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Refinancing is essentially paying off your existing loan with a new loan, presumably with some major financial benefits to you:
Reduce Monthly Payments
You can replace your existing loan with one that has a longer period of time in which you need to pay it off. This itself reduces monthly payments, however if you funnel the money saved directly against the principal of the loan, you will further reduce payments.
Reduce Future Interest Costs
Interest rates fluctuate constantly, and it is very possible that you can now secure a mortgage loan at a lower interest rate than your original loan. Doing so will save you money down the road.
Reduce Your Future Risk
If your current mortgage loan is on a variable interest rate, you can transition to a loan with a fixed rate, you will avoid having to deal with unpredictable interest rates, and know exactly how much you owe.
Literally meaning "death vow," a mortgage is basically a loan taken against a large asset, almost always a real estate property that you are trying to purchase.
Buying a home is almost certainly the major purchase in the life of the average person. A mortgage helps you make that purchase, by loaning you a large amount of money, payable generally within 15 or 30 years.
Interest rates are low compared to most loans, and mostly come in two flavors: variable or fixed. Variable rates, as their name suggests, can change over time but generally start off lower than fixed rates. Fixed rates do not change, and are less risky than variable rates as a result.
GetHomeQuotes connects you directly with lenders who based on the information you enter on the right, offer you options regarding securing a loan for your home. Filling out the form is of course free and without obligation. Best of luck and congratulations on making this once in a lifetime buy.
The majority of Americans are in debt, and most can't get out of that vicious cycle. Consolidating your debts by a loan against the equity in your home, can help alleviate this problem in a number of ways:
Reduce Payments
Most debt (credit card, etc) has very high interest rates. A debt consolidation loan against your home typically have much lower interest rates and are spaced out for longer periods of times, greatly reducing your monthly payments.
Tax Implications
Payments made against credit card debt and car loans are not tax deductible, but payments made against mortgage loans are. By taking out a mortgage to pay for your high interest debts, you can start paying them off against a lower interest home mortgage loan and get the tax benefits which itself is helpful, but can really make a large difference if it shifts you into a more advantageous federal tax bracket.
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