Reduce Monthly Payments Top Reason to Refinance, Says New GuideToLenders.com Poll
Homeowners increasingly point to the reduction of monthly payments as their top reason for refinancing, according to GuideToLenders.com, an online consumer resource for obtaining competing mortgage quotes. Response data showed that while just over 20 percent of homeowners polled in February thought that lowering payments was the top reason for a mortgage refinance, nearly 30 percent did in April. As payments rise due to rate increases in adjustable rate mortgages (ARMs) and payment changes in option ARMs and interest-only mortgages, borrowers feeling the pinch may consider a home mortgage refinance in order to stabilize their finances and reduce their monthly payments.
(PRWEB) May 24, 2007 -- According to a new poll by GuideToLenders.com, an online consumer resource for obtaining competing mortgage quotes, the top reason given for mortgage refinancing was to reduce monthly mortgage payments (http://GuideToLenders.com). Nearly 30 percent of respondents in April 2007 cited payment reduction as the top reason for refinancing a mortgage, up from just over 20 percent in February.
Adjustable rate mortgages (ARMs) account for nearly 25 percent of all home loans nationwide. In areas with higher prices, however, they have been much more popular. Many borrowers, especially first time homebuyers, did not fully understand the implications of the interest rate or payment adjustments of these loans and are looking for a way to reduce their monthly payments now.
Some considerations in the decision to refinance a mortgage are:
| | - The date of an impending interest rate reset.
- Rate, payment or adjustment cap features of the loan.
- The length of time the borrowers plan to keep the property.
- The desire to consolidate other debt into a new mortgage.
- The presence or absence of a pre-payment penalty.
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Additionally, according to GuideToRealty.com, some first time homebuyers don't consider all the costs of home ownership, including insurance and maintenance, and find themselves financially strapped by unexpected expenses (http://guidetorealty.com/calculators/costownerhip.jsp). This may be further exacerbated by increases in interest rates. Refinancing to lower their total monthly payments may forestall financial trouble for these homeowners.
According to GuideToLenders.com, borrowers should evaluate their ARMs before the loans reset, review the terms of the loans and get an idea of what their new interest rates and payments will be. Both GuideToRealty.com (http://GuideToRealty.com) and GuideToLenders.com feature mortgage calculators that can help homeowners determine whether to undertake a mortgage refinance.
GuideToLenders.com is a consumer resource featuring guides on how to find the right lender or broker to provide options to best suit consumers' needs. The site has a variety of free tools and tips and provides an easy way to find multiple lenders to help consumers with their lending needs. Products offered by the lenders/brokers include new home financing, refinancing, home equity line of credit and debt consolidation loans.
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