Is It Time to Re-Finance? Whether or not to re-finance is a question homeowner may ask themselves many times while they are living in their home. Re-financing is essentially taking out one home loan to repay an existing home loan. This may sound odd at first but it is important to realize when this is done properly it can result in a significant cost savings for the homeowner over the course of the loan.

Are You Considering Re-Financing? Homeowners who are considering re-financing their home may have a wealth of options available to them. However, these same homeowners may find themselves feeling overwhelmed by this wealth of options. This process doesn’t have to be so difficult though. Homeowners can greatly assist themselves in the process by taking a few simple steps. First the homeowner should determine his refinancing goals. Next the homeowner should consult with a re-financing expert and finally the homeowner should be aware that re-financing is not always the best solution.

Learning about Re-Financing Online Many homeowners find the Internet to be very useful during the re-financing process. The Internet may be useful because it provides the homeowner with a wealth of information, because it provides the ability to submit loan applications and receive estimates online and because makes it easy for homeowners to consider complicated mathematical equations for a variety of options with ease. While the Internet can be a homeowner’s best friend it can also be the homeowner’s worst enemy.

Re-Financing with Bad Credit Many years ago, it would have been extremely difficult for those with bad credit to obtain a mortgage loan in the first place. However, today there are so many loan options available and so many ways for lenders to protect themselves that those with bad credit can not only find a suitable mortgage but can also find appealing re-financing options as well. Those with poor credit should carefully consider whether or not re-financing is ideal for them at the present time but the process is not much different for them as it is for those with good credit.

Re-Financing with an Interest Only Mortgage Interest only mortgages are a relatively new phenomenon in the re-financing industry as well as the home buying industry. While the appeal of an interest only mortgage is typically a greater monthly cash flow, this increased cash flow can come with a hefty price tag. In exchange for more cash flow each month, the homeowner may be sacrificing the ability to obtain a fixed rate mortgage as well as the ability to build equity.

Does It Pay to Re-Finance? This is a question many homeowners may have when they are considering re-financing their home. Unfortunately the answer to this question is a rather complex one and the answer is not always the same. There are some standard situations where a homeowner might investigate the possibility of re-financing. These situations include when interest rates drop, when the homeowner’s credit score improves and when the homeowner has a significant change in their financial situation.

What is a Cash Out Re-Finance? A cash out re-finance basically enables the homeowner to re-finance their home for an amount greater than the balance of the exiting mortgage. The homeowners than repay the existing balance plus the additional amount over the course of the loan period and are given a check for the amount above and beyond the balance of the exiting mortgage. The homeowners can use this check for any purpose they choose now and repay the debt along with the rest of re-financed amount.

Choosing a Fixed or ARM Option One of the most important decisions a homeowner will have to make when deciding to re-finance their home is whether they want to refinance with a fixed mortgage, an adjustable rate mortgage (ARM) or a hybrid loan which combines the two options. The names are pretty much self explanatory but basically a fixed rate mortgage is a mortgage where the interest rate remains constant and an ARM is a mortgage where the interest rate varies.