The Four Most Important Questions to Ask Before Refinancing Your Mortgage
Posted by: admin in Real Estate, tags: Current Interest Rate, Current Mortgage, Financier, Loan To Value Ratio, Mortgage Term, Mortgagee, Payback Period, Refinancing Your Home, Refinancing Your Mortgage, T Pay
Thinking of refinancing your home mortgage can seem overwhelming, with so many options on the market. If you break your thought processes into four categories it will be a whole lot easier for you to focus: Think about the term of your mortgage, your current interest rate compared to the new rates on offer, are you staying put or planning to move in the short term future, and do you have enough credit to find a mortgagee happy to take over your loan?
The mortgage term is how long the loan is spread over, and then there is the payback period meaning how long will you be with the new financier before you have made back to money it cost for the refinancing. These costs include appraisal fees, bank fees, lawyer fees and early pay out fees assigned to your current mortgage. Some lending institutes will allow you to absorb those charges associated with transferring into your home mortgage so you don’t pay anything in cash at the time.
Probably the most important thing for you to understand is exactly how much your interest rate will go down. If the new rate is over two percent less than the old one, refinancing is probably going to be worth your while. Any less than that and the recovery period or payback time will be too long and will result in more of a loss to you.
For those people who are hoping to move home in two years or less refinancing beforehand is not a good idea. The refinancing costs for doing the mortgage twice over will be too high leaving you noticeably behind.
Lenders looking to refinance your loan for you are focused on the LTV or loan-to-value ratio. This means the amount of your mortgage in comparison to your home’s appraised value. In some cases the mortgagee will only refinance if the new loan is to be 90% or less of the homes value, but every bank and lender has their own LTV limits. In some cases simply paying refinancing costs yourself will give you a better LTV.
If you do your research, refinancing your home mortgage can save you thousands in interest, but it can lose you the same if you don’t do it right. Check if you know someone who can recommend a lender to refinance with, or take time to see a variety of different ones and make your own informed decision. See below for more information on Mortgage Refinancing.
By: Charley Hwang
How to Mathematically Compute For the Mortgage Formula?
Posted by: admin in Real Estate, tags: 12 Months, Computing, Exact Figures, Getting A Mortgage, Home Mortgage Loan, Interest Rate, Lending Institutions, Mortgagee, Property Tax, Prospective Borrower
It would be easier for anybody who intends to require a home mortgage loan to know a simple mathematical mortgage formula that would enable them to compute for themselves the prevailing mortgage rates. This is useful because it could make the prospective borrower determine if he can afford to actually get a home mortgage without the need of actually acquiring the services of brokers or agents. This could also assist the mortgagee in choosing the best lender that could offer him the lowest rates.
The foremost use of this mathematical mortgage formula is to help the borrower figure out how much he would need to pay monthly after he gets a home mortgage.
Computing using this mathematical mortgage formula is actually very easy. The mortgagee only needs to get the average interest rate of the lending institutions. What you need to do next is to figure out the property’s value. Let’s say for example the value of the property is $600,000. If the down payment required is $100,000, the amount to be loaned becomes $500,000. Multiply the average interest rate to $500,000. The product, which in this case is $20,000, should be divided by 12 months. The quotient, which is $1,666.67, will be the monthly payment.
This mathematical mortgage formula, however, does not include in its calculations the taxes and insurances that usually comes with the purchase of a home. This should be taken into consideration when getting a mortgage. The property tax and owners insurance vary depending on the state the property is located.
For those who want exact figures and simpler means to calculate their monthly amortizations, they may just go to different websites that offer mortgage calculators which could give them immediate totals and figures.
By: Darryl Power
