Why do homeowners choose to remortgage their homes? This is a tricky question to answer as there are many reasons that people decide the time is appropriate to refinance their current mortgages. One reason people refinance is to get out of a flexible rate mortgage. Some refinance looking to take advantage of the equity that has built up.
The equity money can be used to pay off high debt credit cards, remodeling projects or whatever the homeowner desires. Also, homeowners looking to lock in a lower fixed rate mortgage will also refinance when the housing market interest rates dropped. The main objective homeowners have for refinancing is to save money. Lower interest rates lead to lower payments thus increasing the money you have to save.
If you current mortgage situation is coming to an end you may look to refinancing. Some mortgages are meant to draw in new homeowners and thus offer low interest rates for an introductory period. After this period of time your mortgage rate jumps, increasing the payment of your mortgage. What homeowners do at this point is to refinance their current mortgage.
The old mortgage is going to try to reap the loss they have taken in offering you the low introductory rate to begin with. In this situation when homeowners refinance that are looking to get a lower rate then what their current mortgage is going to jump up to. It is best to start shopping for a new mortgage in this situation about twelve to fourteen weeks before the introductory rate ends.
Another reason that homeowners look to refinance is to get a better rate on their fixed mortgages. For instance, home mortgages obtained in October of 1981 were around eighteen percent where as today mortgage rates are around three and a half percent for thirty years. As you can tell this is a huge difference and therefore will save the homeowner thousands of dollars over the course of the home loan.
Any time interest rates are lowered it is important to look into how much you will save verse how much it will cost to refinance to see if it is something you need to look into more. Also consider any fees that may be added to exit the mortgage you currently have. The costs to refinance need to be consider as much as the savings.
In our next installment on home mortgages we will look into other ways refinancing helps to save you money over your current mortgage situation.
Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.