| If you are interested in paying less money for your | | | | move within nine years so it may not make sense to |
| mortgage, you are probably trying to lower your | | | | pay a higher interest rate for a 30-year fixed-rate |
| mortgage payment. There are a few different ways | | | | mortgage when you are not going to be in the home |
| you can lower your monthly mortgage payment. You | | | | that long. Doing so may be costing you money. |
| can change the term of your mortgage. Since the | | | | Consider refinancing to an ARM instead. You will get a |
| balance of your mortgage is spread out over a longer | | | | lower rate as well as lowering your monthly mortgage. |
| period of time, your payment is lower. | | | | You also have to think about the fact that if you are |
| If you have a thirty year mortgage and one of your | | | | only going to be in your home for a few more years, it |
| financial goals is long-term savings, you may want to | | | | may make sense not to refinance out of your ARM. |
| consider shortening your term to twenty or even | | | | The equity you have in your home can act like a |
| fifteen years. Your payment will be higher, but you will | | | | savings account that you could access through a |
| pay much less in interest over the life of the loan, | | | | home equity loan or a cash-out refinance. |
| saving you thousands of dollars in the long run. In | | | | This is usually done when you want to finance an |
| addition, you can lower your payment by refinancing | | | | important home improvement, pay for college or pay |
| an interest-only loan. | | | | off high-interest credit card debt. Whatever your |
| With an interest-only loan, the minimum amount you | | | | reason, this may be the right option for you. |
| are required to pay is the amount of interest for a | | | | The interest you pay on a credit card is not |
| certain period of time, though you can pay as much | | | | tax-deductible and you pay a higher rate than you |
| principal as you like. One helpful too is the refinance | | | | would on your mortgage. Consequently, credit card |
| calculator that will allow you to see how you could | | | | debt is often referred to as bad debt whereas your |
| lower your monthly mortgage payment. Keep in mind | | | | mortgage is considered good debt. Using your home |
| that it is important to consider what mortgage rates | | | | equity to pay off your high-interest credit card debt |
| are doing. Since mid-2004, the Federal Reserve has | | | | can save you money in the long run. |
| raised interest rates several times and is expected to | | | | Using your home equity, rather than your credit cards, |
| keep raising rates in the near future. | | | | to finance expensive purchases can also be a smart |
| This means that if you have an adjustable rate | | | | move. |
| mortgage, it may adjust to a rate that's higher than a | | | | Deciding on when to refinance your mortgage will |
| fixed-rate mortgage. You should consider refinancing | | | | depend on the circumstances of your situation: how |
| to a fixed-rate loan. Additionally, you need to consider | | | | long you'll be in the home, what your financial goals are, |
| how long you plan on being in your home. Many people | | | | whether interest rates are dropping, and so on. |