Tired of paying High Rate of Interest on your loan? Why not enjoy the benefits of lower interest rates prevailing in the market? You no more have to spend your earnings on high interest rates. Thanks to Mortgage Refinance where you can repay your loan at low rate of interest. Why bear the brunt of a high rate of interest decided years ago?
High rates of interest eat up your earning leaving you with no or very little saving to fulfill your dreams. You can now save your income, and utilize it for fulfilling your dreams which earlier went in paying high rates of interests.
Refinancing your loan helps you to shorten the period of repayment of loan. Suppose, the duration of your mortgage is for 20 years and you opt to refinance as the interest rates are low. You still pay the same EMI as before. This will help you to repay your loan faster, say in 10-15 years. As a result you build faster equity in your home. The extra amount you pay goes towards the payment of the principal.
The market rate of interest won’t be low forever. So, it is better to opt for FRM. In order to avoid the swinging market rates, it is wise t fix your rate of interest. Contrarily, if your stay in the house is for a short duration, stick to ARM.
Refinance lets you skip PMI. When you refinance your loan, the PMI which you used to pay earlier need not be paid. Since you have already paid your EMIs on time, the equity in your home has also increased at the same time the value of the house has also increased. And, you also have paid a considerable amount of EMIs which has covered almost a major part of your principal. Therefore you no more need to pay for the PMI anymore after refinancing your loan.
As the equity on your house increases, your access to cash increases. You can liquidate this equity and get higher amount than the principal due and take extra cash. Imagine there is so much that you can do with that cash, either put it to renovate your house or into your child’s education.
• Saturday, February 26th, 2011
Category: Real Estate |