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Your mortgage payment may be the largest expense you'll have in your monthly budget. If you are stuck in a subprime loan or adjustable-rate mortgage that has recently caused your mortgage payments to increase, a loan refinance can help save you from defaulting or possible foreclosure. Wouldn't it be great to use this asset to reduce your monthly payment and put extra cash in your pocket? When you refinance your mortgage, you can take advantage of the equity in your home and enable this to take place.
Getting a refinance loan simply means you're taking out a new mortgage loan on your home. It can be a great way to borrow money when you are in need. Unlike a regular mortgage, a second mortgage does not have priority on your home if you default on the loan. Your first mortgage would be repaid by your home's value before any funds go towards paying off the second mortgage.
Many borrowers use a refinance to shorten the term of the mortgage. And brace yourself, even at low rates, a shorter term means a higher monthly payment. The benefit is that you'll build up equity faster and pay far less in total interest over the life of the loan.
You can now easily apply to refinance your home mortgage and fulfill that goal. For example, you have a 30-year mortgage you’ve been paying since you bought your first home when you were young, had average credit and the market rates were high. It’s now 10 years later and you are feeling locked in to your loan. You have a stable job, a high credit score and the US is in a rate-cutting period. You now have option to refinance! You can change your payment period to 10, 15, or 20 years, saving you thousands of dollars in interest. Because your refinance rate is lower and on a shorter payment period, you can still have the same monthly payment. This doesn’t mean the refinancing was useless. You are now building equity in your home faster as you cut out interest and are paying more on principal.
Another way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage - in effect, tapping your home equity, or "cashing out," in mortgage speak. Thanks to favorable rates, you may be able to do so without boosting your monthly outlay. For example, at 8.5%, the payment on a $200,000, 30-year fixed rate mortgage is $1,538. But at 7.5%, that same payment lets you borrow nearly $20,000 more.
Refinance loans can be used to help with many personal financial situations such as reducing monthly payments, home improvements, college tuition and more.
It is the perfect time to refinance your mortgage to lower your payments, make home improvements or just get some extra cash. Plus if you have high interest rate credit cards, auto loans and other bills, refinancing is a great way to consolidate your bills and save money at tax time too, since the interest may be tax deductible.
And at www.quote-advisor.com we make it easy to get a great deal on your refinance loan. Fill out our prequalification form to request a refinance loan and a mortgage specialist will contact you. There is no cost or obligation.