What Does the Home Mortgage Refinance Process Involve?
In most instances, a mortgage is one of the largest debts that a homeowner has to manage. This makes it important for a homebuyer to check his/her real-estate finance portfolio thoroughly, on an annual basis. The home mortgage refinance process is quite complicated and it is important for you to understand what is involved in it.
Reasons for Refinancing
There are a number of reasons why homeowners may opt to refinance. Here are 4 of the most common reasons:
- Mortgage Rates Drop-
In most instances, homeowners opt to refinance their mortgage in order to benefit from a lower interest-rate. The loan amount and interest rate are 2 of the biggest factors that determine the total amount a borrower will pay. It goes without saying that if the interest rate is lower, the overall cost will be lower too.
- Lower Payments-
It is possible to lower your mortgage payment by lengthening the loan-term, lowering the mortgage, removing mortgage insurance or combining 2/ more loans
- New Mortgage Program-
You may explore a refinance because you want to switch from an Arm- Adjustable Rate Mortgage to a FRM – Fixed Rate Mortgage. Alternately, you may be paying-off a balloon loan or combining a 1st & 2nd mortgage
- Debt Consolidation-
If there is enough of equity, at times you can combine all the debts into a single lower monthly-mortgage payment
If your existing loan is with a particular company, you can still opt to refinance with another one. At times the mortgage refinance process may be simpler if it is handled by your current company. This is because they may need less documentation, but it might add to the cost or result in a higher interest rate.
The best way to ensure you are getting a good deal is to conduct a certain amount of research and shop around a bit. If you have made some late payments on your exiting loan, you may still qualify for a mortgage refinance. For additional information about FHA mortgage refinance, jumbo mortgage refinance, Conventional refinance or Reverse Mortgage refinance, call Mortgages Done Right Inc., the mortgage refinancers at (561)777-7622.