We bought a home in August. We have a high interest rate because of our credit. The financer told us to refince in 6 months to bring the rate down. Are there any other benefits to refinancing?
2006-10-03 09:28:21 · 9 answers · asked by Lisa A 2 in Business & Finance ➔ Renting & Real Estate
There are a ton of benefits in refinancing if the timing is right. First, you need to be sure you have fixed the credit problems you have. Unfortunately buying a house doesn't give you good credit automatically. I am guessing the clown who told you that is more interested in making a premium on you a second time then putting you into a better financial position. If he has given you guidance for the past six months, my apologies on the "clown" thing. I am a mortgage banker at a very reputable bank, if you are interested in getting more specific guidance, give me a yell. I'd love to talk a little shop!
312/738-8436
2006-10-03 13:06:54 · answer #1 · answered by J O 3 · 0⤊ 1⤋
That's a pretty big benefit right there. Even fractions of % points can save you a lot of money. In 6 months you probably don't have any equity yet except for what you put down. Unless you are in some bubble and the house greatly appreciated, the biggest benefit for you now is lowering that rate and saving...As long as the closing costs aren't that great.
You can get some refinance quotes here from mortgage lenders in your area.
http://www.savingslife.com/loans/step1.php
and also threes a tool that you can use to see how much your house might be worth.
2006-10-04 06:28:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Refinancing makes sense if you plan to live in the home for a number of years. However, if you are only going to be there a short time, you probably won't cover the cost of the refi in the savings in interest payments. Before you refinance, decide if you plan to stay.
You can use a refinance to take out more equity from your property, but I would advice against doing that except in the case of money for a needed renovation (new bathroom, kitchen) that will actually add value to the property. People who constantly refinance and take out money never build equity for their retirement.
2006-10-03 09:42:16 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Of course your bank told you to refinance.... they make a crap load of money on the closing costs and fees.
Only refinance if you:
1. Derive some benefit from the refi such as substantially lowering your monthly payments.
2. Plan on staying in the house at least 5 years or longer
3. Have substantial credit card debt at a high interest rate, and you want one single payment.
Be very careful...your lender sounds like a shark.
Go to bankrate.com to check out current rates & to compare them to your current rate.
Also, stay away from option arm loans.... they are a total scam & very dangerous.... ironic that they give the mortgage broker the highest commission.
2006-10-03 09:32:17 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Only if you can save minimum of two percent on interest rate, pay low or no points and plan to keep the house at least two more years.
2006-10-03 09:31:52 · answer #5 · answered by beez 7 · 1⤊ 0⤋
Do you like saving money and keeping it or spending it? A Lower interest rate is one benefit...another is that you would have a lower payment as well....have someone like a lender look into it for you and you can save save save.....
2006-10-03 09:37:46 · answer #6 · answered by Lovely B 3 · 0⤊ 0⤋
besides getting a lower interest rate, you will also have the option of getting "cash out" if you wanted to do repairs to the home, put on an addition, etc
2006-10-03 09:31:12 · answer #7 · answered by sem3578 2 · 0⤊ 0⤋
You can get a lower mortgage on your home but they tend to finance you for a longer period of time.
2006-10-03 09:31:51 · answer #8 · answered by Medical and Business Information 5 · 0⤊ 0⤋
what was your credit before and now ?
2006-10-03 11:01:21 · answer #9 · answered by Anonymous · 0⤊ 0⤋