in this area is of the opinion that for middle class Americans refinancing home mortgage rates is the best option available. She observes that they save money and that is important for them.

Understand the documents that you would need

When you undertake refinance mortgage loans on your old mortgage loans, you would be surprised at the high level scrutiny that the lending company would undertake. Here you would need to provide with bank statements and under important documents which would indicate or forecast the level of financial resources which you have. Your current pay slips and income tax papers also have to be gathered and kept well. Brian Short from Tennessee-Association of Mortgage Brokers recommends people doing large amount of online banking should take printouts regarding their various online transactions. It is also essential that you know your credit score and understand your credit report properly. You would get good rates if you have good credit report and be invited to attend a free information service.

Receive multiple quotes from various vendors

When you are thinking of refinancing your old mortgage loan, you should speak to multiple vendors. This simple act would not only clear your concepts over refinancing but also help you to take the best deal available for you. Barry Zigas the director of Consume- Federation of America in Washington explains that you can start receiving the quote from your own lending company first and then move to other companies. The old lending company might not want to lose a good customer and thus cut a few cost here and there. Also according to Kathleen Day any company which contacts you in an unsolicited manner should be handled with suspicion and this could be a scam.

Interest rates for home loans: Equip yourself with the basics regarding EMI

The average rate of home ownership in America is around 64%. US states in Mid-western area have higher percentage of home ownership when compared to home ownership percentage in Western states. When you are thinking of undertaking a mortgage home loan to buy your family home, you have to pay considerable attention to Interest Rates For Home Loans. Nowadays home loans are devised to meet the needs of every home owner and sometimes are customized also. Here as a home loan owner you should be able to identify how much of EMI can you undertake on a monthly basis.

Interest Rates For Home LoansWhat do you understand by an EMI?

EMI or equated monthly installment is paid by the borrower each month. The EMI is based on the interest rate and the duration for which you have the loan. Most monthly EMI’s are deducted directly from your bank account on a specific day. The monthly EMI’s are undertaken till you have paid up tour entire home loan and the interest rate for home loan.

How do you derive the breakup of the EMI?

The amount that you have to pay for your EMI would depend on the interest rates that you are paying for your home loan and the principal interest. At the beginning of the home loan payment, the borrower would need to pay the interest rate of the loan. When the loan matures after some years and the principal amount gets paid off, then the house loan outstanding would be much lesser. Gradually the interest rate amount in the EMI becomes lesser when compared to the principal amount.  In some cases the EMI would be much lesser and these instances are:

•    When you as a borrower pay a large outstanding amount and then the Emi gets adjusted in the remaining balance. Here the borrower would receive the option of minimizing the loan period or paying a lower EMI.

•    According to the market current rates, the rates of the floating fixed rates would determine the EMI.

What are the factors which determine the EMI?

The interest rates for home loans determine the EMI that a borrower has to pay. The calculation of the EMI is based on a few important factors which are:

Principal Amount- This is the amount which is borrowed by the home owner. It determines your monthly EMI.

Interest rate- The interest rate that you pay on your total home loan would also indicate on your EMI payment.  When you have a high rate of interest on your loan you would pay a high EMI. Here when you take a new mortgage loan, you should study various vendor rates and decide the best for yourself.

Loan duration- The period for which you have taken the loan would determine your EMI. The longer loans have lower EMI.

What is the computation method?

Different methods are used to calculate the EMI. Some of them are:

•    Annual-reducing method- Here the calculation of the EMI is made at the end of the year and is calculated on principal amount and interest rate.

•    Monthly-reducing loans- Here the calculation is based on reduction of principals, when the EMI is cleared by the borrower every month.

15 Year Refinance Rates: What to understand before you say yes?

In United States the Federal-Reserve decided to invest in securities which had been mortgaged earlier. These decisions lead to fall in mortgage rates and also opened up new options for many.  One of the most common options that many homeowners selected was to refinance their existing home mortgage. What does refinancing mean? Refinancing can be defined as undertaking a new mortgage loan and replacing the old one. The same lending company or a new one can refinance your home loan mortgage. In order to prevent yourself from taking a hasty decision it is necessary for you to understand whether refinancing at a 15 year rates would be convenient for you.

15 Year Refinance RatesWhen should you refinance?

Enjoy a low interest rate

Financial experts recommend homeowners to select 15 Year Refinance Rates when the monthly mortgage rates are lower than what they had paid earlier when the home was financed. The homeowner also has the option to select a mortgage rate which is adjustable in nature. This would help the homeowner enjoy a low monthly interest rate which would create a low monthly payment plan for him. Sometimes when undertaking the refinance option homeowners might shorten the mortgage loan duration and also opt for cash out equity.  With the low monthly repayment plan, the homeowner would use the saved money on other appropriate expenditures like education fund or retirement schemes.

Create equity quickly

The financial conditions of many homeowners change over a period of time. Thus when they are promoted with a better salary or enjoy an inheritance, they are in a position to pay higher monthly repayment rates. Thus the homeowner would analyze and change from a 30 year mortgage plan to 15 year refinance rates. By doing this the money spent on financing fees is saved and equity is built quickly too.  Here it is essential that you speak to your financial planner and understand if your loan has pre-penalty clauses or not.

Select a different loan program

Selecting an adjustable mortgage rate is very common among people opting for refinancing. But here you have to understand that the rates might fluctuate and you might in the end pay a few thousand dollars more, than needed.  The best thing to do here is to select a fixed rate which is stable and this would keep your worries away too.

Manage your credit scores well

If you pay your monthly repayment installment for your mortgage loan on time, your credit score will get better. In fact many homeowners opt for home refinancing of 15 years due to this and thus reduce their payment pattern duration. Also the interest rate on the new loan is low.

Using cash-out refinancing

Sometimes homeowners undertake debt consolidation. This is done with the help of cash-out refinancing procedure where the homeowner using its good credit score can also pay the credit card dues. The process is similar to refinancing process.

15 Year Refinance Rates Chase Jumbo Interest Rates 15 year Refinance Rates Graph