Welcome to Refinancing Guide
Refinance Lead Article
. For a permanent link or to bookmark this article for further reading, click here.
Refinancing Mortgage
Refinancing mortgage loans is becoming quite popular today with many homeowners. While years ago when you got a mortgage to buy a home, you usually paid on the same mortgage for years until it was paid off, a lot has changed since then.
One reason why refinancing mortgage loans is so widely used is that there is a larger variety of types of mortgage loans available to home owners. Banks now offer refinancing mortgage loans, home equity loans, reverse mortgages and more.
Debt consolidation is another reason many homeowners choose refinancing mortgage loans. Often they need additional cash for a vacation, wedding, medical bills or other personal expenses. Anytime you get a loan of a sizable amount, the bank requires the borrower to put up some collateral towards the loan.
You're probably wondering where the extra collateral is coming from, since your home may be your only asset.
When a bank borrows money for the purchase of a home, for their own protection, they usually will only borrow up to 80% of the value of the home. They're not as concerned with the price of the home as they are the value of the home.
In case of a foreclosure, it's the value of the home that will concern them. If you are buying a home that's valued at $100,000, they'll borrow up to $80,000 towards the purchase. As the years go by, the balance of the loan decreases while the value of your home increases.
If you're considering refinancing your mortgage loan for extra cash, they'll do an appraisal on your home. If your home is now valued at $120,000, they'll borrow up to 80% of this amount, which is $96,000. If the balance of your mortgage is down to $70,000, you have $26,000 of extra equity on your home to borrow against or use as collateral.
This is why many people choose refinancing mortgage loans as a way to pay off extra debts or get money for other expenses.
Refinancing mortgage loans is also used as a way to improve their credit scores and pay off other debts. By again using the equity in their home, they can redo their current mortgage and pay off debts at the same time, giving them less monthly payments.
With less monthly payments, they are able to make the payments on time, thus improving their credit rating. Refinancing mortgage loans is used for debt consolidation more than any other reason.
When banks take applications for loans, they always run a credit report before giving the loan. The higher your credit score, the better interest rate you'll generally be offered from the bank.
This is why it's important to make all your monthly payments on time. Some people that use refinancing mortgage loans as a means of getting out of debt find themselves paying a higher interest rate because their credit rating is worse when they originally took out their mortgage.
Refinancing mortgage loans often gives couples a second chance to get ahead.
Refinance Lead Specific links
Refinance Lead News
Push intensifies to pass home-loan refinancing bill - The Hill (blog)
Push intensifies to pass home-loan refinancing bill The Hill (blog) Zandi told the panel that even if policymakers fail to act, the revamped HARP program could still lead to 2 million to 3 million more refinancings that would bolster the gradually improving housing market. Still, the Democratically sponsored ... |
Wonkbook: The bad news Brits - Washington Post (blog)
Wonkbook: The bad news Brits Washington Post (blog) Uh-oh: "The eurozone crisis has led to the region's economy contracting at the fastest pace for almost three years and sent German business confidence tumbling this month." A man walks past a vacant building lot in downtown Madrid May 16, 2012. |
TEXT-S&P rates EquiPower Resources Holdings prelim 'BB' - Reuters
TEXT-S&P rates EquiPower Resources Holdings prelim 'BB' Reuters May 24 - Overview -- Power project EquiPower Resources Holdings LLC is refinancing its senior secured bank loan due 2018 and revolver due 2016 with new first- and second-lien term loan facilities. EquiPower is adding the 578 megawatt (MW) natural ... |
Chinese property developers face heightened refinancing risk - The Asset
Chinese property developers face heightened refinancing risk The Asset They key issues remain high inventory and competition, which could lead to a price war,” it adds. The heightened refinancing risk is high especially for those developers with a huge proportion of their maturing debts in trust loans and offshore debts. |
FHA Streamline Refinance Expert, Steve Hays, Launches New FHA Refinance Website - PR Web (press release)
 PR Web (press release) | FHA Streamline Refinance Expert, Steve Hays, Launches New FHA Refinance Website PR Web (press release) A struggling homeowner that is experiencing a financial setback can find that a rising mortgage could lead them into bankruptcy or foreclosure. FHA streamline refinance programs have been available to homeowners for decades. An alarming statistic is ... |