Some Suggestions On Researching Refinance Lenders
The following are basic suggestions on researching good quality refinancing:
- Do not get a new finance from your current company if they cannot offer lower interest rates like other firms. They may offer you a deal equivalent to your old one. Never drop a modest interest rate for a similar or higher interest one. Look at the Annualised Percentage Rate of the new refinance. This ought to be lower than the rates stipulated in the former loan.
- Avoid fee-based credit fixing services: they are disreputable. You will likely hear from them only once per month; when their service fee is due.
- Don't fall for tax advantages offered for debt consolidation purposes. Reassess your personal tax position and consider how this will be affected. Unless you diligently itemise your deductions, the tax write-off for your refinance interest is worthless. Deflect dubious brokers. You will know them by the suspiciously low rates they offer.
- Is your goal to lower the periodic payment or to pay back less interest? A lower interest rate can be translated into the same month payment, but with more of the payment being applied to the principal of the loan. This, of course, helps you pay back the debt faster.
- Do your research: As in all other sectors, there is deep competition in lending. You could try for a refinance deal from your current broker, but they might not necessarily offer you the most effective deal.
- Once you choose a company, you need to nail down, _in writing_, the interest rate, closing costs, and pre-payment penalties. If the lender wobbles on these, consider walking away. When it comes to lowering your rates you will need to weigh the benefits of having a lower rate vs. paying points/fees up front. You may end up paying a lot more depending on your choice and how long you plan on keeping your finance going.
- Utilise your rescission rights. If you do not like the way your deal has turned out right before closing, you can still re-negotiate or go back to square one. Do not force it if it is gone sour. Keep in mind that you are given three working days from the date of closing to think things through. In case you decide you do not want the offer, inform the finance officer in writing before the three days are up. In turn, the lender has twenty days to refund your fees.
- Is your goal to lower the monthly payment or to pay less interest? A lower interest rate can be translated into the same monthly payment, but with more of the payment being applied to the principal of the deal. This, of course, helps you pay off the debt faster.
- Consider what kind of interest rate is being offered, whether it is fixed or adjustable. Also consider the finance's annualised percentage rate (APR). The APR reflects all the expenses of the loan, including interest rate, points, provider fees, and extra credit charges.
I hope these few basic suggestions will help you in researching worthwhile refinance lenders.
- Do not get a new finance from your current company if they cannot offer lower interest rates like other firms. They may offer you a deal equivalent to your old one. Never drop a modest interest rate for a similar or higher interest one. Look at the Annualised Percentage Rate of the new refinance. This ought to be lower than the rates stipulated in the former loan.
- Avoid fee-based credit fixing services: they are disreputable. You will likely hear from them only once per month; when their service fee is due.
- Don't fall for tax advantages offered for debt consolidation purposes. Reassess your personal tax position and consider how this will be affected. Unless you diligently itemise your deductions, the tax write-off for your refinance interest is worthless. Deflect dubious brokers. You will know them by the suspiciously low rates they offer.
- Is your goal to lower the periodic payment or to pay back less interest? A lower interest rate can be translated into the same month payment, but with more of the payment being applied to the principal of the loan. This, of course, helps you pay back the debt faster.
- Do your research: As in all other sectors, there is deep competition in lending. You could try for a refinance deal from your current broker, but they might not necessarily offer you the most effective deal.
- Once you choose a company, you need to nail down, _in writing_, the interest rate, closing costs, and pre-payment penalties. If the lender wobbles on these, consider walking away. When it comes to lowering your rates you will need to weigh the benefits of having a lower rate vs. paying points/fees up front. You may end up paying a lot more depending on your choice and how long you plan on keeping your finance going.
- Utilise your rescission rights. If you do not like the way your deal has turned out right before closing, you can still re-negotiate or go back to square one. Do not force it if it is gone sour. Keep in mind that you are given three working days from the date of closing to think things through. In case you decide you do not want the offer, inform the finance officer in writing before the three days are up. In turn, the lender has twenty days to refund your fees.
- Is your goal to lower the monthly payment or to pay less interest? A lower interest rate can be translated into the same monthly payment, but with more of the payment being applied to the principal of the deal. This, of course, helps you pay off the debt faster.
- Consider what kind of interest rate is being offered, whether it is fixed or adjustable. Also consider the finance's annualised percentage rate (APR). The APR reflects all the expenses of the loan, including interest rate, points, provider fees, and extra credit charges.
I hope these few basic suggestions will help you in researching worthwhile refinance lenders.
About the Author:
Nick Svengali is an author for refinance lenders and credit card merchant accounts internet sites in London in the UK.
posted by Debt Consolidation Loan at
1:21 AM
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