Did you know that 2016 data reveals an alarming fact about the cost of living? While household income has grown 28% in the last 13 years, cost of living has increased 30% at the same time. What it costs an individual to live is increasing faster than what people are being paid. Before you panic, you might want to learn more about your financial options. One way to mitigate the potential financial fallout is by refinancing your mortgage. To learn how that can benefit you, you should first have a full understanding of how mortgages work.
A mortgage is an agreement between a lender and a homeowner by which the lender agrees to lend the homeowner money which the homeowner will be required to pay back with interest. The homeowner, in exchange for this deal, gives the lender the title of the property. Once the debt is paid off, the homeowner has the title returned.
Conventional Mortgage Refinancing
Refinancing your mortgage is replacing your old mortgage with a new one. Home loans are agreements to pay your lender whoever much money you agree upon each month, for however many years you would like to pay that amount of money, and at whatever interest rates are available. It’s a very flexible contract really, but sometimes circumstances change a while after you’ve entered into the agreement. Conventional refinancing is just a revision of the original contract in a sense.
One reason people refinance their mortgages is that they need the money, maybe they want a kitchen remodel, or to buy the boat they’ve been looking at finally. You can get cash back from the equity you have in your home if necessary. Another reason people refinance is to have smaller monthly payments. People want a lower monthly payment when they can’t afford their original mortgage terms. Those who want a larger monthly payment refinance to pay off their mortgage quicker. They do this because they can afford to pay more each month. Remember, refinancing is a somewhat fluid process.
If you are looking to refinance your mortgage, give us a call today to discuss a fair and customized approach to your needs. The cost of living might be on the rise, but so are housing prices. If you need help paying the bills, or if you want to speed up the process of paying off your house, refinancing might be the best option for you.