Tehama Country Real Estate

Tehama Country Real Estate – 3 WHEN SHOULD YOU REFINANCE YOUR HOME? or qualified buyers, the refi- nance option is always on the table when choosing a mortgage for your home. F However, the key question is when to refinance to save yourself significant money over the life of the loan. Interest rates can fluctuate from low, medium and high rates often reflective of the current climate in the economy. When the national debt ceiling is high or teetering in a precar- ious position, the home loan borrower may experience a higher rate. As the market calms down and things begin to stabilize, the interest rates may take a dive. The borrower who is contemplating a home loan refinance will do well to stay informed on market trends and be ready to refinance in a New York minute when the time is right. Refinancing and Your Credit Score Another factor to consider when refi- nancing your property is to compare the initial loan product you signed that matched your credit score to a new lower rate offered by the banks. Borrowers with less-than-perfect cred- it are subject to somewhat higher inter- est 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. Finding a lower interest rate and get- ting your mortgage locked-in can save you tens of thousands of dollars on a 30- year fixed loan. As your credit score improves over time, you may be eligible for a new and dramatically lower inter- est rate through refinancing. Refinancing to Pull Cash Out For many home owners, their piece of real estate is their cash cow to pull out some equity for an emergency. Refinancing at a lower rate allows a borrower to take out a lump sum of cash from the home and add the balance to the end of the loan. No matter how tempting it may be to pull cash from your home, this is one decision that should be thought out very carefully. The new loan will have a higher monthly mortgage payment and may be extended from a short-term loan to a long-term fixed loan that you will be repaying for many years with inter- est. Before signing on the dotted line, be sure you are in a stable financial situa- tion to cover the added costs. 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 prop- erty's rehabilitation. Home owners with sufficient equity that are thinking of selling their house will do well to take out a refinancing loan to get the property in better selling condition. The wrong rea- son to pull cash from your home is to buy items with little to no appreci- ation value. This would include a brand new auto- mobile, which will begin to depreciate as soon as you drive it off the car lot, vacations, shop- ping sprees, and other frivolous pur- chases. Do invest into yourself with educa- tion, business start-up capital if you have a sound and viable business plan, or for emergency cash for divorce, med- ical or other needs. 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 pay from one to three per- cent of the new loan balance to refi- nance. 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 rate. In addition, he or she will ensure that all your complicated paper- work is in good legal order and coordi- nate the deal with the banks. Trying to refinance on your own may seem doable, but there are many bumps in the road that a skilled loan officer can protect you from. Meeting critical dead- lines, arranging for an appraiser to inspect your home, and making sure the banks do not take advantage of their clients are three of the top reasons to never go it alone. Alex Mason is a former real estate agent and mortgagebroker living in Los Angeles. Real Estate Spotlight By Alex Mason

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