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Mortgage Refinancing -Things you should know

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by: No more debt !
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Date: Sun, 27 Jun 2010 Time: 11:07 PM

What is Refinancing?
Refinancing is the process by which an existing secured loan is being paid off by getting a new loan, of the same value, that is again collateralized with the same property as the former loan. it is especially for those who already have a mortgage but would like to have it refinanced and get a lower interest rate.

Types of Mortgages

1.Mortgage refinancing - This type of mortgage is mainly for those who already have a mortgage but would like to have it refinanced and get a lower interest rate.

2.Fixed rate mortgage - This type of mortgage are very good if the interest rate is low. When going for this type of mortgage, look out for the interest rate that suits you. By doing this you make sure that you actually get the lower rate.

3.Reverse mortgage funding- This mortgage would work for people who have their homes fully paid for and have no mortgage on it. it gives  you the opportunity to receive a stipend which you will get monthly from the equity carried by your home.

4.Interest only mortgage options - This type of mortgage lower the amount you pay during the first few years of your mortgage term. In your first few years of your mortgage, you are only paying for the interest thus making the subsequent mortgage payments much lower.

4.Mortgage loan modification - launched earlier this year. It is called the Make Home Affordable program. You can apply for a loan modification to reduce your payment or your interest rate.

Major reasons for mortgage refinancing

Arguably the best reason to move forward is if you've found a lower interest rate. Maybe your credit score has improved, or maybe the market is more favorable-either way a lower interest rate can save you a great deal of money over the term of your loan. Generally speaking, as a rule of thumb, it is worth pursuing if you can find a two percent lower rate. consider all these before you go for any type of mortgage refinancing; Lowering interest rate,Adjusting the length for mortgage,Shifting from an adjustable-rate mortgage to fixed-rate mortgage.

Refinancing is a decision that deserves careful contemplation. Mortgage refinancing may not be advisable for people who are interested in changing their primary residence. Refinancing may be foolhardy if the existing mortgage has prepayment penalties or if the loan is nearing maturity. Again, cash-out refinancing, that refers to refinancing for more than the current debt, may not be advisable since repaying the loan may prove to be cumbersome.

About the Author

I provide premium information on how to get the best Mortgage Refinancing deals over a range of categories to help suit the needs of Mortgages buyers worldwide.
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