Whether you’ve been thinking about ways that you can draw on your home equity to fund a renovation project or you want to take advantage of low interest rates before they rise again, refinancing your mortgage is an excellent option.
In today’s blog post we’ll introduce mortgage refinancing and discuss
a few of the ways that you can use this tool to help accomplish your
Cash-In and Cash-Out Refinancing
Many homeowners refinance their mortgage in order to take some of the
home equity out for other purposes. In a “cash-out” refinancing, you
take out a new mortgage loan which is greater in value than your current
loan. After paying off the existing mortgage you’ll receive a check for
the difference which can then be reinvested in home upgrades or put to
use elsewhere in your financial portfolio. You may also be able to get a
better interest rate in this type of refinancing, saving additional
money over the long term.
Do you owe more on your mortgage than your home is currently worth
but still want to take advantage of lower interest rates? If so,
“cash-in” refinancing is an option that can help you to avoid the
mortgage insurance costs that you may be facing when you refinance. As
the name implies, cash-in refinancing will provide you with a loan that
is for less than the amount that you currently owe, so you’ll need to
add “cash-in” to make up the difference.
Home Affordable Refinance Program or “HARP” Refinancing
If you find that you’re unable to refinance your mortgage as the
value of your home has declined, the federal government’s Home
Affordable Refinance or “HARP” Program may be an option. HARP was
developed to assist homeowners in the wake of the 2008 financial crisis
and the resulting instability that was caused in the real estate and
mortgage markets. If you have been making your mortgage payments on
time, have a mortgage guaranteed by Fannie Mae or Freddie Mac and your
current “Loan to Value” ratio is greater than 80% it’s likely that
you’ll qualify for HARP refinancing.
The above are just a few of the ways that you can refinance a
mortgage to better suit your needs and financial goals. Contact your
local mortgage professional today to learn more about refinancing and to
discuss how you can tap in to the home equity that you’ve built up over