Refinancing Equity Loans Now
Refinancing, home equity loans, and such things as mortgage insurance, have pumped new blood into the mortgage industry, allowing homeowners to purchase their dream homes or to finance additions and other long-awaited home improvements. Today' s interest rates are at record lows (spring of last year they were close to where they were in the 1950's) and many homeowners are opting to refinance their old homes to take advantage of better home loan programs and different loan terms, the amount of time it takes to pay off the loan.
In essence, if the customer opts for a longer loan term, say stretching a 15-year plan out to a 30-year, then the monthly mortgage payment would be much less, especially when combined with a lower interest rate. And if they can afford slightly higher payments, they can shorten the term, thereby saving thousands of dollars in interest payments. A low minimum interest payment is crucial to paying off the loan in a timely manner, because the rest of the payment goes directly to the principal, which is the actual amount of the loan. Your loan is amortized, or lessened, only with what you pay towards the principal.
Mortgage insurance, as a protective mechanism for the lender, ensures the loan amount with a private insurance company, enabling them to accept a substantially reduced down payment from the customer. Shopping for a loan, from considering and weighing all of your options and all the way to closing, is a lengthy and involved process. There are many determining factors, such as choosing a mortgage company, comparing a direct lender vs. a broker, finding out what documentation is needed for the loan application, and understanding credit.