What Is Refinancing?

Refinancing is a process in which you pay off one or more existing debts with a new home loan

. If you have perfect credit, lots of obvious income, and plenty of equity, refinancing is sometimes a good way to obtain a lower interest rate or to convert a variable rate loan to a fixed rate.

It is also a way to save money and take advantage of the low interest rates. Specifically it is the process of taking out a new mortgage, and using the money to close out or pay off a current mortgage. If you refinance into a lower interest rate, you'll reduce your monthly mortgage payment even if your new mortgage is for the same amount as your current mortgage. Obtaining a new mortgage involves costs of its own. In deciding whether or not to refinance you need to compare the savings of a lower monthly payment against the costs of refinancing.

Refinancing gives you the chance to replace your current mortgage with a new loan with a favorable rate and terms that you can afford to manage. The new loan is offered against the same property as the collateral and may or may not exceed the current loan balance. The new loan funds are used to pay down the current mortgage while any remaining cash can be used to your best advantage.

Refinancing lenders often require a payment of a certain percentage of the total loan amount as part of the process of refinancing debt. Typically, this amount is expressed in "points" (also sometimes called "premiums"), with each "point" being equivalent to 1% of the total loan amount. Therefore, if the refinance option selected involves paying three points, then the borrower will need to pay 3% of the total loan amount through the process. Most refinancing lenders offer a variety of combinations of points and interest rates. Paying more points typically allows one to get a lower interest rate than one you would be capable of getting if one paid fewer or no points. Alternately, some lenders will offer to finance parts of the loan themselves, thus generating so-called negative points which also called discounts.

The decision of whether or not to pay points, and how many points to pay, should take into consideration the fact that with points, one tends to trade a higher upfront cost in exchange for a lower monthly premium later on. Points can be paid out of the cash saved by refinancing the loan in the first place.

As a general rule, refinancing truly works if the interest rates are low and if it saves lots of money. In addition, by refinancing one is able to get better credit because he will be able to make your payments quicker.

Check how refinancing can ease your worries? Feel free to call us at 800-630-0650 and one of our Professional Senior Advisor will be more than happy to answer all of your questions. We've helped thousand of senior homeowners solve their financial problem, it's time we help you.

Tim Jacobs

Golden Years Mortgage Solutions

Your MoneyWhen You Need It

www.GoldenYearsMortgageSolutions.com

(800)630-0650

tim@goldenyearsmortgagesolutions.com

Tim Jacobs @ Golden Years Mortgage Solutions www.GoldenYearsMortgageSolutions.com (800)630-0650 tim@goldenyearsmortgagesolutions.com Golden Years Mortgage Solutions is a reverse mortgage approved FHA Lender. Weve helped thousands of senior homeowners solve their financial problems. Our agents and brokers collectively have over 60 years of experience in Reverse Mortgage Loans and general financial services, including managers who are industry pioneers with more than 12 years of reverse mortgage experience. Our dedication to providing financial solutions for seniors is evidenced by the number of referrals that come from our existing clients.

by: Golden Years Mortgage Solutions

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