Advantages and Disadvantages of Refinancing Albany NY

Refinancing your mortgage is when you get a new mortgage loan out and use the money from the new loan to pay off your old mortgage loan. In some cases refinancing home loan options are a good idea, and in some cases, refinancing your home loan is not such a good idea. Sometimes, refinancing your mortgage may cost you more money in the long run.


1 . Local Companies

Citizens Bank - Empire Plaza NY
518-434-4186
Concourse Level
Albany, NY
Veterans Homeownership Corporation
(518)783-9798
9 Herbert Drive
Latham, NY
MEM Financial Solutions
(518)688-2073
1480 Route 9
CLIFTON PARK, NY
Commercial Mortgage Network
(518)272-3814
200 Broadway
TROY, NY
Real Estate Mortgage Network Inc
(518) 608-5516
952 Troy Schenectady Rd
Latham, NY
Bank of America - Troy
518.266.0519
59 Third St
Troy, NY
Global Underwriters
(518)877-8557
313 Ushers Rd
Clifton Park, NY
Michael A. Attanasio Agency
(518)266-0311
235 Pawling Ave
Troy, NY
Main Line Mortgage
(518)456-1997
251 New Karner Road
ALBANY, NY
Carteret Mortgage
(518)374-2366
59 Snake Hill Road
SCHENECTADY, NY

2 . Advantages of Refinancing

When the Federal Reserve is cutting interest rates to try to stimulate the economy, you may be wondering if refinancing your mortgage is a good idea. Refinancing home loan options may help you to save money if you are able to get a lower interest rate. You may be able to switch from an adjustable rate mortgage to a fixed rate mortgage with a similar interest rate.

There are advantages in refinancing your home loan if you are planning on staying where you are, and you are currently unable to make your mortgage payments because your adjustable rate mortgage reset itself at a higher interest rate. In some cases, you may pay more over the course of your loan, but this can balance out with the lower payments. Overall, you will want to make sure that refinancing mortgage options will give you lower payments over the course of your loan, or that the savings with the lower payments enable you to save enough money to make up for the cost of refinancing your mortgage loan.

Shopping around for a low fixed rate mortgage can give you low set payments rather than ones that adjust every few months or years. You may be able to find a "no points, no closing costs" mortgage while you are shopping around for a new mortgage. In this case, you will want to thoroughly check the terms of the new mortgage loan to verify that there are no hidden fees or other issues that can cause problems with your refinance.

3 . Disadvantages of Refinancing

In some cases, the disadvantages of refinancing your home loan outweigh the advantages of refinancing. If you are not planning on staying in your home, then refinancing your mortgage can be a very bad idea. As a general rule, the first few months' payments are directed toward the cost of refinancing your home loan. This can mean that you lose money in refinancing your mortgage.

Another time that refinancing your mortgage would be a disadvantage is if you extend the term of the loan. If your mortgage was originally 15 years and you extended it to 30 years with the refinance, you will pay more over the course of the loan. This may seem like an obvious statement, but it's easy to get blinded by the lower payment without looking at the payments over the course of the loan. Unfortunately, this is what got a lot of people in trouble with the sub-prime mortgage mess that the media is focusing on right now.

In some cases, though you may not be able to afford your current payments, refinancing your mortgage is not an option. This is especially true if the value of your house has gone down, but the amount you owe hasn't gone down proportionately.

4 . When Refinancing is Cheaper

It may be difficult to decide when refinancing your mortgage is a good idea. If your mortgage is less than the current appraised value of your home, you may find refinancing your mortgage to be a good idea when the interest rates are going down.

You may refinance for the same amount of time, but a lower interest rate. This can reduce your monthly payments, which would give you more money short term. You may refinance your loan for a shorter term and a shorter interest rate. In both cases, you will save your interest charges minus any refinancing fees. You will need to use a financing calculator online to sort out if it is worth it for you to refinance to the lower interest rate.

When refinancing your home loan, you may decide to refinance the current balance of your loan for the same amount of time as your original loan yet at a lower interest rate. Though this will reduce your mortgage payments, if you are disciplined, you can save yourself more in the long run by paying the same amount as you were paying on your old mortgage.
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Adjustable rate mortgages (also known as ARMs) are one of the most common types of mortgages for homeowners. Adjustable rate mortgages have an adjusting interest rate that is tied to an established index. Your monthly payments will actually vary based upon several factors that are actually beyond your control. The decision between an adjustable rate mortgage and a fixed rate mortgage is a very important one depending upon your financial circumstances. The decision, like any major life decision, requires careful thought and consideration.
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