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Mortgage Broker Near Me: Mortgage Refinancing
If you're a homeowner, there's a good chance you've thought about refinancing your mortgage at some point. After all, mortgage rates are currently at historically low levels, so it's a great time to save some money on your monthly payments. But what exactly is refinancing, and how does it work? Keep reading to find out.
What is Mortgage Refinancing?
Mortgage refinancing is the process of taking out a new loan to replace your existing mortgage. The new loan will have different terms from your original mortgage, which could include a lower interest rate or a different loan term. When you refinance, you may also be able to get cash out of your home equity by borrowing more than you owe on your existing mortgage.
Why Should I Refinance My Mortgage?
There are a few reasons why you might want to consider refinancing your mortgage. First of all, as we mentioned earlier, mortgage rates are currently at historic lows. This means that if you refinance, you could potentially lower your monthly payments and/or the total amount of interest you pay over the life of the loan.
Another reason to refinance is if you need to make some home repairs or improvements and don't have the cash on hand to do so. By borrowing against your home equity, you can get the money you need without having to apply for a separate loan. And lastly, if you're unhappy with the terms of your current mortgage—for instance, if you have an adjustable-rate mortgage that's about to reset—refinancing can help you secure more favorable terms.
How Does Mortgage Refinancing Work?
The process of refinancing a mortgage is similar to the process of getting a new mortgage; you'll need to submit an application, supply documentation about your finances and employment history, and so on. Once your application is approved, you'll sign a bunch of documents and then begin making payments on your new loan. It's important to note that when you refinance, any existing equity in your home will become debt that must be paid back; in other words, if you have $50,000 in equity and borrow $75,000 by refinancing, then $25,000 of that loan will be considered unsecured debt (i.e., not backed by collateral).
Mortgage refinancing can be a great way to save money on your monthly payments or reduce the total amount of interest you pay over the life of the loan. However, it's important to understand how refinancing works before jumping into anything. We hope this article has given you a better understanding of what mortgage refinancing is and how it works; if you have any questions or would like more information, please don't hesitate to reach out to us!