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When you refinance a mortgage, you are converting the mortgage you already have into a new loan. The new loan usually has more favorable terms, such as a lower interest rate, that make refinancing worthwhile. Refinancing can have several important benefits, most of which add up to money saved over the life of the loan.

Refinancing helps you save money

Most people who refinance do so because the new mortgage will save money, usually because refinancing will allow them to lock in a lower interest rate than the one they currently have. Refinancing can help you save a significant amount of money over the life of the loan, even if the interest rate reduction is small. If you have a mortgage of several hundred thousand dollars, even a small interest rate reduction can save you thousands of dollars in interest. In fact, reducing your interest rate by just one point could save you around $5,000 on a fifteen year mortgage.

Refinancing can save you money in other ways, too, even if you are not able to lock in a lower interest rate. If your current mortgage is sub-prime because your credit rating was poor when you took out the loan, for example, refinancing could save a considerable amount of money if you’ve built up a better credit rating.

Refinancing can reduce the term of your mortgage

The potential to save a significant amount of money is the most obvious advantage of refinancing, but there is another important benefit that is often overlooked. This is the ability to refinance to a mortgage with reduced terms. For example, if you are able to refinance from a 30 year to a 20 or even 15 year mortgage, you’ll own your home outright in much less time.

Don’t forget, however, that reducing the terms of your mortgage mean your monthly payments increase. If you’re refinancing for this reason, it is important that you know your finances will remain secure enough that you can continue to meet the higher monthly repayments. The good news is refinancing for this reason is actually another way you can save money on your mortgage. Even though your monthly repayments are higher, reducing the term means you’ll pay significantly less money in interest over the life of the loan.

Refinancing lets you switch mortgage types

One of the main reasons many people refinance is to switch to a different mortgage type, for example from an adjustable rate mortgage to a fixed rate mortgage. Taking out an adjustable rate mortgage is an attractive option, especially for first time home buyers, since securing a low interest rate means lower repayments. However, many homeowners later feel that they would prefer the security of a fixed rate mortgage. Refinancing means that it’s possible to switch from an adjustable to a fixed interest rate, or vice versa, to ensure you have the mortgage that most benefits you. When is a good time to switch? It depends on many things, including your current financial situation, the state of the economy, and how long you plan to live in the home.

Refinancing can free up equity in your home

As you make mortgage payments over the months and years of the loan, you build up equity in your home. Every payment you make means you own a little bit more of the equity, and sometimes, it can be financially beneficial to tap into that equity. If you want to make improvements to increase the value of your home, fund college for your kids, or consolidate debts, for example, equity release can provide the necessary cash.

If you can get a lower interest rate when you are accessing the equity, so much the better – this will help compensate for the fact that removing some of the equity extends the life of the loan.

Time to Refinance?

Most homeowners will refinance a mortgage at least once, and statistics say that the average homeowner refinances their home every four years. That might seem a little high, but given that refinancing has so many benefits, it’s not difficult to see why refinancing is a popular option.

So when is refinancing a good idea? Look to the above list to determine when is the right time to refinance. If you can benefit by lowering your interest rate, reducing the terms of your mortgage, or switching to a more favorable mortgage type, or if you need to access some of the equity you’ve built up in your home, refinancing could be a good option.

These are not the only points to consider, of course, but they are a good starting point to think about if you are wondering whether refinancing will work for you.

Rachel Jackson is a freelance writer who writes about financial products pertaining to the mortgage industry such as the lowest mortgage rates.

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# posted by David @ 10:28 AM 0 Comments

You've probably seen the adverts on television for car insurance especially for women, where three glamorous blonde women are sitting pretty in a bubblegum-pink car.These good-time girls are contrasted to a miserable group of Australian sheep station guys left out of this cheap women-only car insurance deal.

Sisters are insuring it for them, the message is clear - they can get better deals.But is this female-friendly advertising just another marketing ploy or is their a real benefit for female motorists?

Most insurance companies recognise that women are cheaper to insure and their policy costs reflect this.Certainly this is the case until women reach middle age, according to research by the AA (based on quotes for men and women, driving a Ford Focus and living in Cambridgeshire).For young drivers, age 17, the insurance cost for a woman is 1,938.13 pounds per annum, for men this figure rises by almost 1,000 to 2,906.25 pounds.At age 30, the cost for women is still over 40 pounds cheaper at 367 pounds.By the age of 40 the saving falls to just over 7 pounds.For men and women of 50 years old, the cost for women is just 45 pence cheaper.And by the age of 60, men (for the first time) can enjoy a 7 pounds 30 pence advantage over their female counterparts when their insurance premium reaches 245.40 pounds.

