All you need to know about a refinance mortgage loan
Save Money – Refinance Your Mortgage!
Monthly payments are getting difficult to keep up with in this economy. Consider refinancing if you are having difficulty meeting your monthly payments. By getting a lower interest rate you can save substantially on your monthly payments. But be careful about low interest 3 or 5 year ARM loans in this economy with lower interest rates it is best to get a fixed interest loan that you can afford.
When Interest Rates are Low Refinancing Can Save You Money
If you got a loan when interest rates were higher and you have owned your home long enough to have some equity then you should consider refinancing. A low interest rate refincance loan can save you consderable amount on your monthly payments or you can reduce the terms of your loan and be done in your refinance mortgage faster
Other Reasons for Getting a Refinance Loan
Do you need cash if you have equity in your home and you have owned the property for a while you can get some cash out of your home equity by refinancing and use it to improve your property or pay for other major life expenses such as education. A refinance loan sometimes is more advantagous than a home equity line of credit.
Refinancing Home Mortgages to Extend Your Term
A mortgage is basically like a giant house-sized savings account. The “savings” is your home equity, which is the appreciation of the value of your home and the amount of principle you have paid off of your mortgage. The rest of the money is paying interest to the bank for lending you the money. Mortgage math is really quite simple. Say you took out a 30 year fixed mortgage 10 years ago. You’ve put money towards your interest and principle and your home has increased in value. If interest rates are lower than they were when you bought your home, you can refinance and take out another 30 year fixed mortgage. You are now borrowing less than you had to when you first bought your home, at a lower interest rate, spread out over more time. Your monthly payment is likely to drop considerably. In this situation, depending on your financial situation, you may also want to refinance into a shorter term loan so you can pay off your home that much more quickly. Review all of your mortgage refinance options before choosing a program.
You can take advantage of lower interest rates than when you bought your home or last refinanced. You can reduce the terms of your loan and pay off your refinance mortgage faster. You can get cash out of your refinance mortgage for life emergencies. You can change the type of mortgage from a fixed rate mortgage to an adjustable or vice versa by simply refinancing your current loan for better terms. Keep in mind always borrow what you can afford and never refinance for payments that you won’t be able to pay comfortably.
Refinance – Fixed Rate or ARM
There are many choices available these days for refinancing. You can get 15 year, 30 year or even 40 year mortgages. And within each category there are many interest combination. Since a lot of this refinancing options and information today exists online you should do your homework and get refinance quotes in order to compare refinance rates and make the best decision for your needs.