If you requested both: a mortgage loan and a home equity loan, you can refinance both loans and get only one loan together with a single monthly payment but with the same or better terms than the average of both outstanding mortgage loans. This can be done by applying for a refinance mortgage loan!
Home equity loans (also so called 2nd mortgages), are secured with the same asset as the main mortgage loan. With other words: when refinancing the home loan, you can include also your 2nd mortgage or home equity loan. This can have many advantages like:
Fewer monthly payments;
Saving lots of money on interests;
Receiving lower installments;
Less overall debt exposure.
Refinancing can save you thousands of dollars on interests! Home equity loans normally come with higher interest loan rates than mortgage loans. By obtaining a lower rate refinance home loan, you will be saving money on your mortgage loan but also saving (even more money) on your home equity loan.
In case of refinancing you will unify both loans and therefore get a longer repayment program & lower monthly payments. The loan installments will be definitely lower than the combination of mortgage loan payments and the home equity loan payments when they are separately. This will improve and ease your financial situation and income!
Another benefit of Mortgage loans is that there are a variety of ways in which you can repay a mortgage loan. The repayments may depend on locality, tax laws and prevailaing culture. The most common way to repay a loan is to make regular payments of the capital, also called principal and interest over a set term. This is commonly referred to as (self) amortization in the U.S. and as a repayment mortgage in the UK. A mortgage is a form of annuity and the calculation of the periodic payments is based on the time value of money formulas. Certain details may be specific to different locations: interest may be calculated on the basis of a 360-day year.
LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance.
