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Adverse Credit Remortgage: Refinance at Better Terms
Getting a remortgage with adverse credit is a daunting task and it is increasingly becoming a widespread problem in UK. An adverse credit remortgage is a type of mortgage, which is particularly used by people who have adverse remarks in their credit...
His And Her Finances
It’s difficult to learn how to manage finances together when you’ve been managing your finances on you own, for better or worse, up until now. But when you become part of a couple, many things change, and your finances are no exception! Some couples...
Insurance, Fuel And Personal Finance In The UK Following Recent World Catastrophes
Following the increase in UK terrorist activities and the catastrophe that has hit New Orleans, it seems we are all going to have to foot the bill. The total cost of the catastrophe is currently predicted to top $25 billion (£13.6bn), however many...
Unsecured Loans: Route To Finance In The Absence Of Guarantee
Does yours being a tenant or a homeowner with insufficient equity imply that loans and other methods of financing cash-shortages are not meant for you. Loan providers do not reveal such stark indifferences towards borrowers who come for unsecured...
War of the Worlds: Student Finance versus Life
It’s a worrying time for current and prospective students. Figures from the Prudential, show that a third of UK university students have considered abandoning their studies due to the financial strain they have encountered. It is not surprising that...
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Home Loan Mortgage Loan Refinance - Refinancing For A Shorter Term To Save Money
Saving money with lower rates isn't the only reason to
refinance. Opting for a shorter loan can also save thousands in
interest and free up income in the future. A short term loan can
also help you pay down your principal quicker.
Better Rates
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.
About the author:
View our recommended mortgage Refi
lenders. Carrie Reeder is the owner of ABC Loan Guide, an
informational website about various types of loans.
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