If you are considering refinancing your home mortgage with your bank you might want to reconsider. While refinancing with your bank might be convenient, you will pay too much for the new loan. Here are several facts about bank originated mortgages you need to know before refinancing.

The first thing you need to know about bank mortgage loans is that your bank is exempt from the Real Estate Settlement Procedures act that protects homeowners by requiring lenders to disclose their markup and fees. The Banking Lobby spent millions of dollars to have the law changed excluding banks. Why would you ever consider doing business with a lender that doesn’t have to play by the rules?

Secondly, banks mark up their interest rates to boost their profits when your loan is sold on the secondary market. In fact, banks make the majority of their profit selling loans to investors. The higher your mortgage rate the more the bank profits. The difference between wholesale mortgage rates and the rate your banker quotes you is called “Service Release Premium.”

Most bankers swear will swear to you that their interest rates are not marked up and will even show you the Bank’s rate sheets. The problem is the rate sheet includes Service Release Premium and because of the loophole in the Real Estate Settlement Procedures Act the bank is not required to tell you that they’ve marked up the rate. If you’ve done your homework you can get an idea of what wholesale rates are by checking the weekly yield on Fannie Mae’s website. Compare this yield to your bank’s mortgage rate and you can easily spot the markup.

You can learn more about refinancing your mortgage while avoiding costly mistakes by registering for a free mortgage tutorial.

For many of us coming up with "the" down payment for a home is quite a struggle. There are many reasons for this, such as your income, your family needs, your savings account is well, non-existent. Not to long ago if you didn't have at least 10 percent down you didn't have a 10th of a percent of buying a home. As of late it can be a very affordable 5 percent or zero percent. Okay now on to how it is done...So let's say you are a first time buyer (although this also works if you have already owned a home) and you simply need a break. You need a way to get into the market without spending a cent. Its called the No Money Down Mortgage, at least that's what its called where I live, maybe its called Zero Money Down where you live but you get the idea.

Now here is what is needed :There are specific qualifications....and yes they are pretty much in this order. Read on MacDuff....

1. An A Plus Credit History. No recent history of any bad debt of any kind, which also includes all payments for your credit cards or shopping cards etc, etc. must be paid on time in most recent months.

2. Limited liabilities. This means something like "Sign here....don't move while we look into your ENTIRE credit history, but disclosure is not a bad thing, if your credit is good it will certainly work in your favour. This is done to make sure you can carry the extra debt.

3. At least 3 years of stable employment. This needs to be verified on paper by your employer preferably or some form of financial statements. The employer is much better in most cases.

Finally. You must be able to carry large monthly payments. Without a down payment, obviously lenders and the bank want to make sure you can handle the obligation of larger payments. The monthly payments may increase from a few to several hundred more a month but you can buy several styles of home.

This is the program in detail it is widely known and used by almost all banking institutions for greater details or understanding I highly suggest you go to your local bank and have a sit down with your financial advisor, someone you know and trust.

So in a nutshell, if the down payment is the current problem, it may no longer be with this program.

You no longer need to pay your landlords mortgage, you can immediately get into a home with this program if you qualify. And again, sorry to repeat myself but go and make an appointment to review this option with your Realtor or banker or both. It's worth taking a look at. And always ask about mortgage leads...this will get the ball moving a little faster.

Getting a self employed mortgage can be a real struggle. Most lenders are looking for the security of a regular paycheck and solid employment to guarantee their loan is repaid.

There are a few tricks to ensure that you have a head start when it comes to qualifying for a self employed mortgage. It will require some preparation and some organization, but these tips could be the answer for which you have been searching.

The most important thing you can do is to keep good financial records. Most lenders will want to see three years worth of profit on tax returns before considering self employment as a job and not just a hobby.

It is also important to keep all your other debts as low as possible. The debt to income ratio could be the turning point for getting the loan. The higher your existing debt, the less money the lender will be inclined to offer you.

