TO DECIDE on whether or not to take a mortgage refinance loan can be a tricky task. There are many variables, permutations and combinations of mortgage refinance available in the state of Ohio.
While lenders or brokers can make you offers, it is for you to decide what is best for you, which in turn depends on your own personal situation, present and anticipated.
Before we get into the nitty gritty of mortgage refinance in Ohio, let's briefly look at certain generic aspects of the subject.
What exactly is mortgage refinance
Mortgage refinance is basically a mortgage loan you take to pay off the balance of an earlier mortgage loan you took. Once you pay off the earlier mortgage, you continue servicing the new loan until t is paid off. Note that the term ' mortgage refinance' is applicable only if you collateralize the same property that you had pledged for the earlier loan.
Why mortgage refinance
Interest rates fluctuate. The Federal Reserve revises interest rates on the basis of economic conditions in the United States. If current interest rates are lower than the rate you are paying on your earlier mortgage loan, it may be worthwhile considering a refinance loan. However, it is not always so simple. The purpose of mortgage refinance is not necessarily to take advantage of lower rates.
There could be other reasons too, such as: reducing the repayment time, prolonging the repayment time by reducing your monthly payments, getting a slump sum of cash, and so on. What may be good for one person need not be good for another person.
Whether a refinance would be good for you would depend on many factors such as: when you want to sell off your property, how real estate prices have moved or are likely to move, what your income is and what it is likely to be, do you need to move into a bigger or smaller house, etc.
Adjustable-rate mortgage (ARM) is the most popular refinance loan in Ohio. These are loans that start with low monthly repayments for a specified period of time, after which the rates may increase. There are usually denoted as15 years ARM 3/1, or 30 years ARM 5/1, and so on.
This naming system is easy to understand. For example, "15 years ARM 3/1" means the loan has to be fully repaid in 15 years, and that a low fixed interest rate will apply for the first three years and then change, usually increase, every year thereafter.
Similarly, "30 years ARM 5/1" means the loan has to be fully repaid in 30 years, and that a low fixed interest rate will apply for the first five years and then change, usually increase, every year thereafter.
How to proceed
Once you have decided what you want your mortgage refinance to do for you, you should visit the websites of three or four lenders of brokers, and use their online calculators. Websites where you can find good calculators are: www.erate.com , www.mortgageloan.com, www.bankrate.com, and www.mortgage-calc.com though there are many others too with equally good calculators.
Feed in the data the online calculator asks you for, and the calculator will show you different options available for you. Compare the options given by the different calculators, decide which is the one you need (or do you need one at all?).
Then contact a lender or a broker (usually the websites whose calculators you use provide a list of lenders/brokers in your specific city, or they themselves might contact you if you ask through their websites). If you are contacting a broker, be sure it is registered in Ohio.
Finally, remember that online calculators are only for your guidance and that precise details of payments and the like might vary a little from what the calculators arrive at.