When to Seek Mortgage RefinancingArticle Posted by Expert Author: Tony Caro on 08/16/2013
Deciding whether to refinance or not is a tough decision. It is important to remember that mortgage refinancing is not carried out to pay off the debt. Instead, the objective here is to restructure the debt in order to make it easier. The borrower often gets a lower interest rate and better loan terms than their current mortgage as a result of refinancing. The home owners can also get the ability to extend the life of their loans to up to 30 years thus significantly reducing their monthly payments. Another big advantage of refinancing is that of debt consolidation. For example, home owners with a first mortgage as well as a home equity mortgage can combine these into one fixed rate loan and pay out over the loan term without the stress of managing two separate mortgages.
Home owners should consider the number of months it will require for the lower payments to regain the closing costs of the new mortgage before deciding to refinance. But a home mortgage refinance may be potentially troublesome for borrowers who are already underwater and late on their mortgage payments. Their bad credit standings will not let lenders give them refinancing facility at good terms. But it is important to ask your current lender to find out the opportunities available in this condition as well.
Article Posted In: Refinance Home Mortgage