Just because one lender says no doesn’t mean the next one will do the same. Call around to your local lenders and then check online for additional options. As entrepreneurialism becomes more of the mainstream, some lenders are finding the risk is a good pay off.

The most important thing to do when you are interested in getting a self employed mortgage is to take your time. Rushing into any loan will usually end up costing you plenty in the end. Begin your search several months before you ever have the need for a loan.

Finding a self employed mortgage probably won’t be as easy as other types of loans, but it is possible. Keep good financial records so you can prove your stability, keep your debt to income ratio as low as possible, and take the time to talk to as many lenders as you can. With a little patience and lots of persistence, you should be able to find the perfect fit for your financial needs.

If you are refinancing your home loan and are considering an Adjustable Rate Mortgage there are a number of things that can go wrong. Doing your homework before refinancing will help you recognize and avoid these pitfalls. Here are several tips to help you avoid paying too much when refinancing with an Adjustable Rate Mortgage loan.

Adjustable Rate Mortgages (also known as ARM loans) became popular in early 80s. These loans featured lower interest rates than traditional mortgages and easier qualification. The problem with adjustable Rate Mortgages is that many homeowners use these loans to purchase homes they cannot afford with traditional fixed rate mortgage loans.

As the name implies, the interest rate changes over time; your lender adjusts the loan at regular intervals to the index your loan is tied plus their margin. Margin is the markup your lender adds to cover their “expenses.” The index your loan is tied to varies from one lender to the next and there is no one “ideal” index. Your loan may be tied to the Treasury Bill Index or even the London Inter-Bank Offered Rate or LIBOR index. The LIBOR index is popular with mortgage lenders that sell their loans to European investors.

Adjustable Rate Mortgage Safety Features

There are safety features available to homeowners that choose this riskier variety of mortgage loan. These features are known as “caps” and limit how much the lender can raise your interest rate or payment amount during any adjustment period. It is important to structure the caps on your loan properly; homeowners who neglect choosing both periodic and payment caps can experience negative amortization with their loans. Mortgage loans that are negatively amortized actually grow over time.

Adjustable Rate Mortgage Benefits

Depending on the economy and the going interest rate, the introductory offer of your Adjustable Rate Mortgage could save you a lot of money. This introductory rate, often called a “teaser rate” is usually much lower than fixed rate loans. It is important to understand that this introductory rate is not your contract rate; at the end of the introductory period the lender will adjust the loan and your payment will go up.

You can learn more about the risks of mortgage refinancing with an adjustable rate loan by registering for a free mortgage tutorial.

A Biweekly Mortgage Payment Calculator will make you think twice about how you pay your mortgage.

If you own a home and are currently paying off a mortgage, there are a few shocking facts that you should be aware of.

In the first place, by the time you've paid your mortgage off you will have paid roughly 3 times the amount of the loan itself. Furthermore, assuming you had a 30 year mortgage it will take a full 23 years to pay only half of your loan! An appalling reality to say the least!

Now that raises the question - is there a way to rectify the matter? Some people look to refinancing to resolve the matter.

But although refinancing might mean a lower interest rate the fact remains that you'll still have to pay interest that far exceeds the amount of the loan. And in addition you'll be burdened with closing costs and the inevitable paperwork. But there's a better alternative.

A biweekly mortgage payment plan will cut your interest paid in terms of not only hundreds or thousands - but TENS of thousands - of dollars!

The actual amount you will save is dependent on your remaining balance, term, and the current interest rate on your loan. But a biweekly mortgage payment calculator will instantly reveal the figures as well as a amortization table that contrasts your existing method of payment to a biweekly plan.

In case you've never heard of "biweekly mortgage payments", a bi weekly payment plan doesn't require changing lenders nor does it change how much you pay per month. To stat it in simple terms, it's just an alternative WAY to make payments on your mortgage loan.

Instead of paying once a month, you cut the payment amount in half and pay every two weeks.

