If you are a homeowner in San Diego, you may want to consider a mortgage refinance for a few different reasons. You may be in need of some extra cash for home improvements or other purposes, or you may be interested in obtaining a lower mortgage rate, or your reasons for considering a refinance may be some combination of these. Whatever the reason, here s some basic information about mortgage refinancing that everyone should know.
Refinancing means applying for a secured loan to pay off another secured loan against the same assets or property, and has the potential to save the borrower money. A house is the largest asset that most people will ever own, and a mortgage payment, likewise, is the largest payment that most people have to work into their monthly budget. When you purchased your home, the interest rate that you are currently paying was determined by your credit rating, your down payment amount, and most significantly, the prevailing interest rates at the time of your loans origination.
If you opt for a refinance when the interest rates are lower, you may be able to qualify for a lower rate as well, which will lower your monthly loan payment and save you a significant amount in the long run. You can also shorten the term of your mortgage, which again, can save you literally thousands of dollars in interest payments, and if the refinance rate s lower, but you elect to maintain the same monthly loan payment, you can build your homes equity more quickly, since your payment will go directly towards the principal, as opposed to the interest of your loan.
Depending on your situation, you may want to look into the possibility of a cash out refinance, which involves refinancing your current loan for an amount that is higher than your current principal balance and using he extra money for other purposes. This is a very common type of refinance, particularly since t creates the capital for home improvement projects, paying off high interest debt, and other personal use. There are many benefits of a mortgage refinance, which is why they are a popular option for homeowners.
As with any type of loan, there are certain conditions and pre qualifying criteria to be met, as well as certain risks. Your San Diego mortgage lender can help you to determine whether a San Diego refinance is a viable option for you.
