African American Homeowners Best and Worst Times To Refinance
By Roy Primm
The refinancing boom is still going strong in many areas of the country. But a question keeps coming up more often. And that question is when is the best time to refinance?
After all, there is usually always a best and worst time to do most activities. A time when it s most rewarding to act and a time when conditions limit your advantages at best, or at worst involves greater risk and loss.
In this article I ll discuss the conditions or circumstances that will alert you to the best and worst times to refinance.
However, don t just stop there. To get the most accurate picture do your own investigation and research for your specific situation.
Everyone has there own unique circumstance. That s why you should consult with a qualified financial adviser with experience in helping people in your specific financial state.
Take the following suggestions as guidelines or road maps to take action or to hold off until a more advantageous time.
First, I ll cover the best time to refinance:
Best Time To Refinance
- If you are staying in your current home for less than two more years, it is not advisable to refinance your home mortgage.
- If you have an Adjustable Rate Mortgage you may want to refinance into a Fixed Rate Mortgage. This could help to lower your costs, stabilize payments and decrease risk.
- An obvious time to refinance your loan might be when you have an adjustable-rate mortgage (commonly known as an ARM) and the current rates are low.
- If you could make a larger payment now and want to pay off your mortgage sooner, it s possible to refinance for a shorter-term mortgage. But don t do this without first finding out if you could pay off your existing mortgage just as quickly and cheaply.
- It s important to know if your current mortgage has any prepayment penalties so you can make an informed decision.
- If interest rates have just begun dropping it is a sure sign the housing boom will soon be underway. Mortgages will become easier to obtain and at lower rates, which means buyers can more easily qualify for loans.
- If you can save at least 1.5 % interest rate on your loan.
Worst Time To Refinance
- If you re staying in your current home for less than two more years, it is not advisable to refinance your home mortgage.
- Relying exclusively on promotional material you receive in the mail. Also, do not accept a loan from a telephone solicitation — without first checking out that potential lender.
- If you don t plan to stay in your home for at least 2 years. In typical cases, the month to-month savings won t compensate for closing cost and other refinancing charges unless you stay in your home for at least two more years.
- If you can t save at least 1.5% interest rate on your loan.
- Trading a fixed rate for an adjustable rate when rates are going up.
By following these guidelines you ll avoid acting when you should wait. In addition, you ll take action in time to get the best refinancing opportunities.
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