Refinance Your Mortgage?
By refinancing a mortgage, homeowners replace an existing mortgage with a new mortgage on the same property. This new mortgage pays off the old mortgage and may have different terms than the old one. Refinancing generally involves new loan costs and closing paperwork.Why Refinance?
There are many reasons why you may wish to refinance your existing mortgage.
The most common is to get a lower interest rate on your loan, but others also refinance in order to switch from a fixed-rate loan to an adjustable-rate loan (or vice versa), to stop paying private mortgage insurance (PMI), or to get cash out of their home's equity.
Many homeowners are realizing that they can save money by switching to an adjustable-rate mortgage (ARM), especially if they plan to sell the home in a few years. ARMs are usually about two percentage points less than fixed rate loans.
| We will add infomation about refinancing specialists in various U.S. cities to this site, starting with Houston refinance companies. |
If you originally borrowed more than 80% of the home's value, you were probably required to pay for PMI as well. If you've been paying on your home for several years, or it has grown in value since you bought it, you may be able to get out of continuing to pay for PMI.
Another popular reason for refinancing is to get cash for big expenses like tuition or home improvement.
[Continued: Refinancing, Part 2]