Welcome to the World of Mortgage RefinancingAdmin
What is Mortgage Refinancing?
Welcome to the World of Mortgage Refinancing. It’s OK. Don’t be scared! Refinancing your mortgage doesn’t need to be a scary process. For those of you who are new to the mortgage world, mortgage refinancing means to pay off an existing loan and take out a new one. Clearly, this is with respect to the mortgage on your house. Sometimes in the adult world of financial stability, circumstances arise that are beyond our control and the situation calls for mortgage refinancing. This is so that you can financially stay afloat and make all of your other financial obligations also stay in good standing. Everyone decides to refinance their mortgage for different reasons. Some of those reasons may include but are not limited to the following,
Reasons: Mortgage Refinancing
- To change the terms of their current mortgage agreement (so they take out the new agreement and make the necessary amendments to the old agreement)
- The chance to obtain a lower interest rate or go from an adjustable interest rate to a fixed interest rate(or vice versa)
- Take money out against your home’s equity so that you can finance a large purchase or possibly to take money out against your house (a cash loan)
These reasons aren’t the only reasons why someone would want to refinance their house. They are just a couple of the most common reasons. Everyone has different financial statuses and no situation is 100% the same. Different terms are often applied to different situations however, the basic terms in the agreement are usually the same, but most often it depends on how much you actually put in down in a cash payment towards your home.
Does it Cost More $$ and What are the Terms?
The answer to this question is based on what agreement you initially have with the mortgage company. Usually, mortgage refinancing costs approximately 3-6% of your mortgages loan principal, and usually has the same process as the original mortgage, such as the appraisal, the title search, and the application fees. Speaking in general terms, more often than not, the same terms apply to the refinanced agreement, as the original mortgage agreement. The terms will depend on whether or not you decide you are taking out a cash loan against your home or if you just want the terms revised because of a lower interest rate. Just remember that taking out a cash loan against your home doesn’t help to get any goals such as building home equity or eliminating the mortgage all together. Again, it all depends on the terms of your first mortgage agreement and if you are doing a simple refinance to adjust those terms and get a lower interest rate. However, you can’t just refinance because the interest rate has changed. There needs to be other contributing factors. Your financial status changing could be one of them and therefore you need your mortgage refinanced to meet that amount. If you are having some financial difficulties, maybe you can benefit from refinancing your mortgage. You will not know until your specific situation gets assessed and you speak to your mortgage advisor and you get your situation sorted out.