By, home loans on demand
Because refinancing with a new loan can bring you many options and benefits. However, make sure you understand why refinancing your home will be a solution that will actually benefit your unique situation such as:
lowering your monthly payments
refinancing at the right time especially when interest rates drop one percent or more lower than your current mortgage interest rate can make a notable difference in your monthly cash flow.
refinancing may shorten your repayment period but increase your monthly payments: You may find it’s a worthy tradeoff to make higher monthly payments in order to own your home sooner, especially if interest rates are favorable to you. Your personal financial situation and long-term goals will help determine the right move.
refinancing to obtain cash: Cash out refinancing allows you to get an additional lump sum of cash right away to use for major purchases, including home improvements, automobiles, vacations or weddings. However, you should compare the benefits of refinancing to other methods, including home equity loans – especially if you don’t need a large amount.
it is important to consider the following:
know what you owe: determine the payoff amount on your existing mortgage to know how much you will need to borrow from a new loan. Also, find out if your current lender charges any fees or penalties for paying your entire mortgage before it’s due (called prepayment)
you have options: there are numerous loan options out there for your home, ranging from loans that give you a more stable interest rate to those that help consolidate your debt. Work with a lender to determine if any option benefits you more than your current mortgage loan.
refinancing will include closing costs: you will need to go through another property appraisal, as well as provide essential documents which will vary based upon your location and loan option. Closing costs are also involved.
you have time to change your mind: By law, you have three business days after you sign your loan contract to cancel the loan for any reason. For this same reason, you do not receive any money until three days after signing the contract. This applies to primary residences only.