Just by using a biweekly mortgage payment calculator you'll come to realize the enormous advantage of this method, concerning the amount of interest paid and the number of years it will take to repay your loan.

Another import issue is convenience!

Instead of having to watch your budget and come up with one big payment on a monthly basis, you will pay every two weeks but make only 1/2 a payment. And because most people get a paycheck every 1 - 2 weeks, the payment schedule can be set up to coincide with payday, making it easier to budget your finances.

If you want to know just how much YOU can save by going to a biweekly payment plan, you can find out in just a few seconds.

Locate a Biweekly Mortgage Payment Calculator and get your answer instantly!

FHA was created in 1934 to give homebuyers a shot at owning an affordable home. Per The Department of Housing and Urban Development more than 34 million families have been helped by the FHA programs over the years. With it’s stated goal to allow families access to affordable housing. However, recent run-ups in home prices many families have been locked out of the process as FHA loan limits are far below median home prices in far too many areas. This means FHA cannot help those borrowers to get into a median priced home. Over the years, FHA has been able to implement programs that have stood the test of time. The areas of borrower counseling, budgeting, credit direction have all been a firm foundation for providing mortgage loans. The insurance aspect of the mortgage can help offset defaults and/or foreclosures. It is a program that has worked in the past and is sorely needed now. With FHA insuring mortgage loans there is little risk to lenders losing money in case of default. Thus more money to lend.

Now with subprime under extreme pressure and many lenders in this product area have shut their doors and simply gone out of business. With heavy foreclosures the secondary market buyers have turned a cold shoulder to any new loans with high-risk parameters. Fannie Mae and Freddie Mac have been reeled in to further limit high-risk loans in their portfolios. Any volatility in their respective combined 1.3 trillion portfolios would cause tremendous financial fallout in the other financial markets. Federal Reserve Chairman Bernanke is urging more conservative lending and to maintain a little steadier course steering out of the big risk waves which could bring harm to all US markets and beyond.

What tends to quickly glaze the eyes of lenders and mortgage brokers combined with frequent head slaps to the forehead are the incredible required levels of company qualification and compliance just for the privilege of doing any FHA business. This is very expensive to stake out this privilege. If FHA would chose to streamline broker participation and high compliance costs, more loans would be originated. Thus, when subprime mortgages became very attractive to lenders and brokers who were trying to assist borrowers to get into their homes of choice, that’s just what they did. These programs were provided instead of FHA. As it turns out, many of these loans had low rates going in, but would accelerate in say two years with many payments wrecking havoc with family budgets. Some of these were 2/28 ARMs which gave borrower a two-year fixed rate then moving to an adjustable. As rate increases were pegged to things like the 6 month LIBOR (London Interbank Offered Rate) plus a margin that may be in the 6% to 7%+ range it guaranteed the loan payments would accelerate dramatically after two years.

As an example: The start rate could be in the 7.50% range for the first two years. With a LIBOR index, as an example at 4.75% and the margin at 7.00% = 11.75%. It might take two years to get there after the adjustment period but going up 1% every six months could dramatically effect the monthly payment. If the mortgage were $200,000 with a start rate of 7.50% on a thirty-year term the start payments would then be $1,398.43/month. At the fully index rate of 11.75% the payment would move to $2,018.82/month. This is a payment increase of $620.39/month. For some borrowers, that is way more than they would be able to handle. Complicating this further, to avoid Private Mortgage Insurance (PMI) for any loan above 80% Loan To Value (LTV), simultaneously closed second mortgages were placed with many of those rates running from 10% to 13% which would allow for a Combined Loan To Value (CLTV) of 100%. Any first time homebuyer purchase can trigger expenditures for landscaping, furniture, and decorating upgrades then the payment increases come along and borrowers become shadowed by the eight ball.

