Refinancing
your home. Refinance Mortgage Loans Refinancing
is the process of applying for a home mortgage, typically at a different rate
of interest than the existing mortgage, to pay off debts and/or to liquidate some
or all of the equity that has accumulated in real property during the tenure of
ownership. It is advisable to speak with a mortgage professional, familiar with
your existing home loan, before deciding to refinance as certain types of home
loans contain penalty clauses that are triggered by an early payment of the loan,
either in its entirety or a specified portion. Interest
rates are at one of their lowest points in years, but that doesn't guarantee theyll
stay there. By refinancing your mortgage now, you may be able to: - Lower
your monthly payment.
- Reduce
your term and pay off your mortgage years sooner.
- Save
thousands in interest over the life of your loan.
- Use
a portion of your new mortgage to consolidate debts at a lower rate or remodel
your home.
Refinancing
Advantages There are a number of reasons why you might benefit from refinancing
your home. First of all, you could take advantage of the low mortgage rates that
are being offered. Refinancing your mortgage when rates are down could save you
hundreds of dollars every month and thousands of dollars over the life of your
loan. An adjustable rate mortgage (ARM) fluctuates with changes in the market
rates. Therefore, if you currently have an ARM, your monthly payments are likely
to go up as interest rates increase. By switching to a fixed-rate mortgage, you’ll
gain the security of a low, fixed rate that stays low. When interest rates are
falling, one of the major benefits to refinancing is to be able to lock in a low
interest rate for the duration of your loan. Another
advantage to refinancing your home is to reduce the term of your mortgage to build
equity faster. You could also choose to use the equity in your home to get cash
for another purpose. Perhaps you need to add a room to your house because your
parents are moving in, or you just had a new baby. A refinance could allow you
to draw on the equity in your home as a means to add a room to the house, or even
to buy a car or boat. Before you make the decision to refinance, it will be necessary
for you to evaluate whether the costs for refinancing make sense for your particular
situation. For instance, if your new rate is less than 1%, the benefits to refinancing
may not exceed the costs. However, the numerous advantages to refinancing may
make it worthwhile for you to consider taking this step, especially while interest
rates are at their current low. Madison
Hunter, Inc. is a licensed Real Estate Broker with the California Department of
Real Estate License# 01444750 |
