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Many homeowners are considering taking advantage of today’s historically low interest rates by refinancing their mortgage. In many cases, they are able to save hundreds of dollars per month by refinancing. Whether mortgage refinancing makes sense for you can be easily determined by doing some simple math.

The first consideration is how much lower your new interest rate should be than your current rate. There is a common belief that if current rates are more than 1.5 to 2 percentage points lower than your current rate, then you should refinance. That’s a good starting point, but there is more to the story than just the raw interest rate.

Your real concern should be the total cost of the mortgage refinance both in the short term and the long term. The total cost includes not only the monthly mortgage payment (principal plus interest), but the closing costs, as well. Closing costs typically include such things as:

 

 

• Appraisal fee

 

 

• Credit Report fee

 

 

• Processing fee

 

 

• Commitment fee

 

 

• Tax Service fee

 

 

• Flood Certification fee

 

 

• Discount points (if any)

 

 

• Title Insurance (based on mortgage amount)

 

 

• Recording/Notary fee

 

 

• Per diem Interest

 

 

• Real Estate Taxes

 

 

• Home Insurance (percentage of mortgage amount)

 

 

Adding all these up can easily run into several thousand dollars, even without discount points. This is money that must be paid at the loan closing. In the case of a mortgage refinancing, lenders often advertise “no closing costs”, which is a bit misleading. The truth is that there ARE closing costs, but they are paid out of the proceeds of the loan rather than the pocket of the homeowner. This is possible when the homeowner borrows against the equity in their home as part of the refinancing.

As an example, let’s say that your home is worth $175,000. Your original mortgage was for $125,000 over 30 years at 7% interest. You still owe $100,000 on the original mortgage. The closing costs for your refinance are $3,000. If you simply refinance the $100,000 amount at a lower interest rate you will reduce your monthly payments, but you will have to pay the $3,000 closing costs out of your own pocket. If you choose the “no closing costs” option, your $3,000 closing costs will be paid by simply borrowing the additional money against the equity in your home (i.e. the value of your home less the amount owed). Your mortgage will now be for $103,000 instead of $100,000.

So, what about that widely held 2 percentage points belief we mentioned earlier? The monthly payment for a 30-year $125,000 mortgage at 7% interest is $831.63. For your new 30-year $100,000 loan at 5% interest, the monthly payment is $536.82, a savings of almost $300 per month. If the new mortgage is $103,000, the monthly payment is $552.93, still saving you over $275 per month. In this scenario, considering only the monthly savings, you would recoup your closing costs in as little as 10 months.

Sounds great, right? Well, there’s another factor you need to consider. If your original mortgage was $125,000, you’ve been paying on it for 152 months to get the principal balance down to $100,000. Therefore, you have 208 months left before the mortgage is paid off under the original terms. If you continue without refinancing, you’ll pay an additional $172,978 (208 months at $831.63 per month).

If you refinance your mortgage for the $100,000 you currently owe, you’ll pay on it for 360 months at $536.82 plus the $3,000 closing costs for a total of $196,255.

$172,978 <– payout without refinancing

-196,255 <– payout after refinancing

-$23,277 <– difference

In this case, by refinancing you will end up paying an additional $23,277 for the new loan over the original mortgage. This works out to about $775 per year, which may be acceptable to you in order to have the lower monthly payment now. You are the only one who can make that decision based on your personal financial situation. The important thing when refinancing your mortgage is to consider all the ramifications.

This is another of today’s money secrets that can help you get the most for your money in today’s lending market!

Is it really possible to do a free mobile phone lookup on the world wide web? So many of us have been dismayed or discouraged previously with websites that appear to provide free services online, but in actuality don’t. Is this the case for the cell phone lookup?

First let’s define what we mean by a phone number search. Let’s say you have the home phone number but no idea who the number belongs to. You may use a reverse lookup site like Yellowbook to see the details. This can be very useful in situations where you lost contact with someone but still have their number, or just to see who owns the number. There are many places where you can make these residential and business phone inquiries online queries at no cost, including toll-free phone numbers.

However, trouble arises when you need to do a reverse lookup on a cell phone as the free listings will not contain such phone numbers. So, if you’re trying to find an Ohio cell phone number you may have a problem. These databases do not contain cell phone numbers as this information is exclusively in the hands of carriers and telecommunications companies. Do these documents exist & are they available free?

The good news is that there are sites that offer a large number of cell numbers, but they aren’t free. These programs naturally need to pay a premium to gain access to some of this data, and go to the trouble and cost of retrieving all resources into a single location and therefore, you must pay a small fee for access to their database. However, the cost is typically a one-time purchase and you can do as many searches as you want. These records generally include cell owner details, address history, carrier information, and the phone type and connection status. We should mention that the databases offered by each company differ to some extent, but most include cell phone numbers, residential, business, fax, toll-free and pagers. With these sites your searches are guaranteed legal & confidential.

We’ve seen programs claiming to provide free cell research, but that has always led to programs charging a fee in the end. Some do allow people to search for free and then see the results. The sad truth is that the only place where you can find detailed reverse cell records is within the legitimate paid directories. In conclusion, cell phone searches are not free. However, if you really need access to this information, we think that it is worth the fee.