Refinance a mortgage means you replace your old mortgage with a new mortgage. The borrower does it to get a better rate of interest and longer loan tenure.
When the refinancing is done, first, the old loan is paid off entirely. Then in place of the old mortgage, the new mortgage takes place. Maybe you needed cash for home renovation, or you wanted to change your lender, or you got a better interest rate.
The reason are many for refinancing. However, you might get a lower interest rate, but your home equity might be reduced. So, before you want to do it, make sure to calculate it. If you cannot do it on your own, take the help of a professional.
Sometimes lenders put penalties for refinancing. Suppose you want to know more about it, better to read the terms and conditions of the existing mortgage. It will tell you everything you needed to know about refinance regulation.
I hope this short answer will elevate your curiosity regarding refinancing a mortgage. If you want to know more, the doors of interest are always open for you.
How do you compare mortgage lenders?
Hey, thanks for asking an important question. It is undeniable that, when you are shopping for a mortgage lender, you get confused seeing all the details. However, in those details, there are at least 3 essential details that can easily compare the mortgage lenders.
The first thing is the rate of interest. It would help if you asked each lender about the current interest rate. The rates get changed every day, playing an essential role in choosing a good lender. Ask whether the rate is fixed or adjustable.
For a fixed rate of interest, you won’t have to worry much. But for adjustable rates, ask how the repayment will vary.
The second thing you should check is the points. The point is the fee taken by the lender or broker. Usually, to get a lower interest rate, you have to pay a higher point. Check the local newspapers to see what the point is currently offered in the market. Ask the lender too. It will clear the actual cost of the loan.
The third thing you have to know is the fees. With a mortgage, there are associated various kinds of fees. There is origination fees, broker fees, late payment fee, settlements, and underwriting fees. Every lender you check will have a different kind of fee.
These are the 3 essential points to compare the lender.
