Refinancing Your Mortgage

What is Refinancing?

Refinancing is the process of paying off your existing mortgage with a new mortgage that has different terms and conditions than the original mortgage. This is common for home mortgages, car loans, student loans, or even credit card loans. Most people opt to refinance their loans in order to lower their inCore terest rate, reduce their monthly payment, or alter the length of their mortgage. Sometimes, homeowners opt to refinance to take cash out from their home's equity. Refinancing your home can be a difficult process, so let's dive into the details to help you understand every aspect so you can make the best decision for your home or property.

Reasons to Refinance

• Saving Money: If you took out your original mortgage during a period of high interest rates, you might want to consider refinancing if the interest rates have since decreased. One main reason homeowners might want to refinance is to secure a new loan with a lower interest rate.
• Lower Payment: If you are having trouble meeting your minimum payment each month on a loan, then refinancing could help you reduce the payment to a more affordable option. Beware with this option, your overall interest to be paid will likely increase if you choose a lower monthly payment.
• Need Money Immediately: When you have accumulated enough equity, you may cash out by refinancing to a higher balance. However, cash-out refinancing is typically pricey unless you pair it with a low interest rate.
• Consolidate Debts: If you currently are making multiple payments on a multitude of different loans, then choosing to refinance all loans to one payment can simplify your cash flow.

Types of Refinancing

• Cash-Out Refinance: This is when a new loan amount is taken out that is higher than the remaining owed amount on the existing mortgage. The difference in amount is cashed out and given to the homeowner. 
• FHA Refinance: The Federal Housing Administration often provides mortgages that don't require high down payments. If you opt out of your current mortgage for an FHA mortgage, you might be able to score a lower monthly payment.
• ARM Refinance: Adjustable rate mortgages can be refinanced when it is about to go through an adjustment. If you have an adjustable rate mortgage, you can switch to a conventional fixed rate mortgage and possibly score a lower interest rate, depending on the interest rate at the time of switching.
• Rate & Term Refinance: With this refinancing option, you could switch your mortgage to one with a lower interest rate and/or a more manageable loan term.

Refinance with Modern Loans

Do you need refinancing options on your home or other property? It can be difficult to choose the right refinancing option that matches your goals. With Modern Loans, we're here to make the home refinance process a whole lot easier. We bring tools and expertise that will help guide you along the way, starting with a free refinance analysis request. Upon completion of this, we can help you clearly see differences between your options. Visit our website for more information at https://modernloans.com/refinance.