Purpose
Refinance Purchase Home Equity

Loan Type
Fixed ARM Interest Only FHA

Amount

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What Refinancing Options Should I Consider?

By Jim Micheals

The best refinancing options today may vanish. Discover how to guarantee lower monthly mortgage payments and gain access to cash using home equity.

The U.S. economy remains sluggish despite massive stimulus efforts. Jobs remain in short supply, salaries are stagnant, and small business growth is minimal. As a result, many Americans cope with enduring financial strain by reducing living costs. As a first defense, refinancing options provide access to home equity and perhaps lower monthly payments.

Evaluating Refinancing Options and Opportunities

Economic news is not universally bad. Mortgage interest rates remain at or near an all time low. Homeowners may take advantage of historically low mortgage rates by refinancing at a fixed rate of interest. A fixed rate guarantees the rate will not change for the life of a mortgage. In addition, 30 year repayment terms are common. A few lenders offer 40 year repayment terms.

Alternatively, homeowners may use their personal refinancing options creatively to reduce total debt payments while increasing home payments slightly. With sufficient home equity, a debt consolidation loan may renew an existing loan and provide additional funds. Once received, apply additional funds to credit card accounts, car loans and other high interest rate debts. Mortgage payments may increase yet the offsetting elimination of expensive loans often yields substantial savings.

Variable Rate Mortgages

Qualifying for a low fixed rate is more difficult than receiving approval for an adjustable rate mortgage. Most lenders prefer adjustable rates because of the greater profit potential. In essence, monthly payments change in direct response to a designated economic index.

The recovery of U.S. economy is certain. Recovery may occur over a few years or a decade. In direct response, monthly payments and interest costs associated with an adjustable rate mortgage will increase. Nevertheless, ARMs provide highly popular refinancing options when fixed rates are not available.

Related posts:

1. Do I Get Term Options On My Mortgage Interest Rate?
2. Will Refinancing My Home Lower My Mortgage Interest Rate?
3. What Are The Options For Home Equity Loans In Today’s Market?
4. Are There Risks Of Adjustable Rate Refinancing?
5. Should I Refinancing With Current Mortgage Rates?