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Mortgage Rates Refinance Article
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Refinancing
Most of us find ourselves taking out a loan at one time or another in our lives, whether it's for a home, a car or personal reasons.
At the time we take out the loan, it's usually set for some many months with monthly payments due on a certain day. The amount of the monthly payments is based on the current interest rate we're charged on the principal balance we borrow.
Often, during the term of the loan, we find ourselves refinancing the loan for one reason or another. The main reason why people do refinancing is usually for a better interest rate, specifically if the loan is a home mortgage.
With a home mortgage loan, refinancing for a lower interest rate can make a substantial difference in the total balance of our loan.
Lower interest rates are the most common reason for refinancing mortgage loans, but they are not the only reason for refinancing. When banks lend money for the purchase of a home, they will usually only borrow up to 80% of the value of the home (known as equity).
For instance, if a home is valued at $100,000, the maximum amount the bank will borrow is $80,000. As time passes, the balance of the loan decreases while the equity of the home increases. Often home owners need extra cash for remodeling or other personal reasons so they choose refinancing by using the equity of their home as collateral.
An example of this method of refinancing would be that same $100,000 home. After a couple of years, the loan balance may be down to $70,000 while the value of the home may have increased to $120,000.
In this scenario, the bank will borrow up to 80% of the home's value, which would be $96,000. This amount is $26,000 more than the borrower owes on his mortgage so they are eligible for $26,000 cash out. Refinancing of home mortgage loans is very popular for this reason.
While home mortgage loans are the loans that are most often refinanced, refinancing is not limited to just mortgages. Many borrowers take out loans when they purchase a car.
A lot of people like trading their cars off in a couple of years to get a newer model. Many times the first car loan is not paid off, so they do refinancing of their first car loan and add it to the new car loan. Another reason is for additional cash for personal reasons.
As long as the collateral of the loan (car, etc.) is worth more than the balance of the loan, banks are more than happy to help with refinancing, if the payments have been made on time, of course.
Mortgage Rates Refinance Specific links
Mortgage Rates Refinance News
Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance - MarketWatch (press release)
 WRAL.com | Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance MarketWatch (press release) NAR supports the "Responsible Homeowner Refinancing Act" because it offers relief to responsible homeowners who have good credit and consistently meet their mortgage obligations, but who have been unable to refinance into lower interest rates because ... Freddie Mac: 30-year mortgage rate down a tick at 3.78% US 30-Year Mortgage Rate Falls to Record 3.78 Pct. 30-year mortgage rate hits another record low |
Time to Refinance While Mortgage Rates are So Low - FreeRateUpdate.com
 Christian Science Monitor | Time to Refinance While Mortgage Rates are So Low FreeRateUpdate.com After taking a look at these details, many borrowers are going to find that it is time to refinance while mortgage rates are so low even if they refinanced several years ago. For those with adjustable mortgage rates, it is the perfect time to switch to ... Record-low mortgage rates spur refinancing MBA Weekly Survey: Refinance Applications Increase Because of Record Low ... Mortgage applications up on refi demand: MBA |
Bankrate: Mortgage Rates Hold at Record Lows - MarketWatch (press release)
 e-wisdom.com | Bankrate: Mortgage Rates Hold at Record Lows MarketWatch (press release) NEW YORK, May 24, 2012 /PRNewswire via COMTEX/ -- Mortgage rates were little changed, remaining at record low levels. The average rate on the benchmark 30-year fixed mortgage rate was unchanged at the record low of 3.97 percent according to ... Mortgage Rates Today: Wells Fargo, PNC Bank and KeyBank Refinance Rates for ... Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ... Mortgage rates drop to new record lows, mortgage activity jumps |
Real: FHA streamline refinance gets cheaper - The Republic
Real: FHA streamline refinance gets cheaper The Republic The government is about to make refinancing FHA mortgages more affordable -- and potentially easier -- for hundreds of thousands of homeowners. — The Federal Housing Administration will reduce mortgage fees significantly for borrowers who qualify for ... |
Mortgage Q&A: Borrowers hit by mess others made - Washington Times
 Washington Times | Mortgage Q&A: Borrowers hit by mess others made Washington Times The Home Affordable Refinance Program (HARP), initiated a couple of years ago, was designed to help folks with good credit and an evident ability to repay their loans. They were unable to refinance to a lower rate, however, because their property ... Don't HARP on it, refinance program too good to pass up |