Mortgage Refinance Can Lower Your Monthly Payment and Give You Better Terms
Basically, refinancing means taking a new mortgage to replace the old one. When you decide to refinance your mortgage you may need to consider the costs of such refinancing including your tax bracket and the duration for which you plan to stay in your home. You may be charged a penalty for paying off your original loan early with this new refinanced mortgage. So, it is very important for the borrower to choose the loan that will help to meet both his short term and long term needs.
Refinancing can lower your mortgage payment by refinancing at a lower interest rate. Changing the terms of the mortgage also can lower your mortgage payment. Changing from a ten to twenty year mortgage, for example, will considerably decrease your mortgage payment. Changing from the traditional payment including both principal and interest into a new payment that requires only interest also lowers your mortgage payment.
Consider refinancing an adjustable rate mortgage into a fixed mortgage if you plan to stay in your home for many years. Likewise, if you plan to stay only for few years then you may want to convert your adjustable rate mortgage because paying higher interest for many years will cost you lots of money. It is advisable to use the equity in your home rather than credit cards to finance expensive purchases, saving you much money in the long run.
It is difficult to know what will happen in the interest rate in future but, as a smart consumer, it is important to know the intricacies of the market. Any slight change may cost you lots of money.
Related Tags: loan, mortgage, interest, payment, rate, refinance, adjustable, terms, lower
Jonathan Hansen is an expert in Mortgages, refinance, real estate, financial planning, bankruptcy, foreclosure, and debt relief. He offers free consultation, assistance, and counseling to families, seniors, individuals, charities, and other parties in need of financial assistance. He runs http://www.mortgage-refinance-info.com/re_finance.aspx Call 800-772-7027 for a free quote today.
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