If you're considering refinancing your home mortgage so that you can get the equity out of your home, there are many good reasons to do so. For instance:
Acquire a lower mortgage rate to reduce interest costs
Improvements to your home
Acquiring funds for investments
Pay off other debt such as credit cards
Sending your children to college
If you have an adjustable-rate mortgage, acquiring refinancing on your home mortgage can be a life saver, especially if the rate is rising. Helping you to get cash for the equity in your home, can also be a great benefit.
Equity in your home means, that all the years you have been making monthly payments, including the down payment and your first initial payment, equals the value of your home that has already been paid for.
Once the equity has built up in your home, you can use your investment to refinance and have the option to get cash out.
Keep in mind the refinance loan, like most other loans, will have to be repaid. The payments include the monthly principal amount and the interest amount based on the amortization schedule.
Is Refinancing A Home Mortgage Loan Different?
The big difference is the low interest rate received on the loan which in turn, allows you to take advantage of the great rates so that other debts, like credit cards and other consumer loans, can be eliminated.
A refinance loan can free up capital from the equity you have in your home to use as you wish, instead of remaining unusable.
If You Decide To Refinance - Ask These 10 Questions First!
If you're ready to refinance, be smart and comparison shop. Contact several lenders either online or at your local bank, and ask them to explain the refinance loan plans they have available.
Of course, knowing the loan terms and conditions like the monthly payments and interest rate are important, but also be sure to include the following questions:
1. How much are the monthly payments?
2. Annual percentage rate? (APR)
3. What is the home refinancing loan rate? ( Cost to borrow the loan)
4. Any Rate Change? If so: When? How Often? How Much?
5. What will you have to pay in fees?
6. What points will be charged?
7. If the application is turned down are the fees refundable?
8. How many years will you have to repay the loan?
9. What can I expect to pay in closing costs?
10. Is the refinance loan affordable?
Lenders are anxious for your business. If you let them know you are shopping for the best deal, they will be glad to compete for your business. Be sure to negotiate the lower fees, points and interest rate. Make them aware that you mean business and that you are not afraid to walk away if it is not want you want.
If your decision is to refinance, there are many full-service refinance loan websites you can visit that have great loan plans. There are some that offer free comparison quotes quickly and easily, with low or no closing costs.
However, online or off line, get educated by doing your research, so that you find you've made the best decision for you and your family.
http://www.realestateinvestmentarticles.net/Article/real-estate-investments---investment-loan---refinance----Tips-On-Refinancing-Your-Home-Mortgage-/4090
