Lowering A Monthly Mortgage Payment With Refinancing–Are Homeowners Still Finding Affordability When Refinancing?

Lowering a monthly mortgage payment through refinancing has still been helpful for some homeowners in certain positions, despite the fact that there have been issues within the housing market that have not only prevented some homeowners from refinancing entirely, but factors like rising interest rates have led to some individuals being in a position where they will not benefit from refinancing at the present time. However, there are also issues surrounding homeowner refinancing and even the purchasing of a new home that may lead to higher costs in the coming months if homeowners delay in either purchasing or refinancing their mortgage, and as a result, advisers are prompting homeowners who may be considering refinancing their home loan to explore all aspects of how it may affect their financial life now and in the future.

Yet, according to an article on HousingWire.com, refinancing activity has increased slightly from last week, according to data collected for the week ending April 15, 2011, but when it comes to refinancing a home loan some homeowners may not be seeing as many benefits as were available last year when home loan interest rates were at record lows. However, there are still options for homeowners to refinance to a longer mortgage, as an example, and possibly get a lower monthly payment, but this again has led to the need for homeowners to look at their financial situation.

Homeowners who do refinance usually are in either one of two categories, where they either want a more affordable monthly mortgage payment or they are looking to erase their debt in a timely manner by shortening their home loan repayment term. As an example, homeowners have, in the past months, used refinancing to a longer mortgage like a 20-year or 30-year fixed rate as a way to get a lower monthly payment on their home loan when they may be in a difficult financial position or simply looking to take advantage of a lower home loan interest rate. However, there are homeowners who are in a position where they can afford a higher payment on their mortgage and have refinanced to a shorter mortgage term, like a 15-year fixed rate home loan, as a way to get out of mortgage debt faster and lower the overall costs they will meet.

While interest rates have risen from their record lows that were seen last year, some homeowners may still be in a position to refinance for a lower rate than what they currently have and, in the process, achieve more affordability on their home loan payment through either monthly payment reductions or overall cost reductions when a shorter mortgage term is chosen. Sadly though, there are homeowners who are still suffering from negative equity that have been unable to refinance traditionally, but have opted to research principal reduction programs that may be available when they are having trouble meeting their payment as a result of devaluation in their property.

However, homeowners who are considering refinancing are still being prompted to review their financial position to make sure that they will not only benefit from doing so, by either obtaining a lower mortgage interest rate or monthly mortgage payment, depending on their goals, but homeowners must make sure that they have a good credit score, can simply qualify for a lower rate, and can afford the costs that come with refinancing. Some homeowners may find that these refinancing costs, which are reportedly on the rise, may offset any benefits from refinancing and would therefore be unhelpful, but this again is dependent upon a homeowner’s individual situation and must be reviewed before a homeowner makes a decision on whether to refinance their home loan or not.