Home Mortgage Refinance TerminologyArticle Posted by Expert Author: Tony Caro on 06/04/2013
Mortgage refinancing offers many benefits to home owners. Home mortgage tefinance yerminology can be a bit daunting for the uninitiated. But simply put, refinancing is the act of replacing an existing mortgage with a new one, and it comes with new terms, conditions and costs. But, like everything else, it is important to educate yourself with the process and important terms. A clear understanding of the refinancing process can help you avoid potential pitfalls and successfully take charge of your finances.
When refinancing your mortgage, you will have to select a lender to give you the loan in the first place. A lender can be a person, an institution or a firm. They might ask that your property be appraised before they can qualify you for a refinancing. Appraisal is a written analysis of the estimated value of your home. It is conducted by a qualified appraiser. Lenders provide home owners with a good faith estimate which is an approximation of the charges that the borrower is likely to incur when the settlement is achieved. Another thing you need to know is whether the mortgage is ARM i.e. Adjustable Rate Mortgage or a fixed one. The difference is that in an ARM, the interest rate fluctuates along with that of specified index. Understanding home mortgage refinance terminology is a good start to making the wisest choice for your budget and long-term financial outlook.
Article Posted In: Understanding the Refinance Process