WHY WE REFINANCE

When we refinance we are exchanging one set of terms and payments for another. We refinance home mortgage loans for several reasons. The mortgage payment is one of the largest monthly expenses for the family. Reducing the mortgage payments gives extra cash to the home owner to manage other expenses. One reason to refinance is to lower the monthly mortgage payments. Because of the movement in the economy the interest rate changes constantly. If the interest rate goes down drastically and the homeowner has a high interest rate it would be wise to refinance. This is one way to lower monthly expenses.There is yet another reason to refinance and that may be to change the mortgage loan from an adjustable rate mortgage to a fixed rate mortgage. The adjustable rate mortgage is used to pay lower monthly payments when the interest rates are low, but when the economy changes and the interest rates rise as a result, it may be better to refinance to the fixed rate mortgage to allow for lower more consistent payments.Still another reason could be to take equity out of the home to be used for other expenses, such as renovations, additions, debt consolidation, college, or other expenses as the borrower chooses.The homeowner may choose to pay the loan off earlier than stipulated. There may be penalties for early pay-off in the current mortgage and the borrower may want to get that changed as a means to invest more money toward retirement.Another reason may be to become exempt from PMI, when the loan is first financed the borrower may be charged 80% of the loan amount. The homeowner pays this amount with his mortgage payment. Once there is equity built up in the home it can be refinanced for less than 80% of the loan saving the homeowner the expense of the PMI. This will also reduce the monthly payment.Another plus is the cash saved from the reduced monthly payment can be used for other purposes its according to the wishes of the homeowner.No matter what your reason is for refinancing, you can find a number of reasons why refinancing may be the avenue for you. Think things out carefully, use research materials such as the home buyer defense guide, or mortgage secrets exposed, and refinancing will work out for you because you will be thoroughly informed.

Happy Surfing,