Home Loan Refinancing

Home Loan Refinancing in Maryland, Virginia, & Washington, DC

If your original mortgage contains terms that are not ideal, such as a higher interest rate, then you may want to consider home loan refinancing. Home loan refinancing allows you to obtain a new mortgage that provides better loan terms. Basically, the second loan pays off the first mortgage, thereby replacing it. Refinancing is an excellent option for borrowers that have a good credit history since it can provide them with a lower interest rate – however, it can be a risky option for borrowers with poor credit history or that have too much debt.

Why You Should Consider Home Loan Refinancing

First of all, if your credit has improved drastically since you took out your first mortgage, then you may want to consider home loan refinancing since there’s a good chance you may be able to qualify for better interest rates. This could happen due to an advancement in your career or due to a switch to a higher paying job that has allowed you to pay off old debts.

Refinancing your home is also a good option if you need money for another large purchase; for example, if you are looking to buy a new car, or if you need the money to pay down a large debt, such as credit card debt. To do this, you would refinance your home with the purpose of taking equity out of the property. A home equity line of credit will be calculated by appraising the home. Your lender will then decide what percentage of that appraisal they are willing to loan to you. Once this is done, the balance of your original loan is subtracted – the remaining amount is provided to you as your loan. Many borrowers will use the loan provide via home loan refinancing in order to improve the value of their property by making home improvements.

The Risks of Home Loan Refinancing

While there are some great benefits to refinancing your home loan, there are some risks to keep in mind. First of all, most mortgage agreements contain an agreement that allows the lender of your original loan to charge you a fee for paying down your existing mortgage using a line of home equity credit. These fees can add up to thousands of dollars. If you are refinancing, make sure it will be worth incurring the penalty over and that the loan will cover the penalties in addition to the original mortgage.

Refinancing your home can be a great way to lower your interest rate or obtain an additional loan for other purposes. Just be sure to understand the risks of doing so and keep in mind that most lenders will require you to maintain your original mortgage for a period of at least 12 months before you are allowed to refinance. You can choose to refinance with a different lender, but your original lender won’t typically require another title search or appraisal.

Refinance Your Home With Eagle Creek Today

For more information about home loan refinancing, contact us at Eagle Creek Mortgage today.