Is Refinancing Going to Help Save on Your Mortgage?

Are you bogged down in debt?  Are your monthly home mortgage payments rising each year and getting harder and harder to pay?  If this situation sounds familiar, you may have considered refinancing your mortgage.  But, will it help?

When you refinance you’re simply taking out a new loan to pay off the existing one.  It only makes sense to do this if you obtain a lower interest rate enabling you to save money.

Usually, there are two good times to refinance.  If you have an adjustable rate mortgage (ARM) and you’re faced with a continual interest rate rise.  You can refinance to obtain a fixed rate mortgage and avoid the higher payments.

Even if you already have a fixed rate mortgage, it might pay you to refinance if you can secure a lower interest rate.  If you’re experiencing a cash flow problem and want to refinance to lower the payments by extending the term of your loan this is not a good reason.  With an extended term you’ll be paying more over the years remaining that you own the home.

Calculate the cost of refinancing.  It won’t come free you know.  There are various fees such as points, application and recording fees, title search and PMI fees.  Other closing costs you may have to pay are survey and appraisal charges.

You usually have to pay for private mortgage insurance (PMI) if the loan to value ratio is greater than 80% of the appraised value.  It’s to your advantage to pay the loan down as soon as possible to avoid PMI.

A cash-out financing arrangement may be suitable if you’re disciplined on how you spend your extra money.  A cash-out deal is when you refinance and borrow more than you owe.  Pay off the existing mortgage and any excess money is yours to use however you wish such as paying off credit card debt.

If you make the decision to refinance, make sure you save enough to recover the cost. It could be just a break-even proposition.  Usually, a good rule of thumb is not to refinance if you plan to move within five years.  It probably will take at least that long to recoup the expenditures.  Calculate this to be sure.

Use a refinancing loan calculator to determine if a new loan is feasible.  Your lender will be happy to let you use theirs or you can access one on the Internet.  They’re easy to use, just plug in the pertinent loan information

Remember that your refinanced mortgage will be secured by a lien on your home.  If for some reason you’re unable to make payments the lender can foreclose and possibly sell your home to pay off the mortgage.

The decision to refinance should not be taken lightly.  Examine each avenue thoroughly.  Educate yourself on each step.  Ask for advice.  If the move is right, it could lift you out of debt and help make you a happy homeowner.

Reclaiming Your Attic

It’s up there, waiting for you. Unused, unloved, it is little more than a repository for the cast of clutter of your life: what a waste. But it doesn’t have to be this way: you can reclaim your attic, fix it up, decorate it, and turn it into any kind of space that you can imagine. All you have to do is determine what you want, and then follow through.

One of the great things about the attic is that it is pretty much extra space. You have a home with a certain number of bedrooms, bathrooms, a kitchen, possibly a den, but the attic is like a wild card. Up there, you can do any frivolous thing that you want. You can create a secret haven, build a place for your friends to hang out, create an art gallery of quirky home décor items, or design an extra guest bedroom, the decision is entirely yours.

However there are a number of factors that are specific to the attic, which you have to consider when extending your functional home to this lofty height. The first, and most important, is the health and safety of the space.

Many attics suffer from exposed insulation. This pink fluffy stuff is what keeps your home from losing heat. Unfortunately it is quite hazardous and can cause an itchy rash if touched, and even worse health problems if inhaled. Before you will be able to reclaim the attic, you will have to make sure that all of your insulation is safely hidden behind plywood or drywall sheets.

Other dangerous conditions that can develop in an attic include mold, water damage, insects, and vermin. There can also be weaknesses in the walls, and leaks in the ceiling. Be certain to inspect the space thoroughly before you start planning a room around it, and take care of any potential health hazards right from the beginning.

Another consideration when trying to make the attic functional is temperature. In some cases the attic won’t be properly insulated. In these cases, the space can become quite cold in the winter. This can be offset to some extent by lining the walls in blankets, and sealing off windows and other openings, but there really is no substitute for a properly insulated attic space.

On the other hand, if the attic is insulated, then it can suffer from an excess of heat. Since heat rises and this space is at the top of the house, all of the heat that is used to warm up the home will eventually end up in the attic. This can make the place sweltering. Make sure that any windows you may have can be easily opened, and use fans to keep the space ventilated. You may also want to consider an air conditioning unit.

In some cases the ceiling of the attic will slope, often at uncomfortably steep angles, following the line of the buildings roof. This may mean that your walls are actually only a few feet tall, and it may only be possible to stand up in certain central parts of the room. Unfortunately, this will make most of the floor space in the room unusable.

One way to turn this to your advantage is to design an attic space that is cozy, and low to the ground. Thick carpeting will make it easy for people if they have to crawl around the space on hands and knees. A series of low couches, or even just couch cushions, spread throughout the attic can give it a lounge feel. In this way you can use the low ceiling to your advantage, making the space seem cozy and enveloping.

The attic is up there, you really shouldn’t just ignore it. It is a wealth of space which you can turn into a spare bedroom, a home office, or even a hobby center. All it requires is a few simple considerations, and some time and effort on your part, and you can turn your attic into your favorite room in the house.