What is a Mortgage Refinance?

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A mortgage refinance refers to the process of getting a new or replacement loan for your existing home. Mortgage refinancing replaces your current mortgage with a new loan ideally at a lower interest rate. You can also change terms and conditions to suit your current circumstances, needs or desires. You can also request a cash-out refinance that would provide cash for projects related to your home or other uses.

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A loan refinance switches an existing mortgage with a new one, allowing you to modify the loan’s interest rate, adjust the term length, or simply cash out. Consulting with a loan officer will help you set clear financial pathways in order to choose the most suitable package to refinance your home mortgage.

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The Mortgage Refinancing Process

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First, take care of any issues with your credit so that your credit score is as high as possible and you qualify for the lowest interest rates. Have a rough idea of the rates and other terms you desire in your new loan. Remember: These terms should represent an improvement on the terms of your existing loan.

Next, shop around to find a qualified Phoenix lender with the best terms. Don’t just choose your current lender; get at least three or four quotes from competitors before inquiring with your current lender about what it is willing to offer.

Don’t open any new credit during the refinancing process; it could hinder the deal. Before signing the deal, carefully review the new loan terms and all associated fees so that you know what to expect financially when it’s time to make payments.

As you go through this process, keep an eye on the closing costs. Also, watch out for things like prepayment penalties, which can cause problems down the road if you pay off the mortgage early or refinance again.

 

 

The Benefits of a Mortgage Refinance​

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• Lower interest payment

• Lower monthly payment

• Shorter or longer repayment period

• Withdrawal of some equity

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