Refinancing a mortgage can be a useful option for a variety of reasons, including lowering monthly payments, locking in a stable interest rate and repayment schedule, or accessing money for a major purchase. Below are a couple of methods to ensure you make the most of the opportunity. Recommended site for more info.
If you are refinancing a 30 year mortgage 10 years in with a new 30 year mortgage, you should understand that you will end up paying more total money than if you had stuck with the original loan. This is how interest works. However, while the number of dollars paid will be higher, purchasing power used may not be. This is due to inflation, as a dollar today is worth more than a dollar 20 years from now. While the exact inflation rate may not be knowable, a little discount may be enjoyed by paying the loan back with less valuable currency down the line. Accrued interest may cancel this out, so it is best if you refinance for some other advantage, like a lump sum or stable interest rate, and treat any inflationary advantage as a bonus.
When shopping around for mortgage refinancing, you may be surprised to discover that your original lender offers the best rate. This is because financial institutions must spend time and money researching both the property and applicant before reaching a lending decision. The original lender already did their homework on you when they gave you the first loan, so they do not need to do it again. The savings are passed on to you!
While it is important to carefully consider every available data point before refinancing, inflation and taking advantage of your original lender's prior research can help you secure the best possible deal.
When shopping around for mortgage refinancing, you may be surprised to discover that your original lender offers the best rate. This is because financial institutions must spend time and money researching both the property and applicant before reaching a lending decision. The original lender already did their homework on you when they gave you the first loan, so they do not need to do it again. The savings are passed on to you!
While it is important to carefully consider every available data point before refinancing, inflation and taking advantage of your original lender's prior research can help you secure the best possible deal.
