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Archive for July, 2010

Understanding Mortgage Refinance Loan

Refinancing a mortgage is in some ways similar to getting your first mortgage with a few important differences. Since you already own the home you dont have to go through a preapprovals process or find a realtor and a home to buy. Unfortunately youll still have a lot of paperwork to do but savings thousands of dollars over the life of the loan is worth it.

There are very specific steps you should take to have a successful mortgage refinance

Step 1: Determine if Refinancing is Right for You

There are tools like mortgage calculators to determine whether a mortgage refinance loan will save you money. Factor in your current interest rate future interest rate if you have an adjustable loan and closing costs. If you want to take cash out include that amount in your new mortgage balance for the calculations.

Remember refinancing creates a new loan usually with a full loan term. If possible you can make extra payments to finish the loan at the same time as your original loan and that will save you more money than the calculator predicts. For the calculation assume youll only be able to pay the amount due.

Step 2: Check Your Credit Reports and Scores

Even if you already own a home your lender will still use your credit scores and credit reports to determine which rate you qualify for. Order scores and reports for each spouse if both of you will be on the mortgage. You want to get best rate possible. Ideally your scores should be above 720 to get the absolute best rate but 680700 will get you a good rate. You can still refinance if your scores are low but it might cost you more especially if your scores were high when you got the first mortgage. Carefully review your credit reports for errors. 80 of all reports have errors. Common errors include listing accounts that dont belong to you late payments that werent really late and items that were supposed to be removed. Follow the instructions at each credit agency to correct the errors.

Next do what you can to fix black marks like recent defaulted loans recent collections and high credit card balances. You may have to spend a little more money to accomplish this but its worth it if it saves interest on your mortgage which will ultimately cost you more over 30 years.

Step 3: Research Rates Fees and Lenders

Before you contact any lenders research current interest rates and fees for the type of loan youre interested in. Comparison shop to see which banks is offering the best rates. Note the terms closing costs and whether or not the rates are fixed or adjustable.

In addition to rates and fees check reviews of the lender online and at the Better Business Bureau. If the lender has a history of making late property tax or insurance payments or providing poor customer service find a different lender.

Step 4: Contact Your Current Mortgage Servicer

Your current lender wants to keep you as a customer. If they still own the loan they may be able to modify your current loan to a lower rate with just a little paperwork and a low fee. Unfortunately most lenders sell their loans to larger mortgage servicers so its unlikely that youll be able to take advantage of this. If you want to pull cash out refinancing is the only option.

If you cant modify your loan your lender or mortgage servicer may offer a streamlined refinance. Youll get a new loan at a better rate but with fewer fees and a little less paperwork. It may also take less time to close. Of course you may not want to accept their offer if the rate is higher than what you found at other lenders. Consider the closing costs when deciding which mortgage refinance loan will save you more money. Using your current lender could save on closing costs but a higher rate could cancel out the savings. If you found a better rate elsewhere ask your current lender to match it. If they want to keep you they might do it.

Step 5: Contact Other Lenders

If your current lender cant get you the best refinance rate contact other lenders about refinancing with them. Your goal is to find the best rates with the lowest fees and closing costs without adding those fees to your loan balance. Some lenders now offer refinance loans with 25 and 20year terms so your new loan will end at the same time as your original loan. If it will save you money and you can afford the payments consider the offer.

Refinancing to a lower rate can save you a lot of money over the life of the loan. A mortgage refinance loan can also help you get muchneeded cash to remodel your home or pay down credit card debt. Its not hasslefree but saving money is worth the effort.

For more articles on mortgage refinance visit http://www.bills.com/mortgagerefinanceloan/

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About the writer:nbsp;nbsp;Justin has 5 years experience as a financial adviser his key areas are
loan consolidation debt relief mortgages etc. For more free articles and advice visit http://www.Bills.com.

Group Versus Individual Term Life Insurance

There are many perks that come along with secure employment. Along with job security and your salary many employers also offer group life insurance plans as part of the benefits package. Group insurance policies are provided by the company / employer to their employees. The cost of such a policy is spread over a large group and can offer an array of benefits and savings to the members of the group.

Group insurance in other words is a single insurance policy that covers a specified group of people. These could include employees of a company or even members of professional organizations. The policies could also include dependents of the members. The idea behind a group policy is to have a larger group of people over whom the risk of claims is spread. While everyone pays the same premiums here you could have members with different health conditions some could have above average health and others might suffer from ill health.

Group insurance could benefit a company in many ways. It could reduce absenteeism in cases of illness increase productivity reduce overall liability of the company or organization and build up relations between employer and employee. Over the past few years rates for group insurance have decreased significantly. Premiums are divided between the employer and employee but the choice of plan is made solely by the employer. Therefore it is imperative to make sure that they are aware of what you need and take all possible aspects into consideration before choosing a group policy.

For those who have difficulty qualifying or getting coverage on their own then a group policy is an excellent option. For those who have below average health are older and need an insurance policy that asks no questions a group policy is the best option. The one major drawback regarding group life insurance is that coverage stops when you leave your job. And in the unfortunate event that you have to leave your job due to a serious illness or disability you will be unable to find new insurance at that point. Therefore if you are young relatively healthy and are looking for coverage for a guaranteed amount of time an individual plan might be a better choice for you.

