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Start Again with mortgage refinancing

Written by: Seymore Hennigan

If you are interested in optimizing your monthly payments on
debt, or simply looking to stretch your income a little further
each month, you might want to consider refinancing your mortgage.

There are two very basic ways to go about this. First, you might
consider switching from a fixed rate home loan, to an adjustable
rate home loan. A fixed rate home loan is a loan in which your
interest rate is “locked in” and does not change from year to
year. An adjustable rate home loan is a loan in which your
interest rate is dictated by the market.

The other option is referred to as a “cashout” refinance, in
which all your old loans are paid and new ones taken out. This
is a sensible option, because the interest you are paying on the
original loans is compounded and you eventually start paying
interest on interest. A new loan can provide you with the fresh
start you need.

When a lender is considering your mortgage refinance application
they take into consideration a number of factors including
current balance, monthly payment, and the remaining number of
months on your current mortgage. Your household income and your
debt-to-asset ration will also be considered.

If you are looking to consolidate your debt load or to simply
maximize your disposable income, mortgage refinancing might well
be your solution. There are few potential drawbacks to consider,
mind you. Many lenders will charge extra fees for early or
unscheduled payments, so be sure to ask your lender as many
questions as you can.

In the case of mortgage refinancing, you may want to consider
consulting a mortgage broker. A broker works for you, and not
for any particular financial institution. He can take your
application, and shop it around to various lenders. This will
give you the freedom to determine, to some degree, the terms of
your mortgage. It can often result in major cost savings,
because you essentially pit one lender against the other for
your business. It is definitely something worth looking into, if
you are serious about saving some money. If you aren’t serious
about saving money, you should be.

About the author:

Seymore Hennigan has worked in finance for many years. When he
is not crunching numbers or advising his family and friends on
investments, he writes freelance articles for
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