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Home Finance Loan Rates Have Decreased Dramatically – Should You Refinance?

All individuals desire to be homeowners. It is a nice feeling living in your own home and this is the reason why people go for mortgages. In fact, a recent study established that one of the main reasons why most Americans borrow is to become homeowners. However, this is a critical decision you really need to be careful about. At all time, ensure you are dealing with licensed lenders and you can get more information about from best money lender Singapore and compare their rates online by visiting this site

Mortgages are often required to be paid for a period of up to 30 years, though some lenders offer terms exceeding this timeframe.

You will be required to make an initial deposit and monthly payments throughout the mortgage life. For this reason, it is vital to ensure that you can make the payments before signing the agreement. Remember you risk losing your home if you fail on payments. This is undesirable and you should never let it happen.

Image result for home refinance

Home Refinance

It is essential to compare loans online before making an application. Mortgage lenders have different terms and it is good to look for one perfectly match your conditions. The interest rates charged may be fixed or adjustable. How does this affect you? Well, this is the backbone of our discussion today.  When home finance Loan rates decrease dramatically, should you refinance? To effectively respond to this question, let us when it is sensible to refinance your home loan.

SHOULD YOU REFINANCE?

What does it mean to refinance a mortgage? Refinancing means settling the current loan and substitute it with another one.

The decision to refinance if motivated by many factors. The common ones include:

  1. a) Debt consolidation
  2. b) To finance a huge purchase through home equity
  3. c) To adjust the type of rate
  4. d) To lessen the term of the home loan

We will look at each of these motives. Importantly, refinancing comes with costs. In fact, it can cost 3-6% of the principal amount. For this reason, it is very important to determine if refinancing is a good decision. Let us break down the discussion into the abovementioned motives.

Refinancing to Obtain a Lower Rate

Home Finance Loan

Home Finance Loan (Refinance)

Refinancing to lower the rate charged on your current loan is one of the best decisions you can make. In general, it is wise to refinance if the move will be lessening the interest rate on the mortgage by 2% and above.

Some finance experts say even a 1% decrease is good enough to stimulate refinancing. Lessening the rate of interest helps you to save funds and that is really important. There are yet more benefits you can enjoy through this move. With a lower rate, you can upsurge the rate you are building equity in the asset and can cut the size of your payments.

Let us take a practical example here. Assume you have a mortgage of $100,000 payable within 30 years with an interest of 9%. If you do the math, you will discover the mortgage has a total interest of $804.62. In case the rate of interest is lowered to 4.5%, the total interest payment will be $506.69. Indisputably, you would have saved a lot of money. And now back to the question we raised at the outset – if Home Finance Loan Rates Decrease Dramatically – Should You Refinance? The answer is yes! Why? You can save a lot of money by doing that.

Refinancing to Convert To an either Adjustable or Fixed Rate

Generally, adjustable-rate mortgages often have lower rates compared to fixed rates. Nevertheless, with periodic adjustments, it is possible to end up with a higher rate compared to a fixed-rate mortgage. In this case, changing to a fixed-rate lessens the interest rate and relieves you from the stress that comes with volatile rates.

Home Finance Loan

Home Loan Refinance: (Refinancing to Convert To an either Adjustable or Fixed Rate)

By the same token, changing to adjustable rates is an effective and beneficial strategy where the interest rates decline.

If the rates keep decreasing, the regular adjustments may lead to lesser rates and smaller instalments, invalidating the need to refinance whenever the rates fall. Nonetheless, it would be ridiculous to do this in case the rates are increasing.

If you do not intend to live in your home for long, changing to ARM, which in many cases has lower payments, is a nice move to ponder on. If the rates are decreasing, you can lessen the interest rate on your home loan. However, you will not be plagued with worries concerning higher rates in the future since you are not going to occupy the home longer.

Refinancing to shorten the Term of the Loan

The fall in interest rates provides you with a chance to refinance the current loan to a different one which has a shorter term. It is as simple as that but it is one of the major reasons why you should consider refinancing. Shortening the term of the loan can save you a lot of money. Remember mortgages are long-term and the burden is often heavier ion the upper part of the repayment period.

