Why do homeowners choose to remortgage their homes? This is a tricky question to answer as there
are many reasons that people decide the time is appropriate to refinance their
current mortgages. One reason people
refinance is to get out of a flexible rate mortgage. Some refinance looking to take advantage of
the equity that has built up.
The equity money can be used to pay off high debt credit
cards, remodeling projects or whatever the homeowner desires. Also, homeowners looking to lock in a lower
fixed rate mortgage will also refinance when the housing market interest rates
dropped. The main objective homeowners
have for refinancing is to save money.
Lower interest rates lead to lower payments thus increasing the money
you have to save.
If you current mortgage situation is coming to an end you
may look to refinancing. Some mortgages
are meant to draw in new homeowners and thus offer low interest rates for an
introductory period. After this period
of time your mortgage rate jumps, increasing the payment of your mortgage. What homeowners do at this point is to
refinance their current mortgage.
The old mortgage is going to try to reap the loss they have
taken in offering you the low introductory rate to begin with. In this situation when homeowners refinance
that are looking to get a lower rate then what their current mortgage is going
to jump up to. It is best to start
shopping for a new mortgage in this situation about twelve to fourteen weeks
before the introductory rate ends.
Another reason that homeowners look to refinance is to get a
better rate on their fixed mortgages. For
instance, home mortgages obtained in October of 1981 were around eighteen
percent where as today mortgage rates are around three and a half percent for
thirty years. As you can tell this is a
huge difference and therefore will save the homeowner thousands of dollars over
the course of the home loan.
Any time interest rates are lowered it is important to look
into how much you will save verse how much it will cost to refinance to see if
it is something you need to look into more. Also consider any fees that may be
added to exit the mortgage you currently have.
The costs to refinance need to be consider as much as the savings.
In our next installment on home mortgages we will look into
other ways refinancing helps to save you money over your current mortgage
situation.
Cross Country Mortgage
in Brighton, Michigan provide mortgage services for clients including
new home loans, refinancing, reversed mortgages, new purchase home mortgages
and home equity loans to the entire Livingston County area including Brighton,
Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.
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