Question:

Mortgage Refinancing Advice

by Guest114  |  earlier

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Hello, I need some financial tips that I can consider before refinancing a home Loan, Please help me, I really need answer. Thanks.

 Tags: advice, mortgage, refinancing

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1 ANSWERS

  1. kate

     Falling interest rates usually persuade homeowners to refinance mortgages, but interest rates are not the only vital element to consider when you are looking at a new home loan. Several mortgage refinancing plans bring myriad processing fees and end up adding to the principal at the end of a loan and prolonging the term of the loan, which join up money that might be more appropriately invested somewhere else. Mortgage refinancing is a difficult process, and there are many factors to be considered before signing off. Weigh these financial costs and advantages when considering a change in mortgage plans. The chief disadvantage to refinancing a home loan is the additional loan fee that comes up in the further process. Lenders and brokers are in the business of making money, and try to charge you at every possible step. Drawing up a new mortgage may increase any number of procedural costs, processing, administration, application, checking, document preparation, appraisal, credit report, notary, recording and many other. On the same time one of the significant benefits of refinancing a home loan at a lower interest rate is the potential to pay less in the future, and even to minimize one’s monthly payment rate. If one abide the new plan long enough to break even on the fees incurred during the process, there will be money saved in the long term and more liquid cash flow each month to invest somewhere else. If you have achieved the means, you might also consider shortening the amortization period on the mortgage by increasing the monthly payment at the less interest rate. This can save even more money in the future and by shortening the overall length of the home loan period, one can experience true financial independence bit earlier in life.

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