If you’ve been saving for a rainy day, that rainy day is now. Refinancing your mortgage can help you save money now so you can spend it on a shiny new roof or a big-screen TV. How to Refinance Your Home Loan
However, before you refinance, you need to do your research and find the right mortgage refinancing solution for your specific circumstances.
There are several options available, including replacing your current mortgage with a standard loan or converting your existing loan into either a loan for equity building or a debt consolidation loan. Refinancing is one of the most popular options because it allows you to break up your existing mortgage into several smaller loans with different interest rates and terms. Here’s how to refinance your home loan — from beginning to end.
Look At Your Mortgage and Credit Report
Mortgage refinancing is a two-step process. First, you refinance your existing mortgage, which breaks up your original loan into smaller loans with different interest rates and terms. Then, you apply for a new mortgage, which bundles all of the loans into a single mortgage loan with a particular interest rate and terms. Make sure to compare interest rates and terms on different refinancing products to ensure you’re getting the best deal. Your mortgage lender can help you with this, but make sure to do your research and apply for loan types that fit your specific needs.
Decide What’s Right for You
On one side, you have your finances — your income, your outgoings, and your desired payments. On the other side, you have your wants and needs — what you’d like to have, why you want it, and how you’d pay for it. This may be more of a list than a detailed analysis, but it’s a start. Now, based on what you listed above, decide what type of mortgage refinancing is right for you.
Use an Online Refinancing Tool
There are plenty of online refinancing tools that can help you with your refinance. These tools allow you to view your current mortgage, compare interest rates, and make payments directly from your computer or mobile device. You can also track your loan’s progress and make adjustments from your computer or mobile device.
Look Into Different Loan Types
There are a variety of different loan types that you can refinance with. These include conventional, mortage, home equity, and cash-out refinance. Depending on your unique situation, you may want to consider refinancing your conventional mortgage into a mortgage loan with a lower interest rate or a cash-out refinance. Refinancing your mortgage into a cash-out refinance can save you money in the long run because you’ll pay less interest on your loan. There are tons of different loan types and refinance options, so make sure to do your research and apply for the right loan type(s) for your specific circumstances.
Apply For a Home Equity Line of Credit (HELOC)
A home equity loan is a great way to increase your home’s value in the event that you get a divorce or lose your job. Home equity loans are interest-only loans and you won’t be required to make a substantial payment until property values rise above your home’s original estimated value.
You can usually get a home equity loan from a private lender or through a bank or credit union. To get the best interest rate and terms, shop around and comparison-shop for multiple lenders. However, once you choose your lender, you can’t go back — your lender’s actions are binding on you. The interest rate you choose will also determine how much you can pay over the life of the loan.
As you can see, refinancing your home loan is a great way to save money and get a fresh start on the right foot. Plus, it can be done at a lower interest rate and with a shorter loan term. Whatever you do, don’t forget to shop around for the best deal and don’t settle for anything less than perfect. Your loan payoff should be your number one priority, and refinancing your loan will help with that.