Home » Self Improvement

Be Sure You Have The Right Reason To Get A Home Refinance

Oct 29, 2007
"Come into my parlor", said the spider to the fly. "We've got the lowest interest only loan. Just put up your house as equity." The fly immediately put up his house and went into the parlor, only to be devoured as a savory dinner. Are you that unfortunate fly?

Why are you getting a home refinance?

There are many reasons to get a home refinance, and 99.9% of these reasons are to pay off debts. Experts would advise to consider carefully your reason to refinance and stake your home.

Another reason to refinance is to get investment money for a business. This sounds good, but the risk is great. Would you dare navigate un-chartered depths at the risk of losing your home?

Perhaps you've got this zany idea to earn tax deductions so you took out a home refinance loan. In principle, you are paying a dollar to earn 30 cents, and for this you put your home.

Not all these reasons for home refinance are recommended. Your house is the biggest investment of your lifetime and putting it up for these flimsy reasons is nothing to crow about.

Better reasons to home refinance

Just because everybody has lined up for a home loan does not mean it will work according to your expectations. Loans have to be paid back. To be able to do so on the same amount of cash inflow for a number of years means changing your lifestyles and spending habits. Or like the fly, you will be dinner for the spider.

It is not easy to lose a home. Apart from destroying your credit score, you'll have to uproot your family from all that is dear. So play smart when you are getting a loan.

A bankable reason to home refinance is to get additional cash flow for your business expansion or fund a wife's last year in college. Both ways you see an end goal towards increased revenues and income.

How to get a better deal

Depending on your financial motivation like cash flow flexibility, you are looking at more savings in a year's time from a lowered monthly payments compared to your current mortgage.

Remember that the longer the loan term, the lower the monthly payment. If you add up all your expenses in 30 years time, you'll have paid more than double the loan amount. So get a lower interest rate and be sure there are no additional or hidden costs.

If you have a $200,000 30-year mortgage loaned on an interest rate of 8%, you'll have paid $440,400 at $1,468 a month. If you refinance at 6% you will be paying $1,199 a month or a total of $359,700. But wait, there's more. Depending on the closing costs, it will take months before you can break even.

If you are staying in the house for more than 10 years get the fixed rate but if you are going to sell the house in five year's time better get the adjustable rate mortgage.

Never rush into a home refinance. Take your time until you have understood all the workings of your target refinance program. Read the contract carefully.

Be ready to pay and change your lifestyle. No matter the advantages of your home refinance, if you fail keeping up with the payments you'll get the short end of the stick.
About the Author
Know the ABCs of home refinance , refinance home mortgage , and mortgage refinance . Visit www.whataboutloans.com now and get the best quotes.
Rating:
Please Rate:
(Average: Not rated)
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources