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Refinancing your mortgage is a very important financial decision and when done incorrectly can cost you thousands of dollars in closing costs and interest payments. When most people begin their loan process the first thing they do is to call local mortgage companies and banks and ask what the current mortgage refinance rates are. While interest rates are a very important part of the mortgage refinance process they are not the only part and by focusing only on rate you could be headed for trouble.

In most cases when you call a mortgage company to check current mortgage refinance rates they will quote you an interest rate that requires points to be paid on the loan. Points are a percentage of the loan amount, so one point is one percent of the total loan amount. Generally a loan where a point is paid will be one half percent lower then a loan where no points are paid.

At first glance the low rate seems to be worth the extra money paid,but what if you refinance again or sell your home before the savings can be to your benefit? For example if you pay $2000 to get a lower rate that lowers your payment by $60 a month you would have to keep that loan for just under 3 years for the savings to take affect, once they do however you would be saving $720 a year.

Statistics show that the average home owner refinances about every 4-5 years and if that statistic applies to you then you should reconsider paying points on a mortgage loan. So do the math and take your situation in consideration when calling for current mortgage refinance rates.

Gain valuable knowledge on How To Refinance a Mortgage to benefit you and not the mortgage company.

Nowadays home equity loans have become increasingly popular and much more useful that in the past years for those homeowners who wish to release some of the capital that is tied up in their homes. Here are some of the details about those such Home Equity Loans, which you may find useful.

The typical home refinance loan comes in two different types, the first type being the one off lump sum payment, the second being a line of equity credit that can be used at anytime the borrower feels necessary.

It is normal practice that the equity can be anything up to 85% of the current market value of your home, minus the existing amount remaining on your mortgage. It is also an advantage for those people who bought their homes some time ago, as those properties have almost certainly increased considerably in value, making this quite a considerable amount of money.

Listed below are some of the advantages of having a home equity loan secured by your home:

1. Free Up Money

Firstly, with a home equity loan, it can be possible to release the funds that are at present tied up in your home, without having the unnecessary inconvenience of selling your property, giving you the opportunity to have those little things in life that you wouldnt normally have the funds to pay for, for example, home improvements, a new car, or maybe that well earned holiday break you have been yearning for.

2. Flexibility

A home equity loan can be tailor-made to suit your personal needs, and budget. Some of the choices that are available include; having an adjustable rate mortgage (ARM) or fixed interest rates, lump sum equity paid to you, or a line of credit allowing you to use the money when you most need and choose to use it, and interest is only paid on the amount that you have borrowed.

It is also possible to negotiate the terms in years for your equity loan. Meaning that the longer period of time your loan is taken out over, the less your repayments are.

3. Consolidate Debts

By having a home equity loan, it is possible to consolidate all of your existing debts into one manageable monthly repayment, which effectively means that you will be paying less interest rates, and charges, a good situation for anyone. Home equity for debt consolidation can also be used to lower monthly repayments on consolidated debt by taking the loan over a longer period of time.

Many people use home equity loans to consolidate consumer debts such as student loans, credit cards, store cards, and personal loans, which are unsecured credit which tend to attract higher rates of interest.

4. Repair Credit

Home refinance loans are also an effective way to repair your existing credit. If you are unable to get credit because of a bad credit history, then chances are, if it is possible that you can afford the monthly repayments, you can still get the funds you need. This is because this kind of financing is secured by your home, making you, as a borrower, less of a risk to lending institutions.

Over time, you can repair your credit history by making regular repayments on a timely basis, which ultimately will increase the likelihood of being eligible for further credit in the future.

5. Investments and Improvements

If you are searching for a way to improve the value of your home by undertaking some renovations, or additions, or getting deposit money to invest in other assets, an equity loan could be the ideal solution for you.

Additionally, if you are planning to sell your home, but need to undertake some improvements prior to putting it on the market, an equity loan is also a wise choice.

As you can see, a home equity loan can enable you to do the things in life that you wish to do whilst also giving you a much better quality of life.

Remember that it can be a very stressing and worrying time, when you have those bills stacking up on the table and no way of paying them. Or your car is more like a Fred Flintstone wagon and you can see no clear way of affording a new one. With the Home Equity Loan, a great weight can be lifted from your shoulders to make your life much more smooth running.

A Home Equity Loan is not only beneficial for you, but also to your children and their education and your future as a family, enabling you to sit back and relax knowing that you have no real worries with your finances. If an emergency should arise, then you have the ready funds.

It is advised that when applying for a Home Equity Loan that firstly you visit a reputable company to receive all of the relevant information that is available to ensure that you are dealing with the loan in the correct manner. Remember that you are dealing with your future and the possible repossession of your home if dealing with a questionable company.

Ken Black is a writer on many financial subjects. Go to Mortgages 101 to find out more about home equity loans and mortgages.