Mortgage Refinance FAQs
Fortunately for many homeowners, a mortgage refinance has become their answer to their financial stress and monthly mortgage payments. If you consider a resident saddled with a mortgage that is under extreme pressure because of the adjustable rate mortgage, then you can imagine how precarious their situation is every month. If you combine this with the economic recession that is now ongoing, then you have a fairly clear picture of how tumultuous the budget of today’s average American household is, with a steep price on security and stability.
Paying off a mortgage with a high interest rate can be very daunting for the average American especially if he is bombarded daily with possible threats to job security.
A mortgage refinance has become a beacon of light for many, and initially, the most frequently asked questions about a refinance can be read below. Naturally, each state, or even each city will have slight differences (a Philly mortgage refinance will be slightly different to a Boston home refinance) mostly in the refinance rate applied.
Is a refinance for me? This question can really only be answered by you. However, ask yourself what your chances are of continuing without defaulting on your current mortgage arrangements. Or, are you always late in your monthly payments or on the verge of defaulting your loan? You could also ask yourself if you need funds and if needs – you can use loan calculator. A refinance is not just for those who are having financial difficulties. It can also be used as a means to get needed cash provided there is enough equity on the house.
Is it possible to get a higher cash-out refinance loan than the value of the house? At the moment, it would be difficult to find a company willing to give a loan which is higher than the value of the house, but there’s no harm in trying since the real estate market is slowly on an upswing in some states.
It is commonly asked regarding the comparison between a refinance and a home equity loan. While there may be a variety of differences, the most common is that a refinance gives one a lower monthly amortization compared to a home equity loan, although if you look at the bigger picture, you pay more with refinance because it is based on a longer term.
The monthly amount to be decided is also frequently asked by many applicants. Basically, the monthly figure is determined by the following: down payment, prevailing interest rates, loan amount and loan term, area, credit history and financial status. Brokers have to even rely a little bit on their gut feel about your situation as well as how the interview unfolds.
Getting a refinance is a major decision that will need to be completely thought through. This means gathering as much details as you can so that your decision will be based on facts and figures.