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About Refinancing There are many reasons to refinance your current mortgage loan. Many refinance to take advantage of lower interest rates, allowing them to reduce their monthly payment without adding to their total mortgage. Others refinance to a shorter-term loan in order to pay of their home faster. By shortening the term of their loan, the monthly payment goes up and the home is paid for quicker, but much less is paid in interest over the course of the loan. A third reason to refinance is to take advantage of equity gained in the home by “cashing out” and using the funds for any purpose, including, home repairs and upgrades, debt consolidation, or children's education. Refinancing your home is the process of paying of your existing loan with a new one and is much simpler than many homeowner’s realize. Your new loan could be for a better interest rate, a shorter/longer term, or a different amount. In fact, your new loan could be an entirely different type. For example, instead of an adjustable-rate mortgage you could opt for a stable, fixed-rate mortgage.
How do I refinance my existing home loan? The first step to refinancing your home is to identify why you are refinancing. Do you want lower payments? Do you want a shorter or longer term? Do you need extra money? Once you identify why you want to refinance then you are ready to select the proper type of mortgage for your. Some of your choices include:30-YEAR FIXED-RATE REFINANCE Choose this when:
CASH-OUT OPTION If you have equity in your home, you can refinance for an amount higher than your current mortgage, using a portion of the equity in your home. You can use the difference for home improvement, debt consolidation, or whatever you choose. A cash-out refinance can be done in conjunction with several loan programs, including 30-year fixed rate loans. Can I make extra payments so I can pay off the loan more quickly? Depending on your specific loan, and what your state allows, it is often possible to make extra payments to shorten the life of your loan. Any extra payments made are applied directly to the loan’s principle and can have a huge affect on the amount of interest you ultimately pay. Contact your Southern Trust Mortgage loan officer today to determine if you could benefit from refinancing your current mortgage.
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