Alphonso Jackson, HUD Secretary, proposed in June of 2006 certain changes that would once again position FHA as the first choice of first time homebuyers, which could bring them reasonable certainty of a monthly housing expense. With the mid-term elections things were put aside for other issues such as the war, minimum wage other items closer to the front burner. As things settle in industry proponents are hoping Congress will once again take a look at Secretary Jackson’s proposal. Originally, there was a bipartisan support. It is thought that still is the case. In brief, loan limits in high cost areas would be closer to the Fannie Mae and Freddie Mac upper loan limits. Right now, the upper limit is $417,000.00. As reported FHA Release 06-069 this might be 87% to 100% of that limit. Presently, FHA in some cases are $200,000.00 away from that limit and as a result, homebuyers are closed out of those communities from even considering an FHA loan with all that brings with it. In lower cost areas, the FHA limit might be in the 48% to 65% of the GSE (‘Government Sponsored Entity’-Fannie Mae-Freddie Mac) upper loan limits. This would be a big boost to making the program attractive to homebuyers. This proposal has been called “The Expanding American Homeownership Act” and has been laid out in H.R. 5121, representing the House of Representatives version. It was introduced April 6, 2006 and received bipartisan support with at the time 67 cosponsors and was approved by the House Financial Services Committee.

Additional provisions of the bill would be the elimination of the currently required minimum 3% investment. Alternative mortgage products are offering more attractive down payment requirements. The new proposed rules would allow for a variety of down payment options making FHA a little more user friendly. Another element of the H.R. 5121 proposed bill would be matching risk with various mortgage insurance premiums. Currently, the mortgage amount has 1.50% added on top for the Up Front Mortgage Insurance Premium or UFMIP. On a loan of $200,000 that would add $200,000.00 x 1.5% = $3,000.00. Then the new loan would be $203,000.00. A monthly MIP or Monthly Insurance Premium of .5% is added into the payment. The UFMIP and MIP all would go into a risk insurance pool to pay for defaults. The monthly MIP would be $203,000 x .5% = $1,015.00/12 = $84.58/month to the payment. If the home is sold or other non-FHA financing is put in its place within the first 84 months a portion of the UFMIP would be refunded to the borrower based on a published sliding scale. The $3,000 added UFMIP would add approximately $17.99/month on a 6.00% mortgage. In spite of these add-ons this FHA program can be far superior to any adjustable rate subprime loan.

In summary, if Congress could get back on track to finalize the proposed HUD changes, which had bipartisan support before the mid-term elections, many positive benefits could accrue to borrowers. These would be lower and predictable interest rates, higher lower limits, lower down payments with the FHA program layered over the whole mortgage product to ensure better borrower performance. Loan counseling, family budgeting, and close interaction can all help home buyers achieve their housing dreams and avoid problems down the road. If this bill was enacted it could go a long way to alleviate the down and negative pressures on subprime loans and riskier loans in the Fannie Mae and Freddie Mac portfolios. Homebuyers could use the steady hand of FHA to make their homeownership a reality. FHA has been priced out of many markets. Now FHA is needed more than ever. Homebuyers would welcome action on FHA.

Lately, whenever I pickup a newspaper or magazine or watch a TV news show, there is a story regarding the implosion of the “sub-prime” mortgage market. According to the media, the rate of mortgage delinquency is exploding…people are being forced from their homes. And, all of this is caused by so-called predatory lending.

Well, I guess I would like to know how true that really is. How many of the countless people who had interest-only mortgages, which have now become fixed at higher interest rates, actually face foreclosure. Is it one in a hundred or one in a thousand or one in a million? The full statistics are not given by the news sources.

And, who is a sub-prime borrower? Is it someone who has been taken advantage by the lender? Or is it someone who has been given an opportunity to purchase his/her own home but who wouldn’t have been able to do so otherwise? Even if 10% of the borrowers who are classified as sub-prime actually default, does that mean the other 90% were given an opportunity that they would not have otherwise had?

The press shows examples of a person who is likely to lose his/her home; and, yes, it is devastating. The reader/viewer cannot help but feel sorry for that person. But how about the countless people who have taken advantage of the opportunity and have found a way to continue to make the required payments. They may continue to struggle, but history has proven if they can hold onto their homes for about five years, they will have accumulated equity.

