Refinancing Your Condo: Five Things You Need To Know

Refinancing your condo can be an investment - not just in real estate - but in your future. Even in the current economy, condo sales are on the rise. Within the past month, US condo sales have jumped by 6.4%. Condos are a worthwhile investment and worthy of refinancing. Before you refinance your condo, however, you should review five basic facts.

Five Things You Need To Know

1. You Need To Stay Calm

Focus on your future! The current condo market is not without its challenges. Increased fees and strict regulations are in place. Yet there are available programs which can ease the burden.
 
Explore the world of refinancing. Home owners generally refinance to lower their costs. Either lowering your interest rate or shortening your loan term will benefit you. Refinancing can also serve as a risk management tool.

If your new loan is an adjustable rate mortgage(ARM), you may want to change to a fixed rate mortgage. Refinancing your condo can help protect you from a sudden rise in interest rates. Refinancing can even help you raise cash or eliminate Private Mortgage Insurance (PMI).

2. You Need To Be Informed

Do research to discover if refinancing is right for you. You shouldn't use it for buying depreciating assets, for vacations or weddings, or for the purposes of consolidating unsecured debt. You need to consider your present rate, balance, loan amount, value, as well as your credit score.

The associated costs of refinancing must be taken into consideration. Legal services and appraisals alone can eat up a huge chunk of cash. Refinancing your condo makes sense if you plan to be its owner for an extended period. The best scenario will see you recovering costs within 24 months.

3. You Need To Get Some Stimulus

Check to see if you qualify to access the recent economic stimulus plan. Your mortgage must be owned by Fannie Mae or Freddie Mac. You have to occupy your condo, be current with payments, and owe between 80%-105% of your mortgage. Refinancing with the help of the stimulus plan can give you a more affordable condo.

This program will only refinance first mortgages and can't be used to access cash. Only mortgages before January 1, 2009 are eligible under this plan. This refinancing assistance expires on June 10, 2010. The Home Affordable Refinance program can play a pivotal role in refinancing your condo.

4. You Need To Size up The State Of Affairs

You need to do your homework before you refinance your condo. Seek out information about any state programs. Different states offer varied refinancing programs. Closing costs can also vary from state to state.

5. You Need To Follow Up

Once you refinance your condo, follow up with responsible choices. Keep on schedule with monthly payments. Invest your savings from the refinancing of your condo. Consider investing back into your home. Building home equity helps you move forward to a secure future. While your investment grows, you will be enjoying the comfortable condo lifestyle!