Refinancing is the process of applying for a loan again. Refinancing offers homeowners the option of either reducing their monthly payments or paying less interest over the course of a loan. Mortgage lenders must get new home appraisals for refinance transactions. They will also need to obtain verifications of the homeowner’s employment, total family income, and existing debts.
So here are the top 7 Reasons you might consider refinancing a mortgage:
- To obtain a lower mortgage rate – The Bureau of Economic Analysis reported an average interest rate on an outstanding mortgage to be 5.098% in the first few months of 2012.
- To convert an Adjustable-rate mortgage into a Fixed-rate loan – Homeowners who are worried about inflation and have an Adjustable-rate Mortgage (ARM) refinance their home to get a more stable rate through the Fixed-rate loan.
- To get a mortgage on an already paid-off house – This is not technically refinancing, but it’s similar. Some homeowners who are mortgage-free get mortgages for a home that is already paid off to put extra cash in their pockets. Homeowners who want to start their own businesses may do this as well.
- To help consolidate debts through a cash-out refinance – There are not a lot of cash-out refinances being done now due to the crash of the housing market. However, there are still a few cash-out refinances that get done. Homeowners who do get cash-out refinances use the cash to pay other debts they may have.
- To cash out to buy other investment properties – There has been a new refinancing trend that is now widely popular. It involves homeowners refinancing their home to then use that money to buy other properties. The second property could be used as another source of income. The homeowner could choose to rent out the second property.
- To consolidate not one mortgage, but two mortgages – Some borrowers and homeowners refinance their homes to combine their first mortgage with their home equity line of credit.
- To help assist them with other familial issues – Parents who are homeowners will sometimes refinance their mortgage loan to help out with other family problems, such as the cost of a divorce lawyer, or bail money needed for a cousin who is facing foreclosure, or anything other matter.
Whether it is that you live in Boca Raton, Pompano Beach, Plantation, or Davie, there is a mortgage company you can trust that can help you refinance your mortgage. Ace Mortgage Loan Corporation can assist you with financing or refinancing your home. Call us today to get a consultation and determine what the best direction is for you to go through.