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Is Debt Consolidation For You?
Want to pay all your bills with one check? Debt consolidation may be the answer. It's not a loan or bankruptcy but a program, run primarily by nonprofit organizations, that helps reduce interest rates, eliminate late-payment fees and lower payments. With ...
Mortgage & Refinance Tips: Debt To Income Ratios
Debt to Income Ratios, often referred to as "DTI's", are a key calculation used in the refinance, debt consolidation, and purchase mortgage application process. A debt to income ratio is arrived at by dividing your monthly debt payments by your pre-tax ...
Mortgage Refinancing
Mortgage is a long term loan and the mortgage monthly payments form a major monthly expense. A lower mortgage rate means lower monthly mortgage payments. This is one reason why people hunt for low interest rates on a mortgage. As we know, there are two ...
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Mortgage is a long term loan and the mortgage monthly payments form a major monthly expense. A lower mortgage rate means lower monthly mortgage payments. This is one reason why people hunt for low interest rates on a mortgage.
As we know, there are two types of mortgage rates i.e. fixed and floating, and different people prefer different types of rate. Again, the prevailing market rate keeps changing all the time. So it's quite possible that you entered a mortgage at a rate that is higher than the current rate. This is when you start thinking of mortgage refinancing. By mortgage refinancing we mean full payment of the current mortgage loan by entering into a new mortgage loan at a lower rate. So mortgage refinancing starts making sense as soon as the difference in the mortgage rates becomes significant (say 1.50-2% points) i.e. prevailing market rate comes down significantly as compared to the mortgage rate on your current mortgage. Mortgage refinancing decision would, of course, also depend on the remaining term of your mortgage (for mortgage refinancing would make no sense if you had just a short period of say 4-5 years remaining on your current mortgage). These criteria for mortgage refinancing are based on the various costs associated with mortgage refinancing. These mortgage refinancing costs include prepayment costs for the current mortgage, closing costs of the new mortgage and other fees etc. Generally, people use mortgage refinancing as a tool to move from a higher adjustable rate mortgage to a lower fixed rate mortgage. Though the reverse is possible too in some cases but adjustable rate mortgage to fixed rate mortgage is generally the case.
Another reason for mortgage refinancing is 'need for money'. So, if you have built a significant home equity, you can use mortgage refinancing to get a home mortgage loan that will generate cash for you (by bartering your home equity). This money generated from mortgage refinance can be used for various purposes like financing the education of children, debt consolidation or home renovation. Debt consolidation is one big reason for mortgage refinancing. You can use mortgage refinance for creating money to get rid of high interest debts (like credit card debt, personal loans etc) and hence save money and your credit rating too.
By mortgage refinancing you can save thousands of dollars in terms of the total interest you pay over the term of loan. So mortgage refinancing is surely a good option but must be exercised only after proper evaluation of the situation and of your own needs.
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Brenda Shanahan: Four types of debt problemsMontreal GazetteQ: I was reading your article about debt solutions and it was very interesting and helpful. I am wondering if you know any good accredited debt consolidation company that was reliable and could reduce my debt and stop interest?and more » |
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Debt Guides to Tomorrows FutureSBWire (press release)San Diego, CA -- (SBWIRE) -- 05/22/2012 -- Debt consolidation is a great option for people who are struggling to manage multiple debts. People who benefit from debt consolidation are individuals who are paying back their debt at very high interest ...and more » |
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