Refinancing refers to when you take a new home loan to pay off your existing mortgage. Generally, refinancing involves approaching another mortgage lender to loan you the amount you need to pay the previous lender. In layman’s terms, this is basically using new loan proceeds to pay another loan.
Often, you can also combine your primary and the second mortgage to avail a new loan. In doing so, you have the option of negotiating new terms for your loan.
Citycreekmortgage.com says that in the Utah refinancing your home scene, here are some simple things to keep in mind:
• When refinancing, you have the chance to avail of lower interest rates. With a lower interest rate, you end up paying less, and in the process can repay your loan faster as well. Your monthly payments also decrease.
• Refinancing allows you adjust or change the length of the mortgage. Shorter terms means that you have to make higher monthly payments, but you pay your loan off much sooner.
• You can change the kind of mortgage on your home when refinancing. Changing from fixed-rate mortgages to adjustable-rate mortgages can change the amount you need to pay monthly.
• Charges for refinancing vary from lender to lender. It can also depend upon the regulations in each state.
• Credit history can influence the rate of interest charged for refinancing. The better your credit history, the lower the interest rates you can avail of, which means less total outlay.
• To refinance your home, the lender may require you to pay one-time costs for various purposes, such as application fees, loan origination fees, appraisal and inspection fees, etc. You may also have to pay certain dues for a loan insured by federal government housing programs.
Many lenders in Utah offer refinance options. Do some research and ask around before choosing a lender to refinance your mortgage. Doing this nets you a second wind to support your dream home.