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ØRefinancing a Home.
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Refinancing
an existing mortgage home is a popular option for home owners who want
lower monthly payments, a shorter mortgage loan term, or equity for
home improvements or other needs. When you refinance, you essentially
take out a new mortgage to replace the one you currently have.
When to Refinance?
Most people will tell you that it's best to refinance when you're sure you can decrease your interest rate somewhere between one and two percentage points. You should also consider how much it's going to cost you up front to refinance (i.e. closing costs).
Benefits of Refinancing:
Your overall monthly payments may be reduced due to a lower interest rate if the term remains the same.
You may shorten the term of the loan. This may mean higher monthly payments, but because you'll be paying off your mortgage sooner and paying less interest, the equity in your home will build up faster.
You may want to combine two existing mortgages into one new mortgage, possible with a lower interest rate.
You may want to use the equity in your home for home improvements or other financial needs.
When to Refinance?
Most people will tell you that it's best to refinance when you're sure you can decrease your interest rate somewhere between one and two percentage points. You should also consider how much it's going to cost you up front to refinance (i.e. closing costs).
Benefits of Refinancing:
Your overall monthly payments may be reduced due to a lower interest rate if the term remains the same.
You may shorten the term of the loan. This may mean higher monthly payments, but because you'll be paying off your mortgage sooner and paying less interest, the equity in your home will build up faster.
You may want to combine two existing mortgages into one new mortgage, possible with a lower interest rate.
You may want to use the equity in your home for home improvements or other financial needs.
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