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Joan Said:

When should I refinance my mortgage?

We Answered:

Now would be a good time I think because interest rates are set to rise again. Have you considered seeing an independent mortgage broker? They have access to lots of different banks and home loans. Sounds like you are probably doing the right things if you've paid off your mortgage by so much already but don't be afraid to find a better deal.

George Said:

I have a balloon payment coming due on my home mortgage, should I refinance or pay cash?

We Answered:

While there are many guidelines, it's generally your own financial situation that dictates when it's time to refinance. This can be tricky, as there are many factors surrounding refinancing that will have a bearing on whether now is the best time, or whether you should wait. Current interest rates are very low and it does seem to be a good time to take advantage of the same and refinance to a lower rate. But, before you decide, think carefully about the following factors.

Home Equity: Depending on how much money you put as down payment and the current market value of your home, calculate how much equity you have in your home. Most home owners do wait until they have some equity in their homes before refinancing. When making loan decisions, one of the most important factors potential lenders review is the loan-to-value ratio, or LTV, of the proposed loan. This ratio compares the amount of the loan you are trying to obtain to the current value of your home.

Your Credit History: Even though you have had a loan before, and are now thinking about refinancing it, you still need to have a good credit score to get the lowest possible interest rates and the best deal on your refinance. It is always better to get your credit report from the three major credit reporting bureaus before applying for your refinance to make sure that there are no errors in it, and to get an idea of what your credit score is likely to be.

Prepayment Penalty: Another problem encountered by many borrowers trying to refinance their home loans are early refinance penalties charged by their current lenders. Many loan agreements, especially "sub-prime" loans designed for borrowers with credit problems, state that borrowers must pay a penalty to their current lender if they wish to refinance their loan before the expiration of a certain period defined by the loan agreement. These penalty periods vary from loan to loan, but are frequently between two to five years from the date of the original mortgage. Before you attempt to refinance your current mortgage, you should contact your current lender to discuss whether or not your current loan agreement includes a prepayment penalty, and if so, its amount and when you can refinance without penalty. These penalties can be quite costly, and can easily make a refinance loan too expensive to save you money over your previous loan.

If your income has increased, or if you have been repairing your credit, refinancing may also be a good option for you, as you may be able to get a much lower interest rate, or renegotiate the terms of your home loan when refinancing. You should contact several potential lenders to discuss the loan terms they can offer you on a refinance loan. After speaking with several lenders, you should be able to determine whether a refinance loan is a financially viable option for you at this time.

If you want an introduction to pre-screened mortgage lenders, Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at: https://www.bills.com/mortage/refinance/…

Read a similar Ask Bill blog at http://www.bills.com/blog/good-time-to-r…

I wish you the best of luck. I hope that the information I have provided helps you Find. Learn. Save.

Best,
Bill
http://www.bills.com/

Lloyd Said:

Should I refinance my mortgage now, or should I wait in case rates go lower?

We Answered:

6.5% is not bad. I don't think you'll get a 1% improvement over that, unless you pay lots of points up front. I'd wait. More cuts are coming, and the mortgage rates lag the fed action by about half a year, if I read the charts right.

If you're pursuing an ARM, then I guess it doesn't matter when you refinance. You'll get something that is more or less fair in the general timeframe. You bets your money, and you takes your chances!

Minnie Said:

Should I refinance my mortgage or pay off revolving debt?

We Answered:

With that much credit card debt, you might not qualify for a low interest loan. You might still see yourself paying 8+% interest.
Which after paying all the closing costs might not be worth it.
Catch 22 isn't it?
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Marvin Said:

Can and should I refinance after only being in my home for 1 yr?

We Answered:

Are you sure rates are lower? You should refinance if the payback period to recover your points and lender fees is less than 2 years. Here are current rates from one lender for a conventional confirming 30-year fixed-rate loan for someone with good credit. FICO > 720, LTV < 95%, single-family, owner-occupied, NOT a condo, loan amount > $300k, and no secondary financing.

Rate Points APR
3.875 3.750 4.270
4.000 3.250 4.357
4.125 2.500 4.424
4.250 2.000 4.510
4.310 4.375 1.500
4.500 1.000 4.680
4.250 0.000 4.416
4.375 Free Closer 4.375 (no closing costs)