Mortgage refinancing : an introduction

Mortgage refinancing is a term with many meanings, and this can cause confusion. For example, you might be dissatisfied with your existing mortgage deal, and want to refinance in order to find a better interest rate. Or you might want to take out a further loan on your house to raise money for expenses such as home improvements. Or perhaps you're lucky enough to have paid off your mortgage already, in which case you might want to release the equity in your home with a reverse mortgage. All three situations involve different forms of mortgage refinancing.

Mortgage refinancing is all about the relationship between two factors: money and time. The more money you can afford to pay now, the less you'll pay in the long term. On the other hand, if you need more money now, you'll end up paying more in the long term. Although we never have as much money or time as we'd like, it's possible to make the most of what you have. You need to:

* Be realistic. Knowing what you can and can't afford is vital if you want to keep within your budget.
* Know the law. There are federal protections in place to stop lenders exploiting borrowers. If you know what's legal, it's harder for unscrupulous institutions to take advantage of you.
* Shop around. Get quotes from as many respectable lenders as you can. It's only by comparing deals that you know you're getting the best mortgage.
* Do the math. Work out how much each deal will benefit you now, then think about how it'll benefit you in five, ten, fifteen and even twenty years' time. Weigh up the short-term benefits against the long-term benefits.

Mortgage refinancing: reasons and rates

As we've just mentioned, the more you can afford to pay now, the better off you'll be in the future. That doesn't mean that paying high rates of interest now is a good strategy. It's the repayment of capital that will give you a healthier financial future. If you're looking to refinance in order to find a better deal on your existing mortgage, your goal should be to find the lowest interest rate possible so you can get on with capital repayments. Our section on re-evaluating your mortgage will give you some more advice.

If you're refinancing your mortgage because you're short of cash at the moment, your situation is very different. The factors of money and time come into play again here. The more money you need, and the sooner you need it, the more money you will eventually repay, and the longer you will take to repay it. In other words, you will spend a lot of money on interest, and you will take longer to repay your mortgage. This is a good argument for avoiding mortgage refinancing if possible. If you go ahead with refinancing in order to borrow money, have a clear plan in place to repay your loan. Our section on getting a second mortgage gives further advice.

Some people are lucky enough to have paid off their whole mortgage, but then find themselves stuck with a high-value property and little cash to spend. The younger generation complain about being "money-rich, time-poor", but older people often find themselves "house-rich, money-poor". You've probably heard of "reverse mortgages" allowing you to release the equity in your home in exchange for a monthly payment. These schemes can be very good for freeing up some cash, but they're not all what they seem. Remember, an equity release scheme is really just a loan by another name, and you'll have to either repay it or lose the house. Our section on other mortgage options gives more information about reverse mortgages.

The world of mortgage refinancing is a confusing one, and it's often hard to wade through the jargon and find the best deal. However, if you spend some time reading up on what you need to know, you'll find that being well-informed will save you a lot of money.

 

 

 

 

 

 

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Mortgage Refinancing

> Introduction
Re-evaluating your mortgage
> Mortgage refinance
> Refinance mortgage rates
>Refinancing calculator
> Interest only
> Refinance company
Getting a second mortgage
> Refinancing your home
> Home refinancing
> Refinance second mortgage
> Second mortgage
> Bad credit refinance
Other mortgage options
> Commercial
> Mobile home
> Reverse mortgage
> Refinance home equity loan
> Bad credit mortgage
> Insurance

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