When is a Good Time to Refinance your Salt Lake City Home (1)

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When is a Good Time to Refinance your Salt Lake
City Home
By - https//graystonemortgage.com/
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• Refinancing a mortgage is a significant move
  that can lead to significant savings. But the
  strategy may also backfire, leaving you in a
  worse position than you were in before--and with
  less cash in the bank. So how do you know whether
  you should refinance your Salt Lake City home?
• The brief answer is that refinancing makes
  sense if you will wind up saving money and not
  cause any new problems. But there are more
  concerns at stake, too, including risk management
  in addition to your other financial objectives.

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Save Money

• You could save a whole lot of cash with a
  refinance, and that is generally the best reason
  to get one. Specifically, it may help you spend
  less in interest over the life of your loan.
• To ascertain whether you'll spend less, you
  will want to run the numbers. It's not especially
  tough to calculate the potential savings.

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Reduce Your Payments

• Occasionally refinancing can net you a lower
  monthly payment. If you are having cash flow
  problems, a lower monthly mortgage bill for your
  Salt Lake City home can seem very attractive. A
  lower rate of interest or a longer duration could
  drop your monthly payment by hundreds of dollars.
• While it could be great to pay less every
  month, be sure to look at the big picture. If
  lower monthly payments are offset by increased
  interest expenses, you are not coming out ahead.

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Lower Your Risk

• Sometimes, refinancing may be a great idea
  even if you don't get a lower rate or a
  shorter-term loan. Getting out of an ARM is 1
  example. If you are worried about a significant
  interest rate increase in the long run,
  refinancing with an ARM to a fixed-rate mortgage
  reduces that risk. Even though your monthly
  payment may increase, you know the speed never
  will.

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Cash Out Your Equity

• Some Salt Lake City homeowners refinance to
  cash out the equity in their homes to pay for
  education, home improvements, or a new company.?
  Although those are commendable applications, a
  cash-out refinance could be insecure if your new
  business fails, your home improvements do not
  increase the value of your Salt Lake City home,
  or in the event you can not keep up with tuition
  payments. In each of these scenarios, you have
  put your house on the line make sure that you
  can keep up with your new payment plan.

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Consolidate or Alter Your Debts

• You may also take money out to combine
  high-interest-rate debts. In case you've got a
  solid plan to get rid of poisonous debts, this
  strategy could work, especially since home loan
  rates are generally much lower than credit card
  interest rates.8? But if the strategy fails,
  remember that you may face the danger of losing
  your home in foreclosure or having your
  automobile repossessed.

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Eliminate a Borrower In the Loan

• If you are going through a divorce or have
  purchased a house with a relative or friend, you
  might want to change who is legally accountable
  for paying the mortgage. Refinancing your
  mortgage is an opportune time to change what
  borrowers are recorded on the loan. Take note
  that the title or deed to the home does not
  automatically change if the mortgage does, so you
  might have to remove a title from that document
  as well.? Make sure the closing costs and other
  various expenses are worth the title change.

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What to Watch Out For

• If you are thinking it's time to refinance
  your Salt Lake City home, investigate the
  following
• Closing Costs
• Prepayment Penalties
• Personal Mortgage Insurance
• Evaluate whether your reasons for refinancing
  may outweigh the probable costs. In that case,
  you can conduct a simple breakeven analysis to
  determine precisely what loan terms you will need
  to find to create the new mortgage worthwhile.