If you are thinking of mortgage refinance to bail you out of your credit woes, take an honest look at your financial circumstance. Even if you qualify for a loan, there are factors you should carefully consider or you may risk your familys future.
Can you afford the monthly rates?
Prospective borrowers are enticed to latch on to the mortgage refinance train because of the promise of low interest rates. Low interest rates are not always the best deals. There are also points to consider when signing up for years of payback, which is usually about 30 years.
Mortgage rates may vary depending on the mortgage term and the interest rates. If you go for a long term mortgage, which is 30 years, you will be paying $660 monthly compared to the monthly $1,162 for a shorter 15 year loan. But all these will depend on the lender and the prevailing market price.
The first question to ask is: how much loan can I afford? This is a realistic approach to self-assessment. If you are earning a minimal annual income of $22,000, you can qualify for a 30-year loan that requires a monthly payment of $454 or an interest rate of 4%.
The higher the income bracket,...
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