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Can I refinance after
bankruptcy?
ANSWER: Refinancing may be prudent but could
be difficult after a bankruptcy. If you're considering
bankruptcy, you may want to go to your current lender
first and explain the situation. If you have been
current on your payments, the lender may be
accommodating and refinance your loan, easing your
financial situation.
What about these ads for no-cost loans?
ANSWER: In many states, real estate
regulatory agencies are cracking down on such
advertising. The very term, "no-cost" loan, is
misleading because borrowers are actually paying a
higher interest rate in exchange for not having to pay
fees or closing costs up front when the loan is secured.
A "no-points" loan is one for which the lender does not
charge points (one point is equal to 1 percent of the
loan amount). But there are other fees involved in
no-point loans, as with most loans.
When is the best time to refinance?
ANSWER: It depends on how long you plan to
hold on to your house and if you have to pay anything to
refinance. In addition, it also depends on how far along
you are in paying off your current mortgage. If you are
going to be selling your house shortly, you probably
will not recoup any costs you incur to refinance your
mortgage. If you are more than halfway through paying
your current mortgage, you probably will gain little by
refinancing. However, if you are going to own your home
for at least five years, that's probably long enough to
recoup any refinancing costs you incur and to realize
real savings on lowering your monthly payment. If it is
going to cost you nothing to refinance, you can gain
even more. Many lenders will allow you to roll the costs
of the refinancing into the new note and still reduce
the amount of the monthly payment. Also, there are
no-cost refinancing deals available. In any case, it
pays to consult your lender or financial advisor, or run
the numbers yourself, before you refinance
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