Mortgage Refinancing                          

Many people are taking advantage of low interest rates to refinance their homes. Mortgage refinancing is replacing a current mortgage with one that has more favorable rates and terms. Refinancing also is a way of taking out additional equity in the house.

mortgage refinancing

When a mortgage is refinanced, the original mortgage is paid off using the funds from the second mortgage. If more money is borrowed than needed to pay off the first loan, it is called a cash-out mortgage and the remaining funds go to the homeowner.

Mortgage refinance is popular right now because interest rates are very low. Some mortgage holders are taking advantage of low interest rates to switch from an adjustable-rate mortgage to a fixed-rate mortgage. The payments on an adjustable-rate mortgage change, usually annually, after an initial fixed period of one to five years. The initial rate is usually very low, so most mortgage holders see their payments increase drastically after the initial fixed period ends. Switching from an adjustable-rate mortgage to a fixed-rate mortgage will lock in a low rate and guarantee the same monthly payment for the life of the loan.

Some mortgage holders are looking to mortgage refinance to lower their payments. Interest rates have been low for the last few years but have dropped even lower in the last year, so refinancing allows homeowners to lock in a lower rate.

Another reason to refinance is to access the equity in the house. If the house has appreciated substantially, for instance, increased in value from $200,000 to $250,000, the homeowner may be able to refinance for a higher amount and gain use of the extra value in the home.


Mortgage Refinance References & Resources

A Consumer's Guide to Mortgage Refinancing

Smart Money: Should You Refinance?

Home-Equity Loans: What You Need To Know

Refinancing Calculator

Mortgage Refinance Tips & Guides

Mortgage Secrets Exposed

Learn How To Smash Your Mortgage

Do It Yourself Mortgage Modification

Pre-Foreclosure Acquisition Services

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