Mortgage loan refinancing is obtaining a new mortgage loan to pay off your old mortgage and get new rates. There are a number of reasons why people choose mortgage refinancing. One is to get lower rates, to build home equity faster, or to change their existing loan type.
Changing Loan Types
For example, for those who started to have a profitable income, they are now able to pay higher rates with shorter payment terms. This way, they can pay off their mortgage loan sooner.
On the other hand, those who have existing mortgage loans with adjustable rates may find that they are actually paying for higher rates because of the current trend in the market. They may feel that adjustable mortgage rates are too unpredictable as the rates increase with each passing year. They choose mortgage refinancing to change their loan to a fixed rate since market trends do not affect the interest of fixed rate mortgage loans.
A New and Improved Credit
People who have increased their credit rating are likely to apply for mortgage refinancing in order to get better rates. They were not able to obtain lower rates in the past because of bad credit history. But as time passes, they have increased their credit rating and are now qualified for loans with lower rates.
Are You Going to Refinance Your Loan?
Whatever your reason may be for mortgage refinancing, it is wise to weigh your options carefully before applying for mortgage refinancing. Are you going to stay in that house or do you plan to sell it? How many years do you have left before your existing mortgage loan ends? If you only have a few years left before your loan ends, then going for another loan is not a practical move.
Also remember that when you apply for mortgage loan refinancing, you will be going through the same process you went through when your first applied for a mortgage loan.
Refinancing Your Home
If you’ve already decided on mortgage refinancing, it is recommended to ask your lender regarding the possible rates that they can offer you. The lending company can give you better rates especially if you have been a good payer.
It is also a good idea to inquire from other lending companies about rates and charges. Compare not only the interest rates but all the other fees involved as well. Lastly, make sure that you fully understand the new terms on your new mortgage loan before signing up the contract.
“There are a number of reasons why people choose mortgage refinancing. One is to get lower rates, to build home equity faster, or to change their type of loan.”
You should NOT refinance in order to “build home equity faster” — there is a *much* better way.
More and more folks are using a Home Equity Line of Credit (HELOC) as an interest cancellation account to accelerate their home equity and payoff their home *years* sooner than listed on their mortgage amortization schedule.
Unfortunately, today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…