A 15 year mortgage has a better rate than a 30 year mortgage offered the same day ? usually by a quarter of a percent. However, even if rates are the same as your current mortgage, refinancing to a shorter mortgage can save you thousands in interest by paying off the principal sooner. Your monthly payments will be slightly larger, but that is because a larger portion of the balance is being paid.
Offers Self-Discipline
Short term loans make your decision to pay off your mortgage official. For those that have a hard time making extra payments on their mortgage, a short term mortgage may be the answer.
It is helpful to first look at your long term financial goals. Perhaps you are planning to pay for kids? college tuition, to retire, or to reduce your debt load in the future. Decide when you want your mortgage paid off and look at the monthly payments. You can choose a number of periods ? 15, 20 or 25 year home loans.
Factors To Consider
Low rates aren't the only factor to consider when deciding to refinance, the payment period is also important. By simply making larger principal payments, you get rid of your loan sooner and save money on interest payments. Additionally, reducing your debt level by paying off your mortgage also improves your credit and financial situation.
However, you should also remember the immediate impact of a short term mortgage. A larger monthly payment can put a strain on your monthly budget. You may also find that if you plan to sell your home within a couple of years, you will not recoup the cost of refinancing fees.
You are also limiting your financial flexibility. You are committing yourself to a larger principal payment. You could choose to simply pay down the principal when you have the available cash.
In the end, short term mortgages do have their benefits and should be considered when you plan to refinance.
There are such things as bad credit mortgages and they're approved for people who have bad credit. Known also as a subprime mortgage, the biggest problem with this type of mortgage is that it typically carries a high rate of interest. If you're interested in pursuing this mortgage option, go online and find a Florida mortgage company that offers this type of product. Once you find a few, simply request from each an online mortgage quote and go from there.
If you're not satisfied with the bad credit mortgage terms you're offered, you have other options. Probably your best option is to start doing something about your bad credit. Believe it or not, after just a year or two of handling credit responsibly, you could qualify for mortgage rates that are reserved for those with the exceptional credit!
Start planning for that mortgage or refinance
After filing for bankruptcy, you might be tempted to adopt a ?cash only? policy meaning that the only purchases you'll make are those you can pay for with cash. That's admirable, but it'll do nothing to help rebuild your credit so you can get a more favorable mortgage or mortgage refinance rate.
What you need to do is apply for one or two credit cards, and then charge very small amounts each month for 12 ? 24 months. You might have to apply for a secured credit card, but that's okay. When the bills come in, make sure you pay them off in full each month and definitely make sure the payments are received before the due date. Such action shows a history of responsibly managing credit.
Next, pull copies of your credit reports from the three major credit reporting bureaus. Carefully review each and if discrepancies are noted, immediately find out the process for correcting all discrepancies. Doing so will improve your FICO score which is the score lenders use to help determine your creditworthiness and your mortgage rates.
While you're working to improve your credit, you should also be working full-time. But this is not the time to job-hop! When you apply for a mortgage or a mortgage refinance, lenders will see that you've got a steady and reliable source of income. Combine your steady employment with proof that you can handle credit responsibly and a down payment and mortgage lenders will be clamoring for your business!
When you're reviewing your mortgage and mortgage refinance options, be realistic about how much house you can afford. Remember that closing is one thing, but making the monthly payments and being able to cover the costs associated with home ownership are what matters most. You certainly don't want to end up back in bankruptcy court!
If you're interested in learning more about your mortgage and mortgage refinance after bankruptcy options, click here to contact a Florida mortgage specialist who can help.
Both Carrie Reeder & Melvin List are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Carrie Reeder has sinced written about articles on various topics from Finances, Mortgage and Finances. View our recommended mortgage lenders.Carrie Reeder is the owner of. Carrie Reeder's top article generates over 135000 views. to your Favourites.
Melvin List has sinced written about articles on various topics from Home Loan Mortgage, Flirting Tips and Mortgage. Melvin is the President of Affordable Home Equity Loans, Inc. in Tampa, FL.. Melvin List's top article generates over 1600 views. to your Favourites.