What is mortgage refinance?
Mortgage refinance takes place when your existing mortgage is replaced by a new loan, which is better adjusted to your needs and has better interest rates and terms. The new loan is secured against the same property as your first mortgage.
Refinancing your mortgage usually means lowering your interest rates, which automatically lowers your payments. Rates can be lowered because of changes in the market conditions or because of the improvement of your credit score.
How much does refinancing cost?
Refinancing fees may vary depending on state and lender, as well as interest rates, your credit score and the loan amount. To check possible costs of refinancing your mortgage, use one of the calculators you can find HERE. Mortgage refinance may be used for a lot of different reasons, e.g.:
- home renovations or other home improvements,
- paying off debts,
- getting a cheaper rate,
- raising money for big purchases.
What do I need to get a refinance loan?
To qualify for a refinance loan you need equity in your home. For most refinance loans, your existing mortgage balance should not go beyond the 90% of the appraised value of your home. You must also provide a verifiable source of income and, in some cases, a good credit history.