Many Americans are looking for ways to cut expenses these days. Examining the budget and cutting back on entertainment and non-essentials are usually initial steps to living a more frugal lifestyle. Clipping coupons for grocery shopping, eating more at home and packing a lunch may also add a little more to your bottom line each month. But all of these savings may not be enough. More homes are being refinanced than ever before and it’s usually a painless course of action for some.

If refinancing your home has crossed your mind a time or two, perhaps it’s a logical next step for you to consider. After you have analyzed your budget, you should check out the selling prices for homes in your area. A realtor might be able to help you determine if you should sell your home now or wait for a better market. If you’re in dire circumstances, have plenty of equity in your home and need to pay down some debt, selling your home might be the way to go. Lots of homeowners are down-sizing to a home with less square footage with a reduced mortgage payment. A smaller home is also less to maintain in this crazy, fast-paced world. However, if the real estate market is drastically down in your area, selling your home may not be very appealing. Refinancing your home might make more sense:

A. If you can obtain a lower interest rate of at least 2 percent or more,
B. If you intend to live there long enough to recoup the refinancing costs (points), and
C. If you could comfortably afford to make the new, reduced payments, which should be less than one-third of your current income.

Lowering your monthly mortgage payment by decreasing the interest rate is very desirable especially if your income has been reduced or if you’re over your head with credit card debt! Some additional reasons for refinancing your home loan might include:

A. The consolidation of other debts into one loan, which will result in a longer term,
B. The adjustment of risk (i.e., switching from a variable-rate to a fixed-rate loan) or
C. The need to free up cash (this will result in a longer term).

The best place to check out any home refinance options is your current mortgage lender. They already have most of the paperwork from your original purchase of the home which will save you time and money. They also have your payment history. If your payment history is good, they generally will be happy to help. Most lenders now have applications that you can complete online in the privacy and comfort of your home and after office hours. If you’re short on cash, some lenders will even roll the closing costs of the refinancing into the new loan, so you’re not out much out-of-pocket expense. As you might guess, this will increase the principal amount of your loan, which will reduce your equity. Some lenders will even send a new loan closer out to your home after work. It doesn’t get much easier than that!

Another major consideration for refinancing your home is the type of loan you could easily live with:

A. Conventional loans,
1. fixed rates
2. adjustable rate mortgage (ARM)
3. balloon mortgage
4. interest only mortgage
5. many other types

B. Government-backed loans
1. Federal Housing Administration (FHA) loans
2. Veterans Administration (VA) loans
3. Farmers Home Administration (FmHA) loans
C. Alternative financing.

Whatever you do, avoid getting into an upside-down situation. Steer clear of any loans that have increasing rates as the loan matures. These kinds of loans can put you as the main character in a living nightmare! If at all possible, work with someone you can trust and who has a great reputation in mortgage lending.

Financial struggles are nothing to be ashamed of. If you have a spouse or partner in your home ownership, sit down together today and examine all your options. Make a plan and then make it happen. Owning a home is a privilege and you should consider yourself wealthy if you have a home. Be proactive, begin to live a simpler, more frugal life and put first things first. Enjoy the best things in life, like loving someone and knowing they love you, watching a beautiful sunset or sunrise, basking in the warm sun or walking on the beach with your child or grandchild. Most of all, smile, be grateful and thank God for all He’s given you to enjoy!

Author Bio: Glo Johnsen owns the Refinancing Saves Money. Here you can find mortgage refinance information to help you save money. Knowledge is power in the mortgage finance world. Visit http://www.RefinancingSavesMoney.com

Category: Real Estate
Keywords: refininancing, mortgage, mortgage refinancing, refinance your home