When you have a mortgage, the last thing that may be on your mind is refinancing. What you need to know however, is that sometimes these two things can go hand in hand. If your financial outlook is on the gloomy side, there may be a point in your future when you wish to think about the merits of refinancing your home. Doing this offers a means of paying off your current mortgage. You are then free to use the collateral for the refinancing process. You may not be aware of the benefits refinancing could bring to your life. By doing so, you could receive a longer term on your home loan, or a lower interest rate. For example, the term of the second loan you receive from your financial institution might be over a longer duration, but this will mean that the amount you pay monthly will be less. Going this route has the ability to reduce the time it will take you to pay the first mortgage that you have off in full. This will help to ease some of the financial burden you are experiencing because it will give you more money to pay other bills that need to get paid. You will reduce the length of the first house loan, and by so doing, the refinance loan will enable you to pay off the first one sooner than you had anticipated. For the person with a family depending upon them, this can be a huge burden lifted off their shoulders. The disadvantage to refinancing is that your monthly payments may rise a bit, but on the up side, you will own your residence in a shorter period of time. With the extra cash that you will have in your wallet and bank account, you will be able to pay down and pay off other debts you may have, such as your vehicle, personal and student loans, and credit cards. If this sounds like something that you would want to do to help you out with bills and for a better future, the best time to think about it is after you have built up enough equity in your dwelling. Wait until you have at least 15 to 20 percent before you speak with a lender at your bank (or at the minimum, 10 percent). If you decide to start the process when you only have five percent equity, you present a greater risk to your financial establishment and will have to pay out additional funds for the second mortgage that you want to get. To qualify, you must be responsible with your payments. If you have a history of late or missed payments, you are more likely to be denied a refinance loan. In particular, it is the 12 months preceding the request that the bank needs to make sure you are reliable. If you are conscientious with your first mortgage, this behavior will communicate a positive message to the lender. To learn more about getting a new mortgage, Flint, MI residents go to: https://www.financialplusfcu.org.
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