When Acquiring a New Mortgage, Homeowners should know how influential a Refinance Rate can be

FHA REfinanceDepending on how an individual goes through life will be influenced by factors either looked at or not paying any attention to. For example, a person can wake up at six in the morning, eat breakfast while watching the weather and traffic report at half past six, finishing eating and getting dressed by half past seven because you had trouble finding an appropriate raincoat and umbrella, arriving to work fifteen minutes before nine because of bad weather and unexpected construction work and finally clocking in and ready to begin the long day at work exactly at nine in the morning; just making it on time to avoid getting in trouble with the boss. I am sure there are people familiar with this type of a routine. Then, there is another person who starts their day actually the night before. This individual watches the weather and traffic report before going to bed in order to know how to dress as well as what roads to avoid from getting stuck in traffic. Instead of waking up at six and watching the news to see how to get ready appropriately, you easily get up at seven and having a relaxing breakfast while watching the same forecast and traffic report shown last night, leave a few minutes before eight wearing the proper clothes and already knowing two quicker ways to get to work, arriving early at work at half past eight and by the time the clock sounds off at nine in the morning, your boss passes by your desk impressed that you were already working while others just made it on time or late to work.

This may have been a little over the top but I believe you get the point that by not planning ahead; it can prove to be a big problem by the end of the day. Another good example comes from refinancing a mortgage as if you do not plan accordingly, it can prove to be disastrous in the end! One factor to look at is a refinance rate. By understanding what this as well as how it can be used, it will increase the chances for a better finance.

Why do Homeowners need to know what a Refinance Rate is?

Okay homeowners…..let’s gather around so I don’t have to repeat myself or shout. Since we can all agree that a refinance is the solution to our given situation and therefore maximize it to our greatest advantage. One way to this is to find the lowest refinance rate possible. Anyone who is not familiar with these rates would question how this factors in with a refinance. Depending on what type of a new mortgage you purchase, it could be of little or major consequence.   Understandably, this can be confusing and not cut and dry as you might have expected. In a simple world, a fifteen-year refinanced mortgage can be offered at a five percent rate every month for the full refinance term. While this may not be that best rate offered, at least it is continuous and no surprises as a result of the way the contract was set up. However, there are different types of refinances that are offered to homeowners which can be positive or negative depending on the pros and cons of each. In order to make the right decision, remember to make the choice that best suits you as well as those you care about.

Can having more lead to a better chance of a acquiring a low rate?

Italians are known for saying, “manja, manja” which means eat, eat. However, being Jewish, I know I do the same when possible. This can be a bad thing when it comes to health issues though many disregard this anyway. Another example of more maybe being not better revolves around different types of refinance mortgages. Before you start calling me crazy for saying this, wouldn’t be the first time anyways in regards to other matters, let me explain for your well being. Life has taught individuals that when making decisions, everything has its pros and cons. Though making a choice shows the immediate benefits of the decision, we learn down the road what a horrible choice that decision led to. Take a new mortgage that gives a fantastic low rate of interest immediately and guarantees it stays the same for a total of five years! However, you agreed to a fifteen-year mortgage that starting in the sixth year; your interest rate would go up higher due to the effects of the market. How about switching in that you take a fifteen-year mortgage but stay at the same rate no matter what happens in the market! The downside comes with seeing the market swings in a borrower’s favor offering record low interest rates; sadly, you cannot take advantage of that because of the terms of the loan. The more loans that are available to choose from, the harder you need to look at the advantages and disadvantage before signing on the dotted line.

Please do not take what I said and think the purpose of my tirade was to sway you from staying away from refinancing. On the contrary, I do believe when a homeowner looks into the abyss as a result of being corned in a financial dilemma that there is a way to make it out into the light. That source of light and hopefulness can be a refinance of their home. What I want to make sure of that an individual is not blinded by the light and jumps right into it without realizing its pitfalls. One way to avoid this is to understand how influential a refinance rate can be as well as how understanding that will lead into a positive situation. By heeding the advice I have given as well as research on your own, it will increase the chances for a better finance that will finally end in prosperity and not one that will end in financial ruin.