Loan mess at Hamburg continues Boyertown Berk Montgomery Newspapers, United States - Nov 18, 2008 24 on an option to refinance a $25 million variable rate loan that is depleting the district's $500, 000 reserve fund and could threaten its general fund ...
TEXT-Fitch release on India's National Housing Bank Reuters India, India - Nov 18, 2008 In addition, the FY08/09 budget of the GoI announced an INR10bn fund (equivalent to 6% of NHB's borrowings at FYE June 2008) to help NHB refinance rural ...
Bair?s Testimony: More Aggressive Intervention Is Needed Wall Street Journal Blogs, NY - Nov 18, 2008 However, given the inherent limitations in a loan-by-loan refinancing process, we believe additional measures must be undertaken to provide stronger ...
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Recent News and Articles on the Keywords: refinance + refinancing + introduction Related to the article below (Last Update: 8/4/2008)
City running short of time to refinance debt Pittsburgh Tribune-Review, PA - By Jeremy Boren Time is running out for Pittsburgh to cash in on refinancing some of its debt, budget officials said Monday. Unusually high insurance quotes ...
Are some loans too small to re-fi? Boston Globe, United States - I'd like to re-fi since I plan on staying in the house but was told that this was a rather small amount to refinance. I'd like to go to a 15 year mortgage. ...
Council to look at refinancing Watertown Daily Times, WI - According to city Clerk Mike Hoppenrath, the city is looking to issue the bonds to refinance a short-term loan from last year. ?Now we are just locking in ...
Sigma creditors look to join forces Financial Times, UK - The move by some of Sigma?s creditors comes as the fund ? which held the title of largest fund of its kind ? needs to refinance billions of dollars of debt ...
Barclays Issue Hits LTV Wall Real Estate Finance and Investment, NY - And if Gemini cannot refinance with a new loan, it and other major CMBS also hit by the falling commercial property prices will have to enter forced asset ...
School Bond Debt In Sights Wheeling Intelligencer, WV - Aug 3, 2008 By BETHANY ROMANEK Ohio County taxpayers could see a reduction in their personal property tax now that county school officials are hoping to refinance...
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Introduction - JR Barth, JD Shilling - The Journal of Real Estate Finance and Economics, 1992 - Springer ...INTRODUCTION... notion that actual prepayment decisions by households do not depend
only on the present value of the savings associated refinancing when mortgage ...
3 Bank loan maturity and priority when borrowers can refinance - DW DIAMOND - Capital Markets and Financial Intermediation, 1993 - books.google.com 3 Bank loan maturity and priority when borrowers can refinance DOUGLAS W. DIAMOND
1 Introduction This paper provides a theory of how highly levered borrowers ...
[PDF]Home is Where the Equity Is: Liquidity Constraints, Refinancing and Consumption - E Hurst, F Stafford - Journal of Money, Credit and Banking, 2004 - nber.org ... Page 3. 1 Home is Where the Equity Is: Liquidity Constraints, Refinancing and
Consumption I. INTRODUCTION The home is the major asset for most households. ...
Optimal Recursive Refinancing and the Valuation of Mortgage-Backed Securities - FA LONGSTAFF - NBER Working Paper, 2004 - papers.ssrn.com ... Page 3. 1. INTRODUCTION... The key element that has proven difficult to explain within
a rational model is how mortgage borrowers choose to refinance their loans. ...
Credit and Efficiency in Centralized and Decentralized Economies - M Dewatripont, E Maskin - Review of Economic Studies, 1995 - JSTOR ... decentralization offers a way for creditors to commit not to refinance such projects ...
1. INTRODUCTION We investigate how the degree to which credit markets are ...
Implied Mortgage Refinancing Thresholds - PG BENNETT, RW PEACH, S PERISTIANI - papers.ssrn.com ... 2 Page 3. IMPLIED MORTGAGE REFINANCING THRESHOLDS Paul Bennett, Richard
Peach, and Stavros Peristiani June 12, 1998 1. INTRODUCTION...
Mortgage Valuation and Optimal Refinancing - SR Pliska - Proceedings of Stochastic Finance, 2004 - Springer ... Finally, the equilibrium problem, where the mortgagor is a representative agent
in the economy who seeks the optimal refinancing strategy and ... 6.1 Introduction...
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Introduction to Refinancing
Refinancing involves paying off your current mortgage and replacing it with a new mortgage. It often involves many of the same steps and expenses that were required when the original mortgage was obtained.
The most common reason to refinance is to lower monthly mortgage payments, but there are other reasons to consider refinancing. Please read the "Reasons to Refinance" and "Should You Refinance?" pages. Additionally, you may wish to visit this site: A Consumer's Guide to Mortgage Refinancings.
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Reasons to Refinance
Lower the Monthly Payment: If interest rates have dropped, refinancing may lower your mortgage payment. This is the primary reason people refinance.
Reduce the Term (Length) of the Mortgage: A drop in interest rates may allow you to shorten the amount of time you pay the mortgage but leave the mortgage payment about the same.
Reduce the Risk on an Adjustable Rate Mortgage (ARM): An ARM mortgage may have enabled you to afford your home but if the interest rate has increased significantly, evaluate a fixed rate alternative. The risk of further interest rate increases is then eliminated.
Use the Home's Equity: As an alternative to a home equity loan, you may elect to refinance your home for an amount greater than the remaining balance of your mortgage. This is known as a "cash out" loan.
Consolidate Debts: An owner with outstanding loans or credit card balances that have high interest rates can consolidate these loans into one new mortgage.
Should You Refinance?
To refinance or not depends on your own personal financial situation. There are many mortgage options available so make sure to carefully examine each option. Also, remember that the best option may be to do nothing at all.
Points to consider:
Do I have the funds that refinancing may require to cover up-front costs and fees?
Refinancing your mortgage may require you to pay a large amount of money to cover up-front costs and fees. If you do not have enough money to pay the up-front costs completely it may be possible to finance some of the costs by including them into the new mortgage.
How long until I recover the costs of refinancing?
The rule of thumb is the refinancing costs are recovered within 2-3 years. So, if you plan to sell the house or pay it off shortly, you may not want to refinance because you will not recover the costs. Obviously, this depends on the up-front costs and the savings with the new mortgage.
Has my income increased substantially?
If your income has increased substantially, you may be able to afford higher monthly payments. This may allow you to shorten the term of your mortgage. If the available interest rate is lower for the shorter term mortgage, refinancing is a good option. Otherwise, simply make larger principal payments against your current mortgage.
Is the current loan an Adjustable Rate Mortgage (ARM)
If the current rates for a fixed rate mortgage are the same or slightly higher than your ARM, refinancing may make sense. If the fixed rate is lower than they are expected to be when your ARM converts to a fixed rate, it may make sense to refinance.
Obviously, much thought needs to go into the refinancing decision. Also, you should evaluate this decision regularly to account for changes both in your financial situation and the economy. Perhaps, the decision is not to refinance now, but a few years from now it may save you thousands of dollars.