The promise of cheaper deals is based on the fact that, on average, women don't have as many serious accidents and therefore should be less risky and less expensive drivers to insure.There is also clear evidence that when it comes to bad driving, men are way out in front.Annual statistics from the Home Office reveal that almost three quarters of speeding offences, 96% of dangerous driving offences and 85% of careless driving were committed by men.

Some insurers also market the idea that car insurance can be tailored to women's individual needs.One women's insurer provides 300 pounds for handbag insurance as well as counselling phone line after accidents and a promise of repair practices that are women-friendly.(I wonder how a women-friendly car repair service works.The mind boggles!).I suppose that they could ensure that cars can be available to be collected from garages in daylight or in time for a daily school run.

Another insurance company, a pioneer of car insurance for women, believes that dedicated services for women form part of a wider social change.The majority of women now have a driving licence (61 per cent of women compared to just over four fifths of men) and insurance that is female friendly and /or exclusively for females simply reflects the rise in the number of single female households and women who own their own car.

Certainly, women friendly insurance companies offer some of the cheapest deals in the marketplace but other, non-specialist companies disagree that gender- specific insurance gives the consumer much extra.General insurers warn that these women only brands are just part of a clever advertising campaign.

It is true that it can be misleading to draw general conclusions about the price of car insurance.Altering a few variables like occupation and age can reveal different results.Comparisons show that your postcode, for example, is far more significant than gender.Living in Liverpool can more than double the cost of your insurance whereas living in a rural, low-crime area such as Norfolk will bring the cost of your premiums right down.

The best advice is to check out exactly what is on offer from the insurers and see how it best meets your own individual requirements.

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# posted by David @ 4:48 PM 0 Comments

Years ago, whenever my late father saw news of bad weather in the USA, hed say Well get it next!if the same is true of their reported health insurance fraud, maybe wed better watch out.

The facts seem to be that as long as you take out health insurance and stay healthy, youre fine.They draw your premiums, you dont need the care.Its all perfectly understandable and clear.Everyones happy.

The problems start when you need care.In the USA you pay the doctor per visit.If youre insured, then with most schemes you send in the account to your health insurance company and wait for the settlement cheque.Apparently the next thing thats likely to happen is that you get a letter from the company saying that the claim is rejected.

At this stage some people back out.Its not a major amount of money and maybe theyre feeling fine now.It doesnt seem worth the hassle and so it gets left and the insurance company are feeling better too, having gained, or rather saved, some money for the cost of a letter.

Other people are rather keener to get some of their insurance costs back and follow up the letter by asking the reason for rejection of the claim.Commonly, the insurer issues a form for the doctor to fill in, which you duly take to the doctors and in time the insurer receives it.You hear no more.Again, some people leave it at this, but those that dont reckon that when they follow it up, the insurer denies having received the form.This may happen a couple of times and must be a major source of annoyance to a busy doctor.Still no cheque is forthcoming.Follow up enquiries usually bring forward the excuse of the doctor filling in the form incorrectly, or using the wrong form.Any old excuse, but no cheque.

The very persistent people probably manage to get a pay-out in the end, but some people, particularly if they lead busy lives, or are unwell are just not able to follow it up and so they lost out

As far as the insurers are concerned they cant lose by issuing a denial letter.

If the insured persons kick up enough fuss, they pay out but only the amount that they should have paid in the first place and theyre no worse off.

What is not known is how often this happens also insurers, unless pushed, dont tell you why the claim has been turned down.

This, it seems, is the tip of the iceberg.There were a lot more little tricks of the trade exposed in the article.Its frightening to realize that this fraud is going on, in the name of health care.

As far as the UK is concerned, were lucky.Good advice is freely available, from a professional advisor, who knows all about the market in health.It can be found at the click of your mouse.Health insurance can be as comprehensive as you want it to be.Just find an independent insurance broker wholl come up with some competitive quotes with some reliable companies, where youll get exactly what is promised.Read the small print for yourself.Note any exclusion clauses.Fill in any forms with complete honesty.Protect yourself.Get it right, then relax!

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# posted by David @ 6:17 AM 0 Comments