 Refinancing
your home can be an excellent way to bring down your monthly
mortgage payment, raise cash, or consolidate debts with high
interest rates. However, you need to do your homework before
deciding to refinance. One important factor is the difference
between current interest rates and the rate of your original
loan. You also need to take into account the amount of time
it will take to recoup the costs of refinancing.
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 Saving funds for a down payment
should be part of an overall program to get your finances
in order prior to shopping for a home. This includes rounding
up financial records, examining your spending habits, and
setting a budget you can live with. Remember, too, that the
down payment is not the only up-front expense. An allowance
for closing costs should also be included in your savings
budget.
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 A
crucial step in starting your search for a new home is having
a clear idea of your financial situation. By getting a handle
on your income, expenses and debts, you'll have a much better
idea of what you can afford and how much you'll need to borrow.
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 When
it comes to comparing interest rates for a mortgage loan,
homebuyers often have the option of choosing a loan with a
lower interest rate by paying points. Simply put, a point
is equal to 1 percent of the loan amount. For example, with
a $100,000 loan, one point equals $1,000. Points are usually
paid out-of-pocket by the buyer at closing.
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 One of the greatest financial aspects of buying a home is the
ability to leverage your money. Simply put, leverage allows
you to use a small down payment and financing to purchase
a larger investment. For example, if you bought a $125,000
home with 10 percent down, you leveraged the $12,500 down
payment to purchase an asset worth 10 times that amount!
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 Adjustable-rate mortgages (ARMs) differ
from fixed-rate mortgages in that the interest rate and monthly
payment can change over the life of the loan. ARMs also generally
have lower introductory interest rates vs. fixed-rate mortgages.
Before deciding on an ARM, key factors to consider include
how long you plan to own the property, and how frequently
your monthly payment may change.
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 Today's
homebuyer has more financing options than have ever been available
before. From traditional mortgages to adjustable-rate and
hybrid loans, there are financing packages designed to meet
the needs of virtually anyone.
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 Excluding
property taxes and insurance, a traditional fixed-rate mortgage
payment consist of two parts: (1) interest on the loan and
(2) payment towards the principal, or unpaid balance of the
loan. Many people are surprised to learn, however, that the
amount you pay towards interest and principal varies dramatically
over time. This is because mortgage loans work in such a way
that the early payments are primarily in interest, and the
later payments are primarily towards the principal.
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 In the past, the 30-year,
fixed-rate mortgage was the standard choice for most homebuyers.
Today, however, lenders offer a wide array of loan types in
varying lengths--including 15, 20, 30 and even 40-year mortgages.
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 As
part of the loan application process, virtually all lenders
will want to see a copy of your credit report. The report
will list all your long-term debts (credit cards, mortgage
payments, automobile and student loans, etc), as well as your
payment history. If you don't have a copy of your credit report,
most lenders will generally require you to pay for a copy
when they process your loan application.
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