Date Posted: 2012-06-14 02:10:45
Site Posted: Myproperty.ph
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Home refinancing is one of the options that you have to potentially get you out of mortgage debt. It’s an option that allows you to pay back your loan on terms that are much easier to handle. Still, like any financing decision, it does have its pros and cons, which you should weigh before deciding that it’s the best option for you.
Pros
· The biggest advantage that you have with home refinancing is that you get to enjoy lower interest rates.
· If you used to have a fixed rate mortgage, where you pay the same interest throughout the loan term; you can change it to an adjustable rate mortgage so you can take advantage of lower rates when they happen.
· Depending on which payment set-up you feel most comfortable with, it’s possible to either extend or shorten the term of your loan.
· When you refinance your loan, you can increase your mortgage, which will allow you to pay off your credit card debts, personal loans and other debts.
Cons:
· When you refinance your loan, it means that you were unable to keep your end of the deal with your lender, which can cause them to impose a penalty.
· If you do choose to increase your mortgage, you’ll have to keep an even more careful watch on your finances so as to not go over your budget.
· Refinancing costs more than you think. When you get a home loan refinancing, you have to pay closing costs, as well as premiums on private mortgage insurance.
· When you decide to sell your house, the equity that you will get will be lower than if you hadn’t refinanced your loan.
Discuss a home refinancing, as well as other possible options, with an expert before you make a decision. Remember, your mission is to pay off your loan quickly and easily, not sink even deeper into debt.
Jillian Cariola, Writer
(cover image by fotosergio)
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