Most loan officers will welcome a call or a visit that involves an inquiry about bank finance. The best of them are as adept as car salesmen when it comes to making it sound easy. Owe money on the car you’re trading in? One phone call and a five minute backroom consultation later, and the debt on your old car is rolled into the loan on your new one.
The same is true of bank refinancing. If you approach a bank about refinancing your mortgage to obtain a better interest rate and mention your $15,000 in credit card debt, it might take hours instead of minutes but the bank officer will be back at you with a mortgage that packages your old home loan and your credit card debt into one new mortgage at a low low rate, available this week only so lock in now.
It might well be a good deal. Presumably the new interest rate will be lower than the older one. However there are two questions to ask in this bank refinance scenario. The first is, “What is the APR?” That stands for ‘annual percentage rate’ and it is the cost of interest with the cost of the loan amortized into it. That’s going to be a different figure than the interest rate, because closing costs on a primary mortgage can range from 3% to 6% of the entire loan. The second question is, “How much does the credit card debt raise the interest rate on my bank refinance?”
It takes very little increase in a thirty year mortgage rate to offset the interest reduction in a much smaller amount – such as the aforementioned $15,000 in credit card debt. As little as a quarter point in interest could offset a six point reduction in interest on that debt, from the thirteen percent on the credit cards to the seven percent on your mortgage. That’s because the quarter point increase is being paid on a few hundred thousand dollars over thirty years, not just on the additional $15,000 you’ve thrown into the pot.
Adjustable Rate Mortgages Carry Substantial Risk
There are some exotic adjustable rate mortgage loans (ARMs) available these days that are capable of jumping fifty to eighty percent when the day comes for adjustment. Interest only adjustable mortgage rates can be frightening when they are...
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Adjustable Rate Mortgages-Can I Control The Cost?
When adjustable rate mortgages (ARMs) were first introduced, the entire notion had great shock value for the naturally conservative banking industry. Who would want a thirty year loan with interest rates that couldn’t be predicted for twenty nine of
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Banks And The Mortgage Frenzy
Now that the feeding frenzy in the housing market seems to have abated, the financial institutions that made it all possible are looking around and wondering what they hath wrought. Interest only home loans made it possible for millions of home...
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Better To Cut Mortgage Or Invest In Funds?
Invest the money: Take the $500 and put it in the stock market. You can make more money there than you will save in paying down your home loan. This is a golden opportunity to dollar-cost average your way into the market and to build up a tidy...
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Calculate your Refinance Savings for a Lower Rate
Mortgage Lenders Plus has a number of refinance calculators available for different refinance scenarios. It takes a calculator to make side-by-side loan comparisons, and it also often takes a calculator to compute the true cost of a loan.
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Efficient Refinancing: Four Tools You’ll Need
The real estate market remains an enigma to the people who get paid for analyzing it. Clearly the rapid appreciation rate of homes has slowed, in some markets halted altogether, and in a few it’s gone into reverse.
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Home Refinancing Can Create A Bind Down The Road
Americans are getting one more cash advance from their homes. Cash-out home loan refinances this spring hit their highest market-share percentage in 16 years:
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How To Find The Best Subprime Loan
One of the commercial aspects of today’s microeconomics is the division in the financial industry between prime mortgages and subprime mortgage loans. A good part of the reason for these categories is the explosion of credit in this country and the e
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If You Plan To Cut Spending: Refinance & Reduce
There's no question that refinancing your home will reduce your monthly payments and reduce your income taxes. But it may not help your financial situation one bit. In fact, it may cause considerable damage to your long-term financial well-being...
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Investment Refinance is a Game for Financially Savvy Homeowners
A substantial number of homeowners will take out home equity loans or home equity lines of credit (HELOCs) because they can be construed as “cheap money.”
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Its A Buyers Market Lower Home Costs And Lower Interest Rates
For those of you hoping to buy a house, here’s some news that fits in the “small miracles” category. Median home prices in the United States actually dropped in the last year. In August of 2005 that number was $229,000; in August of 2006 it was...
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Land Refinance Can be Critical to the Survival of a Business Venture
Land refinance is a little different than obtaining a new mortgage on a home. Raw land is more difficult to appraise; often there have been no comparable sales in the area that can help to establish relative value.
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Mortgage Settlement Costs Differ From State To State
An annual survey of mortgage closing costs in the fifty states brings up some substantial differences in its 2006 edition. The survey is partial to some extent, because it does not reflect taxes, other government costs or escrow fees.
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Mortgage Shopping? There's No Comparison
The survey shows that the pricing of mortgage fees is a shell game, with different lenders calling the same fees different things. Some lenders charge a slew of separate little fees, and others charge a few bigger...
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Paying Ahead – A Mortgage Boon Or A Deduction Loss?
For most homebuyers, just completing the purchase is a major financial stretch. Especially in the last five years, home buying has meant exotic financing schemes that allow the home buyer to maximize the purchase and minimize the...
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Paying Off A Mortgage Isn’t Always A Good Idea
Homeowners who have held mortgages for many years and are financially sound often consider the option of mortgage payoff. People for whom retirement is near or who are trying to develop a financial strategy for their senior years face this...
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Refinance Fees for a Home Equity Loan Are Similar to Mortgage Fees
Refinance fees depend on what sort of refinancing effort you’re considering.
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Refinance Foreclosures are Result of Default on the Second Loan
For purposes of this article, we are going to assume that “refinance” refers to home equity refinancing in the form of a second mortgage. A home equity loan and a home equity line of credit (HELOC) are both considered second mortgages.
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Refinance Lenders are Busy Turning out Home Equity Loans
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Refinance Rates are Defying the Laws of Finance
Refinance rates can refer to a couple of categories of home refinancing. The first is a complete refinance of the mortgage(s) on the home into a new mortgage.
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Refinance Tax Deductions is what makes Second Mortgages Valuable
When people talk about taxes and home refinancing, generally they are referring to the refinance tax break that may be available if you chose to refinance the equity in your home.
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The Popularity Of Reverse Mortgages
Reverse mortgage loans have become a mainstream financial product over the last several years. Part of the reason for this is that the FHA and HUD are doing their best to develop a framework that protects seniors who want to utilize this tool...
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The Pros And Cons Of A Reverse Mortgage
Any senior over the age of 62 who owns a home can seek out a reverse mortgage loan. These packages provide cash to the homeowner who, presumably, has accumulated a few decades’ worth of equity. The money can be provided as monthly stipends, in....
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What Defines An Adjustable Mortgage Rate
Until a person goes shopping for a home loan, the most he or she usually knows about the business is that there are fixed rate loans and there are adjustable rate mortgage loans (ARMs) that typically start out with a low interest rate which at some..
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When In Debt, Don't Look For Quick Fix
When you sell the rental, you'll pay capital-gains tax on the difference between what you paid for the home (including improvements) and what you net from the sale of the home. Fortunately, federal capital-gains tax rates are at historically low...
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