Submitted by admin on Thu, 04/15/2010 - 02:56
You may seek mortgage refinance to pay off an existing mortgage loan. A refinance means new loan terms and conditions, which if is suitable for you, may prove quite beneficial.
Here are the top 3 benefits for which you may seek mortgage refinance:
- Financial stability: Refinancing will help you reduce your loan term. You may have to pay higher monthly premiums but in return you can pay off your mortgage sooner. You may also have the advantage of paying a lower interest rate than the original mortgage loan that you had. If you have other bills like huge credit card bills to pay, you may use the refinance to pay off these debts so that you can have only your mortgage payment to make each month.
- Lower rates: If you get a lower rate than what you currently pay on your mortgage, refinance is a very wise thing to do. This way you can lower your monthly mortgage payment. However, you must remember that the interest rates would vary as per the market fluctuations. The decision that you have to make is whether you would like to go for a fixed rate mortgage or an adjustable rate mortgage.
- Build equity faster: If you are switching from a 30 year mortgage to a 15 or 20 year mortgage, you may build equity quickly and also save money on the financing fees.
If you have good credit score and would like to pay off your loans faster, you may take advantage of these scores to get yourself a mortgage refinance loan with a lower rate of interest. A refinance can be a good way to get better mortgage in future. However, you should weigh your options carefully and consider the advantages and disadvantages of mortgage refinance before you apply for one. Do your research well and only then take the step.