Refinancing a mortgage, what does it mean?

You hear the term all the time, but many do not know the types of mortgage refinancing. When you refinance a home loan you are asking a lender to pay off your current mortgage in exchange for a new mortgage. This new mortgage may have a different interest rate, a new term, and a different balance.

Most people choose to refinance their home when they are able to take advantage of lower interest rates or they want to use the equity accrued in their home.

Types of Mortgage Refinancing:
There are two types of refinancing: the first is rate and term refinancing and the second is cash-out refinancing.

Rate and term refinancing lets homeowners trade in their current mortgage for a new one without raising the amount of the current loan. Owners use rate and term to receive a lower interest rate or term, allowing them to save money on interest or to pay down the loan over a shorter term. Presently, this option is extremely popular due to the low mortgage rates that are available through lenders.

Cash-out refinancing is when homeowners are increasing the loan value of their current mortgage for a larger value mortgage in order to get low rate cash. This is most often used when a home owner is looking to put money back into a home. For instance, cash-out refinances can be used for kitchen remodels, updated landscaping, adding a pool and much more.

To discuss your options, contact a pro at Mortgage Center and they can walk you through the process step by step. Visit their website here: https://cfcu.mortgagecenter.com.
 
Posted: 11/30/2017 5:03:31 PM by Kayleigh Bell | with 0 comments