Refinance mortgage is simply the process of getting a new mortgage to reduce monthly payments, to lower the interest rates, or to take cash out for large purchases. It is the task of repaying a loan by taking out another one and using the same property as a security. This, in turn,allows you to secure a lower the interest rate.
A person who acquired a mortgage in the past may have difficulty to pay it now due to financial setbacks. If you are one of these people, don’t lose hope. There is a way to recover from this stressful situation and that is to have a refinance mortgage.
People refinance for a number of reasons. Here are some of the common ones:
- Lower interest rate – Reducing it would not only help save money, it also increases the rate at which the person builds equity in the home, and it can decrease the monthly payments.
- Shorten the term of your loan – With a lower interest rate, a person would be able to pay more deposit/advance. Thereby, the term of the loan may be shortened.
- An adjustable-rate to a fixed-rate loan – Converting to a fixed-rate can result in a lower interest rate and eliminates concern over future interest hikes.
- Lower payments – A drop in the interest subsequently leads to a drop in monthly payments. Therefore, you will have more cash on hand for other expenses.
- Cash out home equity – Home equity is the value of ownership built up in a home or property that represents the market value minus any remaining payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates. With the help of refinance mortgage, the equity in the home can appreciate faster.
If you need a professional help, call refinance mortgage Perth now.