Individual insurance is a single insurance policy that covers only one person. Policies available could be term insurance where the coverage is fixed for a specified period of time ranging from one to thirty years and whole life insurance where the policy holder is covered for his/her whole life. Term life insurance is less expensive as compared to a permanent life policy as it has no investment benefits attached. Death benefits can be claimed to offset funeral expenses pay off pending debts and look after the familys expenses after the policy holders demise.

Differences between Group and Individual Insurance
Group policies are not based on individual health. Irrespective of factors such as health conditions gender age etc. everyone in a group policy is grouped together in one category. This works in favor of those who suffer from ill health or who are older. But for those members who are young and still healthy they might end up paying more than is necessary for their coverage. An individual term life policy for a nonsmoking healthy applicant could be up to fifty times cheaper than a group policy premium.

Group costs also tend to increase when a member enters the next age bracket and the rates are not guaranteed either. Individual term insurance can be fixed to remain level for specified periods of coverage. In case you leave your job or your employment is prematurely terminated coverage in a group policy cannot be carried on to your next job and the costs to then convert to an individual plan can be prohibitive. Individual term life policies are usually guaranteed renewable. Depending on the type of insurance policy opted for; you could even tailor your plan to meet a host of specific needs.

At the end of the day what is most important is that you take out an insurance policy whether group or individual and thereby offer a secure future to your family and loved one. Depending on your individual situation and taking all key factors such as age health medical history and occupation into consideration you should work in conjunction with your agent or insurance provider to reach a wellinformed decision regarding what your best insurance policy option would be.

About the writer:  

About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of toprated carriers.

Does Refinancing A Home Make Sense?

Refinancing mortgage loan basically means that home owner is replacing mortgage payments and terms of the loan to new terms and monthly payments. Home owner refinance mortgage loans for several reasons. Mortgage payments are one of the largest monthly expenses for any family. Reducing the payments gives extra cash to the home owner to manage other expenses.

First and one of the best reasons could be to lower their monthly mortgage payments. Interest rate for home loans changes all the times based on economy. If the mortgage interest rate goes down then it is a financially wise decision for home owner to refinance the mortgage loan. This way home owner can reduce the monthly payment of mortgage loan and can have substantial free money to utilize for other expenses.

Second good reason could be to change the financing term from adjustable loan to fixed loan. Depending on the individual financing condition when people buy real estate they opt for adjustable loan which gives flexibility to home owner to pay lower monthly mortgage payments. Adjustable mortgage interest rate is normally tied up with economy and as the interest rate raises the mortgage monthly payments goes up. Adjustable mortgage loan gives uncertainty of monthly home payment and home owner are very uncomfortable to have that fear. By refinancing the adjustable mortgage loan to fixed mortgage loan gives home owner security of having same monthly payments for the term of the loan. Fixed mortgage loan will have no impact of economy in future.

Third reason could be to take out the equity or get line of credit for personal financial reason. Home renovation could be one of the reason home owner may want to use equity.

Another reason could be to reduce the life of the loan. Home mortgage loans are normally for 30 years or 360 monthly payments. Home owner could have several option attached with loan terms to pay off the loan ahead of the terms. Paying off mortgage earlier could be their strategy for retirement plan.

One more reason which is used for financial gain is to refinance the loan to get exemption from PMI Private Mortgage Insurance. When home owner get the first time financing it is normally for more than 80 of the loan amount. Lender charges home owner for PMI which is included in the monthly payment. Once home owner build some equity in the house then it can be refinanced for less than 80 of the loan saving home owner PMI payment. This way home owner may reduce the monthly payment.

Mortgage Refinancing is a term used for taking another loan to replace the previous one with the same asset as the collateral. Refinancing can be worthwhile provided you choose the one that is according to your requirements and situation. You can opt for a mortgage refinance according to your convenience.

Primarily refinancing is done to reduce monthly payments. Refinancing your mortgage helps you in bringing down the monthly payments either by shifting to the current lower rate of interest prevailing in the market or by reducing the length of the period of payment or both.

Refinancing lets you benefit from the present lower interest rates of the market. Initially the interest rates may have been higher than what they are now but that does mean you need to continue paying exorbitant rates. The extra cash saved can be utilized for meeting other expenses.

The cash saved from reduced monthly payment can be used other purposes such as personal expenses paying off other debts or paying down the principal of the loan.

An advantage related to mortgage refinance is that it reduces the risk associated with the existing loan. Interest rate is subject to fluctuations. It can rise any moment causing you to pay high sum of cash. To avoid insecurity you can shift from ARM Adjustable Rate Mortgage to FRM Fixed Rate Mortgage. This ensures a steady interest rate throughout. Also if you choose to extend your stay in the house more than seven to eight years it is always preferable to shift from ARM from FRM.

Another option is that one can reduce the period of the payment. This will help in getting rid of burden of the loan faster and save a considerable amount of dollars that could have gone in paying extortionate interests.

If in case at the time of purchasing your house you were unable to pay a down payment of 20 percent you are required to pay a PMI Private Mortgage Insurance. But if you have been steadily paying down your mortgage and the value of your house has gone up then your equity will increase 20 percent. In that case by refinancing your mortgage you can terminate paying further PMIs.

About the writer:  The author John Daniel is a licensed Real Estate Broker and investor in Orange County California. He is an experienced realtor that specializes in South Orange County residential homes and Orange County investment real estate. Find more information at: http://www.jdanielrealty.com