When a homeowner replaces their existing mortgage loan with a new one, the process is known as “refinancing.” The purpose of the new loan is to facilitate either savings or the attainment of some other monetary objective.
Most people, for instance, choose to refinance in order to get a better interest rate and, thus, spend less each month on their mortgage. There is also the option of refinancing into a different loan, paying off the mortgage faster, or taking cash out of the equity in your property.
Refinancing is the process of switching out your current mortgage loan for a new one.
Just as when you first bought your home, you’ll need to apply for a new mortgage in order to refinance. However, this time around you won’t be utilizing the funds to buy a property, but rather to clear your current mortgage.
If you refinance your mortgage, the new loan will pay off the old one. A new mortgage allows you to pick your own rate and repayment terms, so you can refinance to achieve cost savings or other goals.
As a result of their homes’ increasing worth, many homeowners might now qualify for a refinance.
In terms of your own economics, it is inevitable that things will shift over time. Equity in your property will grow, and you might even see a bump in your take-home pay and be able to finally clear out those credit card balances.
As your financial situation improves, you may be able to qualify for a lower interest rate or a longer loan term on your mortgage. Refinancing a mortgage can have many advantages, including:
The interest rate on a mortgage is a variable that is continually changing. Even if your financial situation hasn’t changed since you took out your mortgage, you may be able to refinance to a cheaper rate and save money if interest rates have dropped.
Loan terms can range from one to thirty years, interest rates can be fixed or variable, and mortgage closing expenses can range from zero to several thousand dollars.
When interest rates drop, a lot of homeowners look into refinancing. However, a mortgage refinance can also help you pay off your home faster, avoid paying mortgage insurance, and use your home’s value to consolidate debt or finance home upgrades.
Because of the tax-deductible nature of mortgage interest, consolidating debt into a single mortgage loan could result in a significant tax savings. However, before making any move that could affect your taxes, you should always speak with a tax expert.
Not all Jacksonville mortgage refinances are created equal. There are three types of refinances you should be aware of:
With this form of refinance, you can get a new loan with terms that are more favorable to you than the terms of your present one. When you refinance, you receive a new loan, pay off your old one, and then start making payments on your new loan.
Using this method of mortgage refinancing, homeowners are able to borrow more money than they owe on their loans. Afterwards, the difference is paid out in cash. Debt consolidation and home renovation projects are common reasons for cash-out refinances.
The homeowner makes a single payment on their house loan during the refinancing procedure in this form of mortgage refinance. A smaller principal balance means that they can afford a lower monthly payment.
If you can save money, develop equity, and pay off your mortgage faster through refinancing, you should do it. Getting a cheaper interest rate by half a percentage point to three quarters of a percentage point is worth the closing costs if you plan to stay in your house long enough to make up the difference.
Mortgage refinancing deals can typically be finalized in 30 days or less. Remember also that business hours can change depending on the economy. It could take up to 45 days to close if rates have dropped significantly and numerous homeowners are trying to refinance at the same time.
Now may be the right time to refinance and potentially save hundreds of dollars each month! Refinancing your mortgage could:
Our RefiNow program could help you take advantage of low interest rates, even with little or no equity in your loan.
Contact Bayway Mortgage Lenders today to get your refinance process started!