banner

Blog


Real Estate Financing -Refinancing

banner

One of the most common types of real estate financing is refinancing your home.

When to Refinance
Effective refinancing usually means lowering your current mortgage loan rate by at least one percent. You might also want to consider changing the length of your loan or receiving cash from the equity in your home.

Benefits of Refinancing
If you want to increase your monthly cash flow, refinancing to lower your monthly payment could help. Refinancing could also let you to shorten your loan term if you can qualify.

Using Home Equity
Many people borrow against the equity in their homes and use the newly acquired cash to make home improvements. Up to ninety percent of the appraised value of your home can be used to borrow against to make home improvements. The equity you can use is based on the value of the home and what you currently owe, subject to the applicable state laws. You can still refinance if you don’t have much equity; up to ninety percent loan-to-value (LTV) if you want to refinance your house for a new rate and term. A reappraisal of your property will probably be required.

Refinancing Costs
You ‘ll have closing costs associated with refinancing your loan, including points and processing fees. You may have the option of rolling these costs into the loan amount to reduce your cash out of pocket. Check with your loan officer or mortgage specialist.

Refinancing real estate may be the way to go. Make sure you understand fully what you’re getting into. Read the fine print and have every paragraph explained before you sign any contract. Get help also from a trusted family member; especially someone who is knowledgeable about real estate, refinancing or real estate loans or contracts. If you have any real estate professionals or real estate appraisers or real estate attorneys in your family or close circle of friends, ask them for advice and have them go over your contract before signing. Real estate financing is not hard to understand once you learn a few basics.