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Archive for May, 2012

How to Refinance Your Second Mortgage?

May 22nd, 2012 No comments

The process of refinancing may not be the best choice for everyone. If you have a second mortgage, you may consider refinancing if you find that it will work in your favor. Your decision to refinance your second mortgage should be based on your financial situation. It is a wise decision to refinance your second mortgage particularly after you find it would be beneficial depending on the value of your home. The other factors that need to be taken into consideration are the loan term period, refinancing costs and the reasons for taking out another loan.

Some of the good reasons why you may choose refinancing are low interest rate, consolidating your first mortgage and reducing the monthly payments. Before you decide to sign a refinance contract, make sure that you know the process of refinancing properly. Once the process starts, there is no way to move back. Read on to know about the process of refinancing.

  • Access your finances and check your credit report – Once you decide to take out a refinance loan for second mortgage, you need to access your finances and review your credit report. If you find any mistake in the credit report, make sure you get it rectified instantly. With good credit score, you will avail better chance to take out a second mortgage refinance loan. Otherwise, you may have to re-evaluate the option since you will hardly get your loan approved. If you want to take out refinance loan with bad credit, you will be required to pay high interest rate on the loan amount.
  • Obtain quotes from more than three loan providers – With good credit score, it is advisable that you obtain quotes from more than three loan providers. You may also enquire about quotes from non-traditional lenders apart from the banks. Make sure you collect information about the entire loan process, the interest rate and other necessary details that you need to know. Use this information to compare between different loan providers and select the most suitable refinance loan. In case you’re not satisfied with the lender whom you have chosen, get quotes from other loan providers and compare between them.

 

  • Apply for the loan and wait to get it approved – Once you choose and apply for a refinance loan, you will have to wait in order to get it approved. The loan provider will provide you a copy of the loan contract that you should read very carefully. Keep a note of the amount that you have borrowed and know if there are any closing costs associated with it. Ask the necessary questions to your lender if you have any doubt about the clauses before you sign up the agreement. Check out the amortization to be needed in order to be sure that you could afford it.

If everything is clear, you will be sure that refinancing would be advantageous for you if you sign the contract. Make sure to note down the repayment plan, structure and the maturity date. In this way, your second mortgage will get refinanced.

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Term Life Insurance as an Alternative to Mortgage Life Insurance

May 9th, 2012 No comments

Whether you are purchasing a home for the first time, or recapitalizing an existing mortgage, someone has possibly recommended you to buy mortgage life insurance, which protects your liability in case you are unable to make payments. But don’t hurry into procuring a policy until you have looked at all the possibilities. You could wind up saving money and getting added life insurance coverage at the same time by buying a term life insurance policy as an alternative.

What is Term Life Insurance?

If you have dependents, you think about buying term life insurance. Term life insurance guarantees that your relations or dependent obtain the money and care they ought to have after your demise. This type of life insurance is the simplest and cheapest and is called “term” because it grants coverage for only a certain number of years (most often 1, 5, 10, 15 or 20 years…depending on the life insurance company). For this reason, it is also called “temporary” insurance. If demise occurs during the term, the policy disburses cash benefits to the recipient. But, once the term is ended, and if the policy is not continued, the coverage concludes. If death takes place after the coverage stops, no cash profits are paid out.

Term life insurance is the most uncomplicated type of life insurance and the simplest to understand. At times it is called “pure” insurance, as the policy don’t have financial investment value and nearly all your premium goes to pay for coverage, with only a little amount used to pay the insurance company’s expenses. If you are seeking for the utmost amount of coverage for your dollar, term life insurance will give you the maximum value for the money spent.

Different Terms for Different Situations

All term life insurance policies cover you for a particular amount of time-the term. The term for you relies upon how old your kids are, how many years before you give up work, and other factors. Many people like to know they are insured until they are all set to stop working, usually at age 65. Some just want to have insurance just before their youngest child graduates from college, and so they ensure that their life insurance coverage incorporates money to disburse for all of the college tuition.

Most specialists have the same opinion that you should bear insurance in any case until your youngest child is 18. So if your child is 3 now, you would want to bear your insurance for at least 15 years. But that in no way means you have to lock into a 15-year term- you could in its place purchase a yearly renewable policy and renew it for 14 years in a line up. You should estimate the total 15 year cost of the yearly renewable policy and the 15-year term policy, making alteration for the value of money and time, to settle on what the appropriate value is for you.

Using Life Insurance for Mortgage Protection

A mortgage is a substantial financial liability which is most likely pivoted upon a steady profit. Without your support, the payments may become tricky or even worse to make, impossible meet. Life insurance can be used as a mortgage payment protection plan.

The Alternative to Mortgage Protection Insurance

If taking out a mortgage has now considerably inserted into your finance, life insurance is even more important. Though some mortgage payments may make premiums for a whole life insurance policy unbelievable, there are cheaper options.

As an alternative to buying a permanent life insurance policy or mortgage protection insurance, search the option of purchasing a term insurance policy for the same duration as your mortgage. This substitute is much less expensive. The premiums will be significantly lower, but the coverage will stay the same.

Once the policy expires, you can then make a decision whether you want to renew or convert the policy or if you would rather stop the policy. This way ensures mortgage protection at the lowest cost.

The Cheapest Alternative:

The superlative choice, in terms of cost, is decreasing term life insurance, If the only reason for buying a life insurance policy is for mortgage protection, spending in this type of term insurance is your best bet.

At the start of your mortgage, you owe the majority to your lender and your mortgage protection should replicate that. But, as after few years of making payments, you will owe considerably less, so decreasing your protection is a valid move. A decreasing term life insurance policy permits this.

You can plan your life insurance policy so that your protection is the unchanged amount as your debt. Though the premiums do not diminish over time, your mortgage life insurance quote will be significantly lower than if the quote you would obtain if the policy’s coverage were level all through its term. Some policies yearly premiums are the same as the level coverage, but the payments stop former than their policy. For instance, the premiums on a 20 year mortgage protection insurance policy are necessary to be remunerated for only 16 years even though the coverage will last all 20 years.

Why You Should Consider Buying Term Life Insurance?

If you are now bearing in mind term life insurance, there are few things you can do to get improved rates. You need to start living a healthier lifestyle. If you smoke, give up. If you are beyond your ideal weight, shed off some pounds. Suppliers of term life health insurance really like people who take care of themselves and provide them lower rates than people who do not.

Term life insurance lets you get the most possible insurance for the money. It should be attained by families that have current and future financial requirements but have not yet grown the possessions to accomplish those obligations if they should die too early.