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Refinancing Article
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Refinancing of loans has become quite common today with more and more people getting loans for purchases. Mortgage loans are still the largest loans because of the high cost of homeownership. There is almost an equal amount of consumer loans as well, however. With the cost of living increasing at a higher rate than most people's income, loans are about the only way many people can afford to buy the things they need. The unfortunate thing about loans is the interest rate the consumers are being charged. There's no way around this, however, because this is how the banks make their money. But, for the consumer, this is increasing the cost of what they're buying. For instance, an individual will purchase an automobile for $15,000 and be charged a certain interest rate. Many times after the loan is all paid for, the cost of the car is over $20,000 after the interest has been added into the loan.
from:The same scenario is true when we buy a home. With a home the initial cost is much higher and the term of the loan is much longer. Most new car loans only go for 36 to 72 months. Mortgage loans, however, run anywhere from 20 to 30 years. That's a lot more months where the consumer is paying interest. In many cases, by the time a home mortgage loan is fully paid, they've almost paid for their home twice. To avoid paying anymore than they need to, most people pay attention to refinance rates and look for opportunities to refinance their loan at a lower refinance rates in the hopes of saving some money in interest charges.
At the initial time of the loan, the interest rate the borrower is charged is determined by a couple of factors. The main factor is what the current market interest rate is at. Banks make the most of their money through the interest they collect on loans. When people put CDs in their bank, the bank has to pay the customers interest on the CDs. If they are paying their customers 5% interest on the CDs, they have to charge their customers a higher rate of interest on the loans or they wouldn't make any money. Both of these interest rates are determined by the current market rates. This is also used to determine what refinance rates can be as well.
Interest rates are also determined by how good a borrower's credit rating is. A poor credit rating will result in higher loan or refinance rates whereas a good credit rating will result in lower refinance rates. Lower refinance rates are the main reason why borrowers choose to refinance loans. Refinancing is a way to get the loan paid off quicker and cheaper by lowering monthly payments, lowering the term of the loan or just paying less interest. If you're a current borrower, you should always watch the refinance rates at your bank so you know when it's the best time to check into refinancing.
Refinancing News
Obama presses Congress on home refinancing - USA TODAY
 Los Angeles Times | Obama presses Congress on home refinancing USA TODAY By Richard Wolf, USA TODAY President Obama is urging Americans to press Congress to pass his latest home refinancing plan -- something he admits will be difficult to do. "In order to lower mortgage payments for millions of Americans, we need Congress ... Obama pushes plan to help 'responsible' homeowners refinance Obama proposes refinancing plan for underwater homeowners Obama, Republicans offer economic solutions in weekly addresses |
Refinancing: Time to Act? - Wall Street Journal
 Wall Street Journal | Refinancing: Time to Act? Wall Street Journal By JESSICA SILVER-GREENBERG Mortgage rates have been hovering at historical lows for months—but some homeowners are waiting for even better deals before they take the plunge and refinance. Associated Press Townhouses in Beaverton, Ore. With Rates This Low, Should You Refinance Again? 85 Percent of Refinancing Homeowners Maintain or Reduce Mortgage Debt in ... Refinancing bad for business? |
An Easier Path to Refinancing - New York Times
 New York Times | An Easier Path to Refinancing New York Times It is only a first step toward healing the economy's biggest open wound, but President Obama's new mortgage refinancing plan could provide considerable relief for millions of homeowners shackled to high interest rates. The New Refinance Programs: will they help the Arizona Economy? Sen. Franken to introduce legislation to remove hurdles to mortgage refinancing Halfway home |
Mortgage Refinance Rates: 15 Year Refinance Mortgage Rates at 3.29% - MonitorBankRates.com
 MonitorBankRates.com | Mortgage Refinance Rates: 15 Year Refinance Mortgage Rates at 3.29% MonitorBankRates.com Mortgage refinance rates on 30 year conforming home loans are averaging 3.98%, unchanged from yesterday's average 30 year mortgage refinance rate. Mortgage refinance rates today on 15 year home mortgage loans are averaging 3.29%, down from yesterday's ... |
Obama Seeks Refinancing Aid to Lift Housing - Wall Street Journal
 Wall Street Journal | Obama Seeks Refinancing Aid to Lift Housing Wall Street Journal By NICK TIMIRAOS And LAURA MECKLER President Barack Obama is expected to announce a fresh bid to revive the housing market Wednesday—despite likely congressional opposition—by letting millions of homeowners refinance their mortgages, ... Obama to detail broader housing refinance plan Obama proposes refinancing plan Mortgage Relief Plan Aims at Refinancing |