Home Equity Loan Refinancing
Home equity loan refinancing not only allow you save money & time, but to obtain a large amount money to use.
Nowadays peoples refinancing their home are for the following reasons :-
1) To secure a favorable rate, 1st mortgage might be adjustable rate, normally the rate will increase from the middle period of installment until end. The 2nd mortgage may choose the fixed rate option, if the rate is low.
2) To reduce the interest rate, the previous interest of 1st mortgage loan might higher than 2nd mortgage. Use the 2nd mortgage loan to pay-off the previous loan.
3) From the 2nd mortgage, you can save a significant amount of money on a cheaper interest rate.
4) Lower the monthly payments - to reduce your financial burden.
5) Getting more cash in hand, to invest in business or for other uses.
When to refinance
Refinancing must make it at right time, you must regularly check the market rates. When the market rates is as low as your expectation, that's the right moment to refinance your home.
Things to be aware
First, some of the loan agreement may have the "Locked Period" for the loan. For example, the 1st mortgage you took may have 5 years "Locked Period". That's mean you can't refinance within the 5 years. If you insists, the penalty fees will impose to you. Use the loan calculator to check out how much will save from refinance, compare the saved amount with fine amount.
Check out how much of the penalty fees, the fees will be less when "lock Period" is nearly over. Let say you refinance at the year 4, the penalty definitely less than the 1st year.
If your loan is nearly pay-off, it is not worth to refinance. Do not forget about the admin fees, contract & document fees and other charges.
For more home loans information, please check out
Home Loans instead of Home Equity Loan Refinancing
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