By Sean A. Kelly
The home refinance option is quickly becoming an effective solution for struggling homeowners that are not able to afