Tehama Country Real Estate

Tehama Country Real Estate – When Should You Refinance Your Home? Real Estate Spotlight By Alex Mason F For qualified buyers, the refinance option is your home, this is one decision that should be always on the table when choosing a mortgage for your thought out very carefully. The new loan will have a higher monthly mortgage payment and may be extendhome. ed from a short-term loan to a long-term fixed loan that However, the key question is when to refinance to you will be repaying for many years with interest. save yourself significant money over the life of the loan. Before signing on the dotted line, be sure you are in a Interest rates can fluctuate from low, medium and stable financial situation to cover the added costs. high rates often reflective of the current climate in the economy. When the national debt ceiling is high or teetering in a precarious position, the home loan borrower may experience a higher Refinancing and Cash Withdrawal One of the best reasons to pull cash from the equity in your home is to invest the dollar amount into the property's rehabilitation. rate. As the market calms Home owners with suffi- down and things begin to cient equity that are thinking stabilize, the interest rates of selling their house will do may take a dive. well to take out a refinancing loan to get the property in The borrower who is con- better selling condition. templating a home loan refinance will do well to The wrong reason to pull stay informed on market cash from your home is to trends and be ready to refinance in a New buy items with little to no York appreciation minute when the time is value. This would include a brand new right. automobile, which will begin to depreciate as soon as you Refinancing and Your drive it off the car lot, vaca- Credit Score tions, shopping sprees, and Another factor to consider when refinancing your other frivolous purchases. Do invest into yourself with education, business signed that matched your credit score to a new lower start-up capital if you have a sound and viable business rate offered by the banks. plan, or for emergency cash for divorce, medical or Borrowers with less-than-perfect credit are subject to other needs. property is to compare the initial loan product you somewhat higher interest rates. The interest rate on a mortgage matters as to how much the total cost will be for the home over the life of the loan. Does it Cost Anything to Refinance? In a nutshell, the answer is yes. Depending on the type of loan you wish to secure and which loan broker or banker handlers your paperwork, you will have to Finding a lower interest rate and getting your mort- pay from one to three percent of the new loan balance gage locked-in can save you tens of thousands of dol- to refinance. lars on a 30-year fixed loan. As your credit score improves over time, you may be eligible for a new and dramatically lower interest rate through refinancing. Handing over the commission money to your agent is a fair and square deal. They will earn their cut by shopping the banks to get you locked-in to the best market Refinancing to Pull Cash Out rate. In addition, he or she will ensure that all your For many home owners, their piece of real estate is complicated paperwork is in good legal order and coortheir cash cow to pull out some equity for an emer- dinate the deal with the banks. gency. Trying to refinance on your own may seem doable, Refinancing at a lower rate allows a borrower to take but there are many bumps in the road that a skilled loan out a lump sum of cash from the home and add the bal- officer can protect you from. Meeting critical deadlines, ance to the end of the loan. No matter how tempting it may be to pull cash from arranging for an appraiser to inspect your home, and making sure the banks do not take advantage of their 3

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