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Home Mortgage Loan Refinance – Uses and Benefits
- Mortgage Refinance To Lower Your Mortgage Rate and/or Payment
Even a small reduction in your mortgage interest rate can make refinance worth the cost and time. When you refinancing to lower your monthly payment you free up money for other uses. If you plan to stay in your home for four years or more when you refinance you may want to and consider buying down your rate to further reduce your monthly payment.
- Mortgage Refinance for Cash Out Of Your Home
Home loan mortgage refinancing can allow you to get cash out of your home equity for a variety of purposes: to help pay for education expenses; medical expenses; a vacation home; or home improvements. Mortgage refinancing provides an inexpensive way to accomplish these goals, and the interest you pay is tax deductible.
- Mortgage Refinance for Debt Consolidation
If you have debt outside of your mortgage and you have equity in your home, refinancing your home can improve your financial position. It’s likely you are paying a much higher interest rate on credit cards consumer finance loans and auto loans. Through mortgage refinancing you can pay off all these debts and have one loan at a lower rate. Not only will your monthly outlay be greatly reduced and you’re paying less interest, but the new payment will be tax deductible.
- Mortgage Refinance To Change To A Fixed Rate From An ARM
Adjustable Rate Mortgages (ARMs) can be a great way to go when mortgage rates are low. At the end of 2009, rates are historically low. Since they’re unlikely to stay this low over the long term, the general consensus is they can only go up. For a finite period the rate on an ARM is fixed. As rates increase, that ARM quickly becomes a significant burden; when the finite period ends, the new rate can be considerably higher. As the likelihood grows that rates will increase that ARM quickly becomes a significant burden. Your payments and interest costs could even double. Now is the time to consider mortgage refinancing into a fixed rate loan. If you plan on staying in your home for at least 3 years refinancing your mortgage into a fixed rate will likely result in major savings. Perhaps more important than saving money, a fixed rate gives you peace of mind of knowing that your payments will not be increasing.
- Mortgage Refinance To Pay off Your Home Loan Faster
You can structure a mortgage refinance to pay off your home sooner than under your current mortgage. By refinancing into a 20, 15, or even 10 year fixed mortgage, you will receive a lower interest rate. Your payments may go up, but each month you dramatically increase your equity in the home.