Home Mortgage Refinance Loans
Home mortgage refinance users guide. What you need to know to find a home mortgage refinance that's perfect for your needs.
Refinancing your present mortgage may prove to be an even better way to accomplish your financial objectives, rather than either a home equity loan or a home equity line of credit, particularly if the interest rate on your present mortgage is 2 or more percentage points above the current rate. With a home mortgage refinance you might secure a lower mortgage rate, get a longer payment term, lower your monthly payments, and even walk away with cash for home improvements and/or debt consolidation.
Refinancing Without Cash-Out
If your present need is to simply lower your monthly payments or lower your interest rate, or both, it would serve you well to crunch the numbers on a home mortgage refinance loan. Generally speaking, if your present mortgage was issued at a rate 2 or more percentage points above current mortgage rates, it would be worth your while to check this out. This is not nearly as difficult or time consuming as you might think, as you will see in the section titled "Your Next Step" below.
Cash-Out Refinancing
If, instead, you are looking to a home mortgage refinance loan to not only lower your rate, but provide you with additional funds for home improvements, debt consolidation or whatever, you might well choose this option as a better financial solution than a home equity loan or home equity line of credit. With cash-out refinancing, you refinance your mortgage for more than you currently owe, and pocket the difference.
There are important differences between home equity loans and cash-out home mortgage refinance loans. A home equity loan is a separate loan on top of your first mortgage, while a cash-out refinance is a replacement of your first mortgage. The interest rate is ordinarily more favorable on a cash out refinance, but you have to pay closing costs when you refinance, which you don't have to do on a home equity loan.
Closing costs on a home mortgage refinance loan can amount to hundreds or thousands of dollars, so it doesn't make sense to refinance a higher amount of principal at a higher rate. If your current mortgage is at a rate not that much different from the rate they are offering on your refinanced loan, you are probably better off leaving your mortgage alone, and applying for a home equity loan instead.
Your Next Step
Before you make any final decisions about a home mortgage refinance loan, you'd do well to do a preliminary "crunch" of the numbers. If you are looking to get "cash-out" you might want to get actual quotes, from actual lenders, on both a home mortgage refinance scenario and a home equity loan, and then see which approach makes the best financial sense.
The good thing about it is that there's a quick, easy, and free way
to accomplish this, and it puts you under no obligation whatsoever. You can
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refinance rates. Compare quotes from up to 4 lenders at LowerMyBills.com
by entering your specific information on a single quick and easy form. You'll
receive up to 4 free quotes in a short amount of time, and you'll quickly be
able to confirm or refute the validity of your own preliminary estimates.
You may choose to proceed further with one or more of these lenders, or you may decide to go elsewhere for your home mortgage refinance loan, but at least you'll have a better idea as to whether the loan you have in mind is "do-able". The quotes you'll receive will take into account your state of residence, your stated general credit standing, and a number of factors that you provide that are specific to your situation.
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