Question by katlover: When refinancing, are you refinancing the balance of current mortgage or the value of the home?
I’m considering refinancing but am a little confused about the process. I cant figure out if I would be refinancing my balance or if the new loan would be for the value of the home? EX: my current loan was for $ 89,900 but i owe $ 79, 500.The value of my home was appraised for $ 92,000 but is now worth $ 140,000. So what would the new loan amount be for?
Answer by Ryan M
You refinance the remaining amount of the mortgage. Your new loan will be for $ 79,500. The fact that you have so much equity in your home means that you will probably get a great rate AND avoid PMI.
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