It would be a travesty if our politicians and government regulators begin to outlaw the very policies that have allowed so many economically disadvantaged people to participate in home ownership. If the lenders have dealt with the borrowers honestly in stating the terms of the loan, then why is it predatory? Before signing the documents, every borrower has the ability to see an attorney.

What we, as a society, should not do is begin to dictate who should be able to borrow money. Just because the borrower happens not to be from the middle class does not mean that he/she is incapable of deciding whether something is advantageous. The government’s role should be to make sure that there are no dishonest practices by the lender, but not whether the lender should make the loan. Disclosure is the important fact.

Everyone deserves to be treated equally in the market place, even the poor or the first-time buyer. The best way for most people to accumulate wealth is home ownership. Let’s not preclude someone from having the opportunity to own a home. Just because the loan is “sub-prime,” the borrower may well not be.

Since mortgage points can save you a lot of money, it is important for you to understand what they are and how they work. The interest rate defines the amount of your monthly payments and thus, your monthly installments could be defined using 1% of your mortgage loan amount as a factor. That is exactly what a mortgage point is: the unit that describes how expensive or inexpensive the costs of a mortgage loan are and any variations are also computed in mortgage points.

Different Mortgage Points

The interest rate charged for the loan can be minced into smaller portions and the reason for the raise or the reduction can be identified. Thus, whenever a variable reduces the interest rate by one point, we say it reduces the risk involved in the transaction. On the other hand, whenever a variable raises the interest rate by one point, it is said to be the reason for origination of risk.

For instance, certain points can be purchased. This actually implies a down payment on your loan that obviously reduces the interest rate you’ll end up paying for your mortgage loan. These points are therefore discount points and the cost of them will vary according to the loan amount you have required when you applied for the loan. A Mortgage point is equal to 1% of the loan amount.

Flexibility and Limits

There’s a lot of flexibility when it comes to mortgage points. You can obtain mortgage discount points by paying in advance the equivalent to 1% of the total amount of the loan. Origination points are charged for administrative costs, closing fees and different fees and costs charged by the lender for a particular loan.

However, there are limits that cannot be bypassed. Your interest rate cannot be reduced or increased beyond reasonable boundaries. The limit depends on the type of loan and lender but on common mortgage loans it usually reaches around four points. Each mortgage point can be divided into fractions and usually does as many variables only reduce or increase the interest rate half a point or a quarter of a point. Thus, you can purchase half a mortgage point too to obtain an interest rate reduction.

Acquiring Discount Points

The benefits of acquiring discount points are variable and depend mainly on the length of the repayment program and your plans as regards to the property. If you plan to retain ownership of the property for many years, then, getting discount points is a smart idea because you can spread the payments over the whole life of the loan and get low monthly installments you’ll be able to afford without sacrifices while you enjoy the property.

Since mortgage points can save you a lot of money, it is important for you to understand what they are and how they work. The interest rate defines the amount of your monthly payments and thus, your monthly installments could be defined using 1% of your mortgage loan amount as a factor. That is exactly what a mortgage point is: the unit that describes how expensive or inexpensive the costs of a mortgage loan are and any variations are also computed in mortgage points.

Different Mortgage Points

The interest rate charged for the loan can be minced into smaller portions and the reason for the raise or the reduction can be identified. Thus, whenever a variable reduces the interest rate by one point, we say it reduces the risk involved in the transaction. On the other hand, whenever a variable raises the interest rate by one point, it is said to be the reason for origination of risk.

For instance, certain points can be purchased. This actually implies a down payment on your loan that obviously reduces the interest rate you’ll end up paying for your mortgage loan. These points are therefore discount points and the cost of them will vary according to the loan amount you have required when you applied for the loan. A Mortgage point is equal to 1% of the loan amount.

