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When Is The Time To Refinance Your Home?

Home MortgageThe biggest household expense for any homeowner is the monthly home mortgage. Typically, this cost accounts for 20-30% of the household’s net income. It’s a hefty expense so it should be without a doubt, one of the first things to tackle when you are trying to lower your monthly expenses. To lower the cost, you just need to think about refinancing. The question is: when do you refinance?

Adjustable Mortgages

Well, before you do anything, you need to find out what type of loan you have. The 2 most common types of loans for a home are the adjustable rate mortgage and the fixed rate mortgage loan. The adjustable rate mortgage will give you a clear indication of when the best time to refinance is. With this type of loan, the interest rate increases incrementally over time. For example, with a 2-year adjustable mortgage, the rate will adjust after 2 years. In this case, you will most certainly want to refinance your home loan before the rate adjusts.

Fixed Rate Mortgages

With a fixed rate home mortgage, you have a little more of a range to choose from. One thing to keep in mind is the 2-year adjustment comes into play here too. It is usually too costly to refinance any sooner than 2 years. The reason is because of all the closing costs that are associated with refinancing. The good news is that you can refinance at any time beyond the first 2years. The question then becomes: when is a good time?

Closing Costs

The first thing to do is to find out roughly how much it will cost you to close on the new loan. Now the numbers will only be estimates since nothing is written in stone until you sign the real loan documents. The next step is to compute the monthly mortgage payments based on the new interest rates. There are mortgage calculators that will help calculate this figure for you. The final thing to do is to take the difference in the monthly mortgage amount and calculate how long it would take you to recoup the cost of closing with the money that you save each month.

One caveat to all of this your credit scores. Without a good one, a refinance is hard to come by. If you find yourself in that position, you need to go on a crash program to improve. Since getting a loan and paying it back on time is one of the best ways to improve your score, you may wish to talk to the folks at Embassy Loans about an auto title loan that will put you on the right path.



Embassy Loans is a leading provider of auto title loans since 2005

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Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

Monthly Interest Rates range from 1.5% to 2.5% (18% to 30% APR), with 15-18 Month Terms.

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Embassy Loans uses “Title Loans” for advertisement purposes only and provides auto equity loans. Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” under Florida Statute 516 and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

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Frequently Asked Questions

What is an Auto Equity Loan?

An auto equity loan, sometimes known as a car title loan or a car equity loan, is a type of loan that allows you to borrow money by using your vehicle as collateral. The loan is secured by your vehicle, meaning you agree to use the equity in your car to back the loan. 

What is an Unsecured Personal Loan

An unsecured personal loan is a loan that does not require collateral. Funds are provided based on your credit worthiness and your ability to repay. 

What Is the Credit Builder Program

The credit builder program is designed to help individuals establish or improve their credit score with the primary purpose of building a positive credit history through regular payments.

Can i have more than one Loan at a time?

Embassy Loans can only extend one loan at a time and it’s advisable to start with one and focus on making payments in a timely manner to prevent default.

What happens if I miss a payment?

Missing a payment can have negative consequences, including late fees, a drop in your credit score, and potential default on the loan. Consistent, on-time payments are crucial to benefit from the program.