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A Flair for Refinancing

Posted by  on Apr 16, 2009
 
Would you like to reduce your monthly bills substantially, without sacrificing your favorite activities or luxuries? If so, second mortgage refinancing helps you reduce your monthly bill considerably. Sometimes, consolidation of two mortgages into one payment may also lower your interest rates.

Consolidation combines your first and second mortgages and it often results in a lower combined rate of interest.
Have you amassed equity over the years? Would you like to take advantage of record low interest rates? If so, second mortgage refinancing will benefit you when you. If the amount of equity you have accumulated is probably very large, your mortgage falls under a low rate category. It goes without saying that the right time for refinancing is when the mortgage rates are low. The mortgage rate at which you first acquired the house should be higher than the current mortgage rate.

The process of second mortgage refinancing is simple. Second mortgage refinance starts a new loan account by paying off the first mortgage. In other words, second mortgage refinancing is in effect the same as taking out a new mortgage. Only this time, you will have the foresight to take advantage of market conditions and the flexibility of mortgage brokers.

In refinancing, the same procedures, such as submitting an application, paying a processing fee for the application and pulling your credit report will be followed. The second mortgage refinance fee includes settlement costs, discount points, etc. If your credit points have been coming down in recent years, lenders may not approve the refinance. Interest rates and number of credit points determine the total expense for a second mortgage refinancing. But do not be discouraged from approaching a mortgage broker with an open mind.

More than one mortgage payment monthly may cause some difficulty for borrowers. With that in mind, it is not necessary that you refinance all your mortgages. Second mortgage refinancing is not only convenient but it also saves money. Because of the inherent complexity of second mortgages, a thorough study of the advantages and disadvantages should be made before you decide to refinance your mortgage.

Every individual borrower is unique and therefore the nature of their refinancing will be unique. More often than not, second mortgage refinancing fetches better rates. In order to receive the best possible interest rate, it may be advisable to work on your credit score. This takes time but second mortgage refinancing is no easy decision. Therefore, you may have time to improve your credit score while you deliberate on refinancing. Improving your credit score is a crucial step in qualifying for a better interest rate. Sure, you can refinance to take advantage of a more favorable market. But when you improve your credit score at the same time, you could get an even lower rate. This, of course, translates to a small mortgage payment each month.

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