4 Signs Refinancing Is The Wrong Move

4 Signs Refinancing Is the Wrong Move

Refinancing your mortgage can bring your interest rate down, lower your monthly payments and generally save you some money. With rates still low, you may be pondering whether now’s the right time to try for a better deal on your home loan. But you don’t want to pull the trigger too soon. If any of the following apply to you, you may want to think twice before jumping on the refinancing bandwagon.

Compare refinance mortgage rates. 

1. Your Credit’s Not in Great Shape

Refinancing when you’ve got a few blemishes on your credit report isn’t impossible, but it’s not necessarily going to work in your favor either. Even though lenders have relaxed certain restrictions on borrowing over the last year, qualifying for the best rates on a loan can still be tough if your score is stuck somewhere in the middle range.

If you took out an FHA loan the first time around, you might be able to get around your less-than-spotless credit with a streamline refinance, but approval isn’t guaranteed. Interest rates are expected to rise toward the end of the year, but that still gives you some time to work on improving your score.

Getting rid of debt, limiting the number of new accounts you apply for and paying your bills on time will go a long way toward improving your number so that when you do refinance, you’ll be eligible for the lowest interest rates.

Related Article: refinance closing costs.

3. A No-Closing Cost Loan Is Your Only Option

4 Signs Refinancing Is The Wrong Move

If you don’t have a few thousand dollars to spare to cover the closing costs, you can always look into a no-closing cost loan. With this type of refinance, the lender folds the costs into the loan itself so you don’t have to pay anything extra out of pocket. While that’s a plus if you’re short on cash, you may be really putting yourself at a disadvantage in the long run. Increasing your mortgage (even if it’s just by a few thousand dollars) means you’re going to pay more interest over the life of the loan.

For example, let’s say you refinance a $200,000 mortgage at 4 percent for 30 years. Altogether, you’d pay $143,000 in interest if you don’t pay anything extra. Your closing costs come to 3 percent but you roll them into the loan so you’re refinancing about $206,000 instead. That extra $6,000 would cost you another $11,000 in interest so you have to ask yourself whether the monthly savings from refinancing justify the overall added expense.

4. Compare Your Refinance Loan Options

Once you’re ready to refinance, it’s important to take the time to compare what’s available from different lenders carefully. Checking out the rates and fees each lender charges ensures that you won’t spend any more money on a refinance loan than you need to.

Photo credit: Â©iStock.com/goldyrocks, Â©iStock.com/SolisImages, Â©iStock.com/DOUGBERRY

The post 4 Signs Refinancing Is The Wrong Move appeared first on SmartAsset Blog.

Source: smartasset.com

Money-Saving Hacks to Beat the System

Money-Saving Hacks to Beat the SystemDavid Pogue is one of the world's bestselling how-to authors with over 3 million books in print. He has 120 titles in the Missing Manual series, a collection of funny computer books, and he wrote or co-wrote seven books in the "for Dummies" series.

David is a former New York Times columnist, the tech critic for Yahoo Finance, and he writes a monthly column for Scientific American. He's worked in TV as the host of science shows on PBS's "NOVA" and as a correspondent for "CBS Sunday Morning" since 2002. He's the recipient of prestigious awards like multiple Emmys, Webbys, and a Loeb for journalism.

In this interview. we talk about his most recent title Pogue’s Basics: Money – Essential Tips and Shortcuts (That No One Bothers to Tell You) About Beating the System. It covers 150 simple tips and tricks to stop leaving money on the table every day. You can pick up a copy on Amazon, Barnes & Noble, IndieBound, or Booksamillion.

[Listen to the interview using the audio player in the upper right sidebar of this page or on iTunes, Stitcher, and Spotify]

Free Resource: Laura's Recommended Tools—use them to earn more, save more, and accomplish more with your money!

You should never buy anything but refurbished computers. – David Pogue

I had a great time chatting with David about some of my favorite money-saving tips from the book. Here are some of the topics we discuss:

  • The right way to purchase computers and laptops
  • Whether you should pay for extended product warranties
  • Tips to save money on insurance
  • How to get free money from Amazon programs
  • Places to turn unused gift cards into cash at sites like CardCash or Cardpool
  • How to leverage credit cards for cash back

No matter how much or little money you have, you'll take away easy tips and shortcuts to outsmart retailers, leverage savings programs, and keep more of your hard-earned money!

Get More Money Girl!

Want to know the best financial and productivity tools that I use and recommend to save time and money? Click here to check out 40+ tools I recommend!

To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on iTunes or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. The show is also on the Spotify mobile app!

Click here to subscribe to the weekly Money Girl audio podcast—it’s FREE!

There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page. Here are all the many places you can connect with me, learn more about personal finance, and ask your money question:

  • Dominate Your Dollars – Laura's private Facebook Group
  • Money Girl on Facebook
  • Twitter
  • Google+
  • Pinterest
  • Money Girl podcast on iTunes (it’s free to subscribe!)
  • Money Girl on the Stitcher app (also free to subscribe!)
  • Email: LauraDAdams.com/contact

Click here to sign up for the free Money Girl Newsletter!

Download FREE chapters of Money Girl’s Smart Moves to Grow Rich

To learn about how to get out of debt, save money, and build wealth, get a copy of my award-winning book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite bookstore as a paperback or e-book. Click here to download 2 FREE book chapters now!

Hands Taking Out Money image courtesy of Shutterstock

Source: quickanddirtytips.com

Why Are Refinance Rates Higher?

Mortgage Q&A: “Why are refinance rates higher?” If you’ve been comparing mortgage rates lately in an effort to save some money on your home loan, you may have noticed that refinance rates are higher than purchase loan rates. This seems to be the case for a lot of big banks out there, including Chase, Citi, [&hellip

The post Why Are Refinance Rates Higher? first appeared on The Truth About Mortgage.

Source: thetruthaboutmortgage.com

An Alternative to Paying Mortgage Points

If and when you take out a mortgage, you’ll be faced with an important choice. To pay or not pay mortgage points. In short, those who pay points should hypothetically secure a lower interest rate than those who do not pay points, all else being equal. That’s because mortgage points, at least the ones that [&hellip

The post An Alternative to Paying Mortgage Points first appeared on The Truth About Mortgage.

Source: thetruthaboutmortgage.com