Flexibility and Limits

There’s a lot of flexibility when it comes to mortgage points. You can obtain mortgage discount points by paying in advance the equivalent to 1% of the total amount of the loan. Origination points are charged for administrative costs, closing fees and different fees and costs charged by the lender for a particular loan.

However, there are limits that cannot be bypassed. Your interest rate cannot be reduced or increased beyond reasonable boundaries. The limit depends on the type of loan and lender but on common mortgage loans it usually reaches around four points. Each mortgage point can be divided into fractions and usually does as many variables only reduce or increase the interest rate half a point or a quarter of a point. Thus, you can purchase half a mortgage point too to obtain an interest rate reduction.

Acquiring Discount Points

The benefits of acquiring discount points are variable and depend mainly on the length of the repayment program and your plans as regards to the property. If you plan to retain ownership of the property for many years, then, getting discount points is a smart idea because you can spread the payments over the whole life of the loan and get low monthly installments you’ll be able to afford without sacrifices while you enjoy the property.

If one day you find out, that once low interest rates, set on your loan or mortgage, has raised dramatically up to a level where you are almost unable for making payments and thus turned your loan into a serious burden, the need of refinancing may pop up into your mind. Maybe you’re short of finances and reducing your monthly payments will greatly help you to save money further applying it in paying down other outstanding debts, the mentioned refinancing system will be an ideal solution to your problems as well. In a word loan - mortgage refinancing is deemed to make your future uncertain financial conditions much more stable.

The main idea of mortgage refinancing reveals in applying for a new loan intended to replace current one secured with the same assets. Ways of refinancing existing mortgages differ depending on the particular interests of the consumers and the aims they’d like to accomplish due to refinancing. Reducing interest rates and periodical payments maybe achieved by two means-either by extending the repayment period, or by changing the existing loan with the loan having lower interest rates. If you’re interested in getting rid of the loan as soon as possible, you may apply for a shorter termed loan-10 years instead 0f 20, for instance, and on the contrary, you may spread the period of covering your debt over a longer period of time, thus deduct monthly payments and make some additional investments.

Mortgage and other loan refinancing also serves to the aim of reducing risks. While arranging for a mortgage, you are offered to choose either adjustable-rate mortgage or fixed-rate mortgage. Adjustable rate mortgages attract most of consumers for having a lower initial rate than that of fixed rate mortgages. If you intend to sell your house in the near future and the adjustable rate will remain lower then the fixed one for this period of time, be sure adjustable rate mortgage best meets your needs. But if the chances of leaving your home are little, you’ll feel comfortable choosing the fixed rate mortgage, as the stableness of adjustable rate mortgages depends on different variables and thus you never know, how often and how much the rates will zoom up and down, the fixed rate mortgages seem to be much more reliable-the risk of increasing rates dramatically is removed and the rates remain their steadiness notwithstanding the future circumstances.

Refinancing also provides possibility of replacing non-tax deductible debts by tax deductible ones; if having more than one mortgage, combining them into a new mortgage and thus achieving debt-consolidation, Cash-out refinance gives you a possibility to utilize the difference in refinanced mortgage and the current one, by letting you borrow a loan larger in amounts than you existing mortgages is.

After all you may consider refinancing as the most advantageous outlets for your financial problems, connected with mortgages, but it certainly has its own shortcomings. Before deciding to refinance or not, you should discuss every detail thoroughly, every possible benefit that can be accrued from it and every expenditure connected with its applying. Some types of loans impose penalties in case of covering debt before the prescribed terms, undertaking a mortgage is often connected with transaction fees, several refinanced mortgages may lead an owner to undertaking more risks, than current mortgage, some mortgage fees may even exceed the fees of an existing mortgage fees in the end although having lower interest rates. So, in order to avoid negative consequences, think twice before deciding which type of mortgage refinance to choose, asses all the estimated benefits and only after all considerations are made, get down to busyness.

A mortgage broker is aN agent who acts as an intermediary between a prospective borrower and the lending institutions they represent sent.

