When you refinance a home loan youre acquiring a loan and the money obtained from it has to be destined to pay off the outstanding loan so the new loan will be secured with the same asset as the previous loan.
There are a few reasons why someone would want to do that. You can lower your monthly payments on your home, you can benefit from lower interest rates or you could use extra money to consolidate debt.
Paying less interest:
If you had bad credit when you got your current home loan, you probably are paying a high interest rate and thus youd benefit from a refinance by reducing the amount of money paid on interests. If youve been paying religiously your monthly mortgage installments, then youve probably improved your credit over time and you should be in condition of getting a refinance mortgage loan at a reasonable rate.
When is refinance convenient?
You may wonder when is refinance convenient, the truth is there is no general principle on this matter, but most financial assistants consider a 1.5% lower interest rate to be worth refinancing. If you refinance for a higher amount than the current loan you may also get rid of other debt like...
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