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Home Finance Loan (Refinance to shorten loan term) 

Refinancing with an Aim of Consolidating Debt or Tapping Equity

It is always possible for homeowners to access the equity in the asset to fund huge costs. For instance, the cost may include home remodeling or financing college education if a child.

The fact that refinancing adds value is enough to justify their refinancing decision. Besides, the mortgage interests are always tax-deductible, yet increasing the term of the mortgage might not be a wise decision.

Home Finance Loan (Consolidating Debt) 

What is more, homeowners refinance to with a view of consolidating debt. Generally, substituting a debt with high interest with the one with lower interest is a fantastic idea. Nevertheless, financial prudence is not guaranteed in this move. Consider this option if you are quite sure you cannot overspend refinancing get rid of the debt.

It is a good idea to refinance when the interest rates on home loans are significantly decreasing. This is a move that can save you a lot of money. However, we have also considered other circumstances under which refinancing can be a fantastic idea. Be very careful with the decisions you make to ensure there is financial prudence in each one of them. Thank you.

NB: This article is a guest post from Loan Advisor Singapore.


TechTrybe Africa, the Largest Growing Online Tech Community in African Launched

Nigeria, LagosTechTrybe Africa, a company dedicated to unleashing the power of technology to transform African youths, businesses and organizations has just been launched. As the largest growing online tech community in Africa, they are on a mission of raising a new generation of African youths who will not just consume or study about technology but become leading players in global technological innovations to solve problems in the society.

While technology has been known as the major source of development, the African continent has rather been more of consumers rather than contributors to global technological advancement. Many African youths, businesses, and organizations also seem to be bereft of technological skills and knowledge to leverage technology to skyrocket their growth.

With passion for technology, media and entertainment, Kunbi Black, founder of TechTrybe Africa decided to initiate a company that will become the number one African tech community to groom African youths from a very tender but sensitive age about the entire concept of technology through online and offline trainings, seminars, conferences, internships, workshops, festivals, TV shows and much more.

“From a humble beginning, we began to garner attention from businesses, media houses, and the public. TechTrybe Africa now has a whopping 16,000 followers on Instagram and 12, 000 followers on Twitter with a growing audience on Facebook and Linkedin,’’ says Kunbi Black, CEO of TechTrybe Africa. “Our website, TechAfrica.Africa has also become the main tech related news and education platforms providing high value and relevant content for people across the African continent.

TechTrybe Africa has also initiated a set of projects that are making waves in high schools, tertiary institutions, the business community, and the general public. The following entails some of the projects that they are currently running:

1. TechTrybe STED School Club: This is a club devoted to teaching young African kids from the grassroots about technology and how to wisely use it. They adopt fun, innovative and creative ways to teach IT, Science, Technology, Engineering and Design to young people and help them develop practicalize what they learn.

2. Techtrybe Campus Tech Fest: It is a newly created annual student’s event, set to fuse entertainment and technology learning together and attract at least 3,000 people including students, academia, youths, corporates, and the general public.

3. TechTrybe TV Show: The show is an offshoot of the online community; it is a highly entertaining tech-based phenomenon. Through a well-seasoned and experienced lead host, the audience is taken through a seamless journey from segment to segment with sub-host for a segment to hit the street for a vox pop trivia.

4. TechTrybe Academy: It is a high-end online academy dedicated to providing incredible education on anything tech related to individuals, businesses, and organizations to maximize the power of technology for limitless possibilities across countries in Africa.

5. TechTrybe Africa Community: This is an online community dedicated to help African youths to engage, learn, and discuss subject matters that virtually covers everything tech related, reaching a massive range of participants across the African continent.

6. TechTrybe Digital Services: This includes a range of services spanning from blogging, content development, content marketing, influencer marketing, social media marketing & engagement, training and consulting for tech-based businesses. The suite of services is to help promote and grow tech brands for maximum accomplishment.

TechTrybe Africa can be located in Opebi, LagosNigeria. To join their online platform, schedule seminars or training events or book for their digital services, send an email via info@techtrybe.africa, call via phone at +234 902 314 7984. For more information about their projects visit their social media platforms and their site at www.techrybe.africa.

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