If you are looking for a lower rate to ease cash flow, a shorter term to get your mortgage paid off sooner, we can help you make the right decision. You may find it wise to consider consolidating debt and paying off high interest credit cards. And if large repairs are on the horizon, MortgageRight will help you weigh the options with excellent client service.
Getting a new mortgage to replace the original is called refinancing. Mortgage refinancing is offered to allow a borrower an opportunity to obtain a different interest term and/or rate. The first loan is paid off, allowing the second loan to be created instead of simply making a new mortgage and throwing out the original one.
For borrowers with a perfect credit history, refinancing can be a great way to convert a variable loan rate to a fixed loan rate. Borrowers may be able to obtain a lower interest rate or shorten the loan term. There also may be the option to cash-out for debt consolidation, home remodeling or college expenses.
Most people refinance when they have equity in their home, which is the difference between the amount owed to the mortgage company and the appraised value of the home. Getting your first home mortgage was probably difficult. As you work hard and your good credit history grows, the opportunity may arise to procure a loan at a lower rate. Many people refinance their mortgage loan for this reason.
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Disclosure: Even though a lower interest rate can have a profound effect on monthly payments and potentially save you thousands of dollars per year, the results of such refinancing may result in higher total finance charges over the life of the loan.
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