Question by Henry Gruber: I would like to go into mortgage refinancing as i heard its quite a nice idea, what are the benefits?
I just heard about mortgage refinancing and i would like to know what its benefits are
Best answer:
Answer by Tigg
It is a job just like any other. The benefits are whatever you negotiate with your employer
Give your answer to this question below!
Refinancing means you replace your current mortgage with a new mortgage, preferably with terms that are better for the borrower. There are 2 potential benefits. First, if you have an adjustable rate mortgage, the rates WILL be going up over the next few years. Switching to a fixed rate eliminates that risk. Second, it you can secure a lower interest rate, you will reduce the total interest paid over the life of the loan.
Mortgage refinancing isn’t a bad idea.
Several benefits of mortgage refinancing are:
1. It helps you pay for a previous loan owed
2. It helps you cut down on all monthly payments you always pay for your loans
3. It helps you access other cash easily
4. It reduces your fear of not being able to pay off.
Thanks
Robert Mullen
Hi Henry,
take a look at this, for the FHA;
Individuals who have obtained an FHA mortgage loan have lives like anyone else. These lives can change in subtle and dramatic ways, both financially and personally. Sometimes these changes, as well as changes in the mortgage loan market, may result in the desire to refinance one’s FHA mortgage loan. A mortgage refinance essentially involves acquiring another mortgage to replace an existing one. There are two main types of FHA refinances, “regular” and “streamline.” Each type has a different purpose and process that borrowers must go through.
There are many reasons for getting a regular FHA refinance, including paying off an existing mortgage, dealing with a divorce or property settlement, and utilizing the “cash out” option. The regular refinance can be used to pay off any existing mortgage, whether it is conventional, VA or FHA. Additionally, a “cash-out” refinance can be used when the borrower wishes to borrow against their house and take out a portion of their home’s equity in cash. That cash can then be used to pay off debts or finance any other expenses.
An FHA “streamline” refinance can be used to reduce the principal or interest payments, add or delete individuals from the title, change to a loan with a different term (shorter or longer) or change to a fixed rate or adjustable rate mortgage. In regards to the last example, if a borrower wishes to switch to a loan with a steady payment amount, month after month, then they may want to switch to fixed rate mortgage. Conversely, if the borrower’s fixed rate monthly mortgage payment is too high, they may want to temporarily switch to an adjustable rate mortgage, depending on the state of the mortgage loan market. Another option for a person in this situation would be to refinance to a loan with a longer term, in which the monthly payments would also go down. It should be noted that no cash can be taken out on “streamline” mortgage refinances.” this you would find on their guide you can download at the link below:
In other words:
Refinancing basically means applying for a new home mortgage. When you refinance your home you are replacing your existing home loan with a new one, which may allow you to adjust the term of the loan, the interest rates, the amount of the monthly mortgage or the equity in your home. Lenders often refinance home mortgage loans in order to take advantage of lower interest rates or to free up cash for other expenses. By reducing your monthly mortgage payment or the remaining term of your loan over the long run, you can potentially save paying tens of thousands of dollars in interest.
Once you decide to refinance your home mortgage, you might want to talk to your original lender first. You will be required to go through a credit check and verification of employment. It’s always wise to request a good-faith estimate in writing from the lending institution, particularly if you talk to more than one lender. You will want to make certain that you understand all of the costs involved, as you compare lenders and the best interest rate each offers. It is important to remember that refinancing comes with loan processing costs as well. You will want to determine if any long-range savings will outweigh the expenses involved in refinancing the loan. Transaction fees and other hidden costs associated with refinance could diminish any savings over the long term. Depending on your situation, it might make more sense to take advantage of lower interest rates by refinancing your auto loan or credit card debt.