What Does It Mean To Do a Home Mortgage Refinance?
We all want to save money– it is only natural. You may have vaguely heard of refinancing and home mortgage refinance rates, but what does it all mean? If you have a current mortgage against your property, you may be eligible for a home mortgage refinance—this is a way to possibly pay lower interest rates or smaller monthly payments.
Time To Consider Home Mortgage Refinancing?
There are two main reasons someone might choose to pursue a home mortgage refinance.
- Rate and Term Refinance– This type of home mortgage refinance occurs when you want to obtain a lower interest rate. Your term may also be longer or shorter, depending on your financial needs. This type of refinance involves taking out a new mortgage, as well.
- Cash-Out Refinance– This type of refinance involves taking out a new mortgage for more than what is currently owed. The leftover allows you to use the cash for more immediate debts or other existing expenses.
National averages on mortgage prices, the rate at which refinancers seek loan repayment, your current mortgage rate, and the cost of exchange (including application fees, closing fees, survey fees, attorney fees and other expenses) all factor into whether or not you should consider a home mortgage refinance. Knowing your reason for refinancing in advance, along with the overall end cost of your mortgage after refinancing, can help you to make the right choice.
There are several tools to help you decide whether a home mortgage refinance is right for you. A refinancing calculator (like the one on our site) can help you to figure out the overall cost of refinancing. Comparing this to what you currently pay allows you to make an educated decision as to whether or not now is the right time to refinance. For more information on all the tools Paramount Equity® offers, contact us today.