you want to refinance.
The number one reason people refinance is to lower the rate they are paying
on their existing mortgage.
lowering your interest
rate you are in a sense lowering the fee the lender is charging you
to borrow the money. Refinancing will save you money on a monthly basis,
and literally thousands of dollars over the life of the loan.
people refinance is because their original mortgage was a special product
such as an interest only mortgage or an adjustable
rate mortgage. (ARM)
be sure there isn’t a prepayment
penalty on your existing mortgage. A
lot of mortgages do have prepayment penalties for the first three to five
years, so make sure you don’t have one.
is the act of acquiring a home mortgage loan in order to pay off your
is normally done for different reasons.
name a few, people will refinance their existing loans to get a better
rate to save money on interest charges. This serves two purposes. It will
ultimately save them money on their monthly
payment, and it will save them a lot of cash over the life of the
loan in finance charges.
are also known to refinance after having lived in their home long enough
to have acquired some
equity. They refinance in order to liquidate some of that equity,
and use the money to do home
improvements, pay college tuition, or pay down some credit
card bills, etc.
in order to liquidate your equity can be done in one of two ways. You
can get one loan to pay off your existing mortgage, with enough cash back
to accommodate whatever other financial needs you had in mind.
. . .
can get a home
equity loan or second
mortgage. This is a best case scenario if you are happy with your
first mortgage and would like to leave it the way it is. The home equity
loan is also recommended if you are looking for a small amount of cash,
or if you need cash but don’t want to use it immediately.
Rate vs. Variable Rate Mortgages