They normally represent not just one but several lenders as they intend to provide the borrowers with many products. The more products open to the borrower the more likely he will find a product tailored for him. At times, the number of lenders they represent may go into the hundreds and hence, more likely to find a have a product in place to satisfy the borrowers taste. This increases their ability to locate a loan customized for you. This is a great benefit

Another benefit of a mortgage broker is that they serve those with both good and bad credit. They are interested in getting all business that come their way and hence are prepared to service those with damaged credit. This is of great benefit as those with damaged credits tend to be shunned by traditional lenders.

Because a mortgage broker has loads of lenders he represents, you most certain of getting the best credit terms available. If you were to deal with a lender, you will have to do with the best credit terms their institution provides. On the other hand, if you deal with a mortgage broker, you receive the best credit terms from hundreds of institutions.

Also mortgage brokers take their clients super-seriously even ready to visit them in their homes. They, unlike the mortgage lenders and banks have to scout harder for business and hence will do go to any length to please the clients. This can have huge benefits for a satisfied client will bring in referrals. A satisfied client is perhaps the cheapest form of advertising available.

From the above, it is obvious that the fees charged by a mortgage broker are easily offset by the savings received if one had decided to approach a mortgage lender instead

However, before choosing a mortgage broker, scout for a good one. Make enquiries from friends and family and workmates. Search the internet. There are some greedy ones out there. And do not pay more than one and a half percent as fees. Anything higher is predatory.

It can be difficult to determine when you should refinance your home loan. There are many factors that might have a bearing on this decision. Depending on what factors affect you, now could be the best time to refinance, or it might be better to wait.

Economic conditions are the chief factor in determining the prevailing interest rate. The government often uses higher interest rates to level inflation out, and to direct consumer spending. When consumers are spending more than they should, prices will rise. Interest rates grow correspondingly higher, and then spending slows down once more. Conversely, a slower economy favors low interest rates to encourage consumers to resume spending. The best time to refinance a home loan is when the economy is slower, with correspondingly low interest rates.

Despite your existing loan and intention to refinance, a good credit rating is still required to obtain the lowest possible interest rate. How good a deal you can acquire will depend heavily on your credit score. It is best to get your credit report from one of the three major credit rate reporting bureaus before you apply for your refinancing. This allows you to see if there are any errors in this report, have them corrected, and get an accurate idea of your credit score.

The length of time you have had your loan will be important to your lender. It is considered a poor idea to refinance shortly after getting your initial loan. Lenders prefer that you wait at least four to seven years before you consider refinancing your mortgage.

When the market value of housing increases, it can be an excellent time to refinance your mortgage. This is especially true if you are planning to consolidate debt or use some of your home equity. If you have improved your income or increased your credit score, refinancing can allow you to secure a much lower interest rate. Refinancing can also allow you to renegotiate the terms of your home loan.

When refinancing your home loan, be sure to make certain the prevailing interest rate is lower than 2% of your current payments. Calculate the costs of refinancing carefully, remembering to add in any penalties or charges that may be accrued in the process. It is important to shop for the best deal when refinancing your home loan, making certain to compare the interest rates, terms, and conditions of the offer before accepting a particular refinancing plan.

Finding the money you need to make those home improvements can lead to having to make some serious decisions. If you really want to make those home improvements, then you have basically two choices - either refinance a first mortgage, or get a second mortgage in order to get access to some of that equity.

While either choice could give you access to some cash for your project, only one choice will actually be better for you - depending on your circumstances. Here is what you need to know to make that decision.

You can get access to your cash by refinancing your first mortgage. If you find that you can get some better terms than what you already have, then this may be the way to go. Look for a lower interest rate that is about 1% or more lower than what you already have for a good deal.

Mortgage Insurance?

One thing that could help you decide would be if you are paying Private Mortgage Insurance, and now have more than 20% of the house's value in equity. By refinancing, you could get access to your equity with a cash out mortgage, and drop your PMI at the same time. In order to drop the PMI, though, be sure that you do not refinance for more than 80% of the attained value of your home. This means that you need to leave 20% of your equity intact.

