In this article I am going to show you the 3 most asked questions people ask about their home mortgage refinance. It is a very important decision to make and the possibility for a gross mistake should be minimized, of course.
So people ask these questions and others already experienced or real experts answers them. Amongst the answers there are those that really help and I want to show you exactly those.
1. How can a refinance home mortgage help me?
It can be used for many reasons. It can be used to lower your interest rate, which will lead to a cheaper payment. In many cases if you've had your mortgage long enough, if you refinance, you will be making payments on a smaller loan amount therefore making cheaper payments.
It can also be used to consolidate credit cards and car loans. Most of the time credit cards can range from 12-25% while mortgages range from 5-8%. It is a no-brainer, since you will save hundreds of dollars monthly and finally pay-off those credit cards, where you are only paying interest that is accumulating.
If you have no credit cards then it can be used to get some money out of your equity to invest, do home improvements, or anything where you will need a big chunk of money without having to worry about a ridiculous loan or credit card. You will be surprised, since in many cases for a couple more dollars a month you can reduce the amount of years of the life of the loan.
2. How often can someone refinance a home mortgage?
You can refinance as often as you want - you just have to pay the closing costs every time.
However!
The vast majority of banks will sell the loan again on the secondary market. Therefore, if you refinance, the institution you are trying to get away from may very well may become the new owner of the loan again and there would be nothing you could do to stop it!
When a bank does a loan - they are careful about it, how it is set up so that it can sell or be "salable". An "unsalable" loan is a big no-no for a bank - they don't want to put out all that money to the individual lender - they just don't have it! Banks want to make their cut on the loan and hand it off to one of the big banks in the country that CAN sell out all the necessary capital to a consumer.
There are some banks that don't resell loans. Very few though. You could find one of them and see if they would offer you a better deal.
3. How can one find a reputable lending company to refinance a home mortgage?
All lenders are good, but it depends on enough specifics to give the best answer. If one can afford big enough payment and has a decent credit, and the house is in good shape, I would advise you to do an FHA loan, and most lenders do this kind of loans.
I hope these answers would help you arrive at the right decisions.
