2009.10.09 19:27:33

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A lower interest rate on your mortgage can be an attractive inducement to refinance, however, two other factors should be weighed against that lower rate:

     A. If you refinance into a new loan that has a longer term that what’s left on your current loan, you’ll have to make those lower payments for a longer period of time and that could add up to more interest paid over the life of your new loan. For example, if you took out a 30-year fixed mortgage and made the payments for, say 10 years and then you took out a new 30-year loan, you’d have extended the payments for another 10 years until the new loan is paid off. This consideration is one reason why some homeowners refinance with a new 15-year fixed mortgage instead of a new 30-year fixed mortgage.

    B. On the other hand, if you want to lower your monthly payment due to a change in your income other financial setback, refinance to extend the term of your loan can be a good way to achieve that goal.2. Closing costs

The costs of a new loan typically include loan origination fees, discount points, appraisal fee, settlement services charges and a new lender’s title insurance policy. You may be able to finance these costs info your new loan or obtain a discount in exchange for a higher interest rate, but either way, you should consider the total outlay to refinance. If you plan to own your home for more than a few years, your monthly savings will help your recoup the costs. If you’re planning to more within a short period of time, the upfront costs may outweigh the benefit of the monthly savings you obtain by refinancing.

Home prices have declined in most areas and appraisers generally have become more conservative about home valuations. That means some homeowners may not have enough equity to refinance. One the plus side, the federal government’s Making Home Affordable program now allows qualified homeowners to refinance even if they owe more on their mortgage than their home is worth. The loan-to-value (LTV) ratio on a Home Affordable Refinance loan can be as high as 125 percent. More information can be found at www.firstchoicemortgagecollc.com/colorado-loan-programs/colorado-home-affordable.html

First Choice Mortgage Company’s is committed to be a information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations