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Refinancing is a process by which the existing loan is remitted with the proceeds of new loan using same property as security. However, refinancing is done with same lender or new lender. The objective of refinancing is to acquire many benefits like releasing the equity in your home, low interest rate, flexible repayment terms, etc. There are lot of types of refinancing such as House mortgage refinancing, house equity refinancing loan, Auto refinancing loan, commercial refinancing and refinancing car loan.
You are refinancing to get release of the equity built in your house in a period of time. House equity refinancing loan can be used for any purpose. Refinancing car loan permit you for changing the moneylender for good loan management and better rate of interest. This is the best way to avoid paying higher interest rate on the existing car loan. If you not capable of paying large installments, refinancing is very helpful to you. Refinancing helps you to extend the loan period and paying small installments as per your capacity. Thus, you can manage the loan amount in proper way.
There are different money lenders who provide refinancing to the borrowers for different purposes they need. Many website offer online application forms for refinancing at lower interest rate. You can compare several interest rates and get the good refinancing.
In the beginning of 1980s rates for the traditional 30 year, the fixed rate mortgages were 18%. Now a days the rates for the same loan type is 5%. Now some days recently it is 4% range. Many home owners bought when sky-high rates was there, now considering refinancing to get the advantages of lower rates. If you are one of them there are few costs involved for refinancing your house like appraisal, loan origination fee, title insurance. For balancing these costs, you can save by getting refinancing. You can use two percent rule which is general thumb rule. This rule tells that the difference in percentage between the current rate and the rate being provided should be 2 points at least. Therefore, if you are the borrowers in the 1980s, you get the rate now for 5%.
By lowering your loan rate you can find much difference in monthly mortgage payment. Lot of borrowers can save thousands of dollars over the loan period. The amount you save depends on your numbers. Approach a mortgage partner who makes the number reduced to find how much you can save by refinancing. Some borrowers change the type of loan even if they don’t save any money. Some borrowers change the type of loan to get the fixed rate mortgages. If you are residing in your house for 10 years or more you will get good equity fund because you are making payments for some time. Some borrowers decide to draw the money when they refinance the mortgage. Home equity is amount you paid for the house. The refinancing equity loan is the second loan to pay the first loan. This is done by refinancing the existing equity.
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Billy Chen 曾庆义
CEA Registration Number : R029372I
Tel: (+65) 88689999
Fax: (+65) 64021826
billy@billychen71.com ( email me )
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