Are you looking for favorable rates and terms on your loan as your monthly payment is on the higher side? Or are you looking to consolidate two loans into one so that you can pay off faster? You will be able to achieve all this and more by refinancing your mortgage. Mortgage refinance basically means to replace your current mortgage with a new loan with a more favorable interest rate and terms that you can afford to manage. This new loan is secured on the same property as your current loan. The new loan funds are used to pay down the current mortgage while any remaining money can be used to your best advantage. Read on to find out the benefits of mortgage refinance and how to get payment assistance.

Is the question when and why to refinance my home on your mind? These few reasons will help you to measure the advantages it has to offer. Like; by refinancing you can save more, as lower rates usually mean lower payments by extending the term. However, with an extended term, you will be paying more in interest during the life of the loan. Again if currently you have an adjustable-rate mortgage (ARM) you may choose to refinance to get another ARM with better terms and the loan may start out at a lower interest rate. Again you would like to convert an ARM to fixed-rate mortgage (FRM). Another good reason to consider refinance, is that you would like to get cash out from the equity built up in your home so that when you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment.

As we have considered the advantages of refinance, discussing when not to consider it, will help you to decide better. Refinancing is not a good idea when you have had your mortgage for a long time as the proportion of your payment that is credited to the principal of your loan increases each year, while the proportion credited to the interest decreases each year. In the later years of your mortgage, more of your payment applies to principal and helps build equity. By refinancing late in your mortgage, you will restart the amortization process, and most of your monthly payment will be credited to paying interest again and not to building equity. Again, see if your current mortgage has a prepayment penalty, a penalty which a lender charges if you pay off your mortgage loan early and paying a prepayment penalty will increase the time it will take to break-even when you calculate the costs of the refinance and the monthly savings you expect to gain.

It is very common to pay 3 percent to 6 percent of your outstanding principal in the form of refinance fees. This cost is in addition to any prepayment penalties or other costs of paying off any mortgages you might have. Now refinance fees vary from state to state and lender to lender.

Persevere and also be on the lookout for potential lenders in the real world and online until you discover the lender that’s right for you and ready to offer the best mortgage refi deals, your one stop resource for saving money.

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