Benefits of Refinancing your Mortgage

 

When you refinance a mortgage, you are converting the mortgage you already have into a new loan. The new loan usually has more favorable terms, such as a lower interest rate, that make refinancing worthwhile. Refinancing can have several important benefits, most of which add up to money saved over the life of the loan.

Refinancing helps you save money

 

Most people who refinance do so because the new mortgage will save money, usually because refinancing will allow them to lock in a lower interest rate than the one they currently have. Refinancing can help you save a significant amount of money over the life of the loan, even if the interest rate reduction is small. If you have a mortgage of several hundred thousand dollars, even a small interest rate reduction can save you thousands of dollars in interest. In fact, reducing your interest rate by just one point could save you around $5,000 on a fifteen year mortgage.

Refinancing can save you money in other ways, too, even if you are not able to lock in a lower interest rate. If your current mortgage is sub-prime because your credit rating was poor when you took out the loan, for example, refinancing could save a considerable amount of money if you’ve built up a better credit rating.

Refinancing can reduce the term of your mortgage

 

The potential to save a significant amount of money is the most obvious advantage of refinancing, but there is another important benefit that is often overlooked. This is the ability to refinance to a mortgage with reduced terms. For example, if you are able to refinance from a 30 year to a 20 or even 15 year mortgage, you’ll own your home outright in much less time.

Don’t forget, however, that reducing the terms of your mortgage mean your monthly payments increase. If you’re refinancing for this reason, it is important that you know your finances will remain secure enough that you can continue to meet the higher monthly repayments. The good news is refinancing for this reason is actually another way you can save money on your mortgage. Even though your monthly repayments are higher, reducing the term means you’ll pay significantly less money in interest over the life of the loan.

Refinancing lets you switch mortgage types

 

One of the main reasons many people refinance is to switch to a different mortgage type, for example from an adjustable rate mortgage to a fixed rate mortgage. Taking out an adjustable rate mortgage is an attractive option, especially for first time home buyers, since securing a low interest rate means lower repayments. However, many homeowners later feel that they would prefer the security of a fixed rate mortgage. Refinancing means that it’s possible to switch from an adjustable to a fixed interest rate, or vice versa, to ensure you have the mortgage that most benefits you. When is a good time to switch? It depends on many things, including your current financial situation, the state of the economy, and how long you plan to live in the home.

Refinancing can free up equity in your home

 

As you make mortgage payments over the months and years of the loan, you build up equity in your home. Every payment you make means you own a little bit more of the equity, and sometimes, it can be financially beneficial to tap into that equity. If you want to make improvements to increase the value of your home, fund college for your kids, or consolidate debts, for example, equity release can provide the necessary cash.

 

If you can get a lower interest rate when you are accessing the equity, so much the better – this will help compensate for the fact that removing some of the equity extends the life of the loan.

 

Time to Refinance?

 

Most homeowners will refinance a mortgage at least once, and statistics say that the average homeowner refinances their home every four years. That might seem a little high, but given that refinancing has so many benefits, it’s not difficult to see why refinancing is a popular option.

So when is refinancing a good idea? Look to the above list to determine when is the right time to refinance. If you can benefit by lowering your interest rate, reducing the terms of your mortgage, or switching to a more favorable mortgage type, or if you need to access some of the equity you’ve built up in your home, refinancing could be a good option.

These are not the only points to consider, of course, but they are a good starting point to think about if you are wondering whether refinancing will work for you.

About the Author

Rachel Jackson is a freelance writer who writes about financial products pertaining to the mortgage industry such as the lowest mortgage rates.

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Why Your Real Estate Business Needs a Blog

OK.You've heard about blogs, and you've been told if you want to make an impact on the web for your business one of the best ways to do it is with a blog.But you have no idea what a blog is, or how it is supposed to help you.

So in this series of articles I'm going to tell you all about blogs.What a blog is.How to set one up.What to write about.How to get more readers, and how to get your blog noticed by the search engines like google.

For starters let's just put it this way.Creating a blog gives you a chance to put your story out there in front of a lot of people.Your blog gives you a chance to develop an online personality and it gives you a vehicle for interacting with your readers and staying in touch with them on a day by day basis.

So the first thing you should try to do with your blog is to let your personality shine through.Don't be overly concerned with writing award winning articles.Write about stuff that your readers will find interesting and relevant.And go out of your way to put some of your own personality into your blog posts.If you can do that you'll be well on your way to creating a successful blog.

Before you can get your blog up and running you have some decisions to make.You will have to decide where your blog is going to be hosted, what software platform you are going to use, what your blog will look like, and several other things.We cover all these things in other articles and videos in this series, and you can find a link to the entire series in the resource box at the end of the article.

But for now, the biggest decision you have to make is the theme or topic of your blog.If you are a real estate agent and want to use your blog to promote your real estate business, the theme has more or less already been chosen for you.To attract readers and generate prospects you should be focusing on providing information about your local real estate market, interesting features of your community, and topics of general interest to home owners, home sellers, and home buyers.

You may already have a pretty good idea what kind of things you should write about in your blog.If not, just ask yourself, "What kind of information would my real estate clients and prospects be interested in reading about in my blog?"

Finding interesting material to write about is not always easy.

Writing may be difficult for you, and you may find coming up with ideas a real challenge.But not to worry.There are short cuts for creating blog content, and here is one of them.

This is what I call the "blog skimming" technique.Use Google to find two or three other blogs in your niche that you find interesting.When you see something you like in one of those blogs, just create a post that contains a very short summary linking back to the original post, along with one or two original comments that reflect your own point of view.

But be careful when you do this.Don't just copy the original post as though it is yours.Make sure to give full credit to the original writer, and try your best to add a bit of original comment that makes the post your own.

While most bloggers make many references to other stories or resources they find on the web, a good blog is not just a rehash of items published in other places.Normally your blog posts will be a reflection of your own point of view - your take on the events.So your posts should contain commentary, criticism and your own personal insights.

This is a really important aspect of blogging.Express your own opinions and point of view and you are much more likely to get readers interacting with what you write.The more you do this, the better you will get at it.

As you know, building and expanding your business is about building relationships with customers and prospects.That's why a blog is so much more powerful than an ordinary static website.It not only lets you demonstrate how your business is unique, but it also shows you are interested in the people you do business with by inviting them to share their own opinions.

About the Author

Rick Hendershot specializes in online marketing for real estate agents.

For more free articles and videos about blogging see Real Estate Blogs or visit his blog called Local Web marketing.

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