Complete Information on Mortgage Refinancing

Complete information on mortgage refinancing


After the recent colossal economic crisis, when people are not being able to make mortgage payments on time after meeting the household expenses, it is recommended to refinance the mortgage. But before you consider the option of mortgage refinancing, gather the complete information. 

Refinancing – changing terms of a mortgage:

Mortgage refinance refers to the replacement of the existing debt with a new one under different terms and conditions. In other words, borrowers will just allow someone to renegotiate the debt at more favorable terms. When you refinance your debt, you simply offer your debt to another lender to buy out who in turn will offer you more favorable terms than your existing ones. Since your current lenders will not want you to use another lender, they will give you the best deal on refinancing to retain your business. 

When to consider mortgage refinance?

Refinancing is essentially a tool that can be used to lower the monthly payments and guard against the risk. There are many circumstances when you must consider the option of refinancing your mortgage. For instance, if interest rates have fallen since the time you obtained your mortgage, chances are more to refinance the mortgage at a lower interest rate. If you feel that the interest rates are rising high and becoming difficult to manage, consider refinancing the duration of the mortgage. This means, add years to your mortgage so that your mortgage payments are lower. Another good reason to refinance mortgage is to switch from adjustable-rate mortgage to a fixed-rate mortgage. With adjustable rate mortgage, chances are more that your interest rates will increase in near future. On the other hand, with fixed rate mortgage, interest rate will remain same throughout the loan term. Thus, refinancing to a fixed-rate mortgage will allow you to lock in at lower interest rates, even if interest rates rise. 

How to refinance mortgage?
  • First and foremost, gather all your financial information, including bank statements, W2s, investment account statements and two months of pay stubs. Also include a copy of your most recent mortgage statement.
  • Then take a close view at your current credit score to determine the type of mortgage you can qualify for. Credit scores can be obtained from three major credit bureaus, TransUnion, Equifax and Experian.
  • Look for prospective lenders to refinance your mortgage. Choose the one whom you feel comfortable working with. Once your have chosen a lender, he will review your credit report and will verify the financial and employment information.
  • Once the lender is done doing the verification, go through the closing process. The closing process will pay off your existing mortgage and generate a new one through refinancing.
A few important things to consider before refinancing:

Before refinancing the mortgage, you must consider the costs associated with it. Take every drop in interest rates into account before going for the option. Some mortgages charge penalties for early repayment and some charge fees while refinancing. This can counter your savings that you have gained so far. So to avoid these unwanted costs, be careful while considering the refinance option. For people with very large mortgages, it is sometimes worth refinancing more often because the amount saved in interest is larger than transaction fees involved. 

In conclusion, before refinancing your mortgage, educate yourself by going through the information mentioned above.

Five ideas to create jobs that are so crazy they might just work

With unemployment stuck above 9 percent, Washington is trying to “pivot to jobs” once again. And already the discussion feels tired. The White House’s much-hyped ideas don’t seem bold enough, and Republicans have had little to offer aside from the idea that reducing government regulation will somehow let the free market work its magic.

A range of less conventional ideas for creating jobs can be found beyond the narrow Washington conversation, however. They aren’t necessarily politically correct–but that doesn’t mean they would not be effective. It’s not like anything else we’ve been trying lately has been working.

Here are five of the best so-crazy-they-just-might-work ideas to get the economy back on track.

1. Bulldoze excess housing stock

The struggling housing sector continues to exert a drag on the economy as a whole.

Five ideas to create jobs that are so crazy they might just work | The Lookout – Yahoo! News
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How To Choose The Right Type of Savings Account

guest post by Jonny Pean

For most people, the habit of saving money is a bit difficult.  First of all, it isn’t very exciting.  If you have a choice of saving a few hundred bucks this month, or spending it on that new designer purse, which one is more satisfying??  Of course, the designer purse!

Building a substantial cushion of liquid savings is essential, though, not only for peace of mind, but also in order to build true wealth over the long-term.  In this article, we are going to discuss the 3 basic types of savings accounts.  Personal finance experts generally recommend that the average person should have at least 3 months of living expenses in an account that is highly liquid.

Traditional Bank Account
Most local banks will allow you to open a free savings account with a very low initial account deposit.  That amount can be as low as $20 at many institutions.  Unlike the forex market, this is typically the best way to get started saving money.  This type of savings account typically offers the lowest interest rates, but it is also considered the most liquid.  Funds that you hold in a traditional account can be withdrawn at any time without penalty, and with an ATM card, funds can be withdrawn around the clock.

Money Market Account
Your local bank most likely offers money market accounts as well.  These are accounts that invest 100% of its capital in U.S. treasuries and other forms of U.S. government debt.  This is seen as a very safe, conservative investment with no chance of loss, since the government can always print more money to repay its lenders.

These accounts typically offer a more aggressive interest rate return than a standard savings account, but they also are not as liquid.  Typically, it will take several business days to withdraw funds.

Certificate of Deposit
This is a favorite among conservative investors because it offers the most aggressive interest rate.  CD’s are a very popular way to invest cash savings.  The increased interest rate is the major advantage that this type of savings vehicle holds over the previously mentioned ones.  However, the primary drawback is that CD’s will require you to keep your funds invested for until the CD reaches maturity, which can be anywhere from a few months to a few years.  Typically, the longer your cash is tied up, the better interest rate you will earn.

If you want to withdraw your cash before the maturity date, you can do that, but not without paying a penalty.  This makes a CD the highest yielding investment vehicle of the three discussed here, but also the least liquid.

Understanding the interest rate payoff and degree of liquidity in each of these investment vehicles will help you determine which is right for you in your current financial situation.