Get the security of fixed rates

Another possible reason to refinance might be to get away from an adjustable rate mortgage - if you have one. Many people are now seeing the danger of these mortgages. They are great when the financial times are good, but horrible enough to cost you your home when economic times go a little sour. By refinancing your first mortgage, and using your equity for your home improvement project, you can gain the financial stability you need.

Refinancing with either a first or a second mortgage could be not worth your time, though, if you are not planning on staying there very long. The costs of refinancing are significant, and will take the average person at least three to five years to start to see a positive return on their investment.

Options of Second Mortgage

A second mortgage will give you two options - either a home equity loan or a home equity line of credit (HELOC). Both of these will give you higher interest rates than on a first mortgage, and a second payment. Besides that, there are the same costs involved for the financing.

As a second mortgage, either one gives you the cash you need to beautify your home. Home improvements or repairs are tax deductible which means your actual rates are brought down some by the deduction. A HELOC will give you a greater flexibility since you draw out the money as needed (for a limited time), and only pay interest on the amount you use. So, if you are not sure you need the full amount of your equity, this method will save you some money, but be careful and be sure you understand how it will be amortized - and when.

Get the best mortgage deal

Refinancing or getting a second mortgage is a very common method of getting cash to fix up the home place. It also builds up the value in your home even more. Anytime you are thinking about either option, be sure to shop around getting several quotes, and then do a careful comparison of the fees (especially), as well as the interest rates.

The bottom line is that it depends on your own goals and financial situation as to which option may be better for you, but comparisons of quotes will let you know which option will best help you meet that goal.

If you have begun to feel financial problems caused by debt, and you own a home, then you may have a good way to eliminate those debt problems. A remortgage could be just what you need to provide a way out and reduce your monthly bills at the same time. Here is how you can go about getting a remortgage for debt consolidation.

Before you think about remortgaging, though, you need to think about whether or not you plan on living there for at least seven more years. Remortgaging has fees and costs just like your first mortgage, and will take up to three years to pay off these costs.

Check Your Credit Rating

You should know that the best time to think about a remortgage is before your debts start being reflected on your credit score. You can get a free credit report from the three major credit bureaus each year. Once you get it, you can look it over and make sure that all statements it contains are accurate and up to date. Be sure to correct all incorrect information through the credit bureau before you apply for a remortgage. This is because your new interest rate will largely be based on your credit score.

Watch The Interest Rates

This will help you to know when the right time comes to remortgage. You want to wait until you can get at least 1% lower than your present interest rate. If it is close, but you feel the market may not go any lower, you may be able to buy points for an even lower rate.

Remortgage For A Shorter Term if Possible

Even if you are doing this for the purpose of debt consolidation, you will want to try and keep the length of the remortgage as short as possible. The shorter the time period, the less you will need to pay in the long run. This will reduce your overall indebtedness through the years and allow you to be mortgage free quicker. In fact, if you can, try to reduce it about 5 years less than the remaining time on your present mortgage. This will enable you to save possibly tens of thousands of dollars in interest.

Get Access To Your Equity

If you have lived in your house for a number of years, then you have built up some equity. This can be obtained when you remortgage. Although you could get much more, you should not remortgage for more than 80% of the value of your house, or you will be required to get Private Mortgage Insurance (PMI).

You can do what you want with your equity. This is the money that you take and consolidate your bills with. It has much lower interest than a personal loan, which is why it is a good alternative. It also has a much lower interest rate than a credit card, too, and gives you a long time to pay it back.

Put Some Equity Back Into Your House

It is also a good idea to take some of your equity and add it back into your home by remodeling or making an addition. This increases the equity in your home even more - and it is tax deductible, too.

Before you sign on any remortgage deal, be sure to get several quotes. Then look them over carefully, and choose the best one. Make sure you understand any terms, and avoid remortgages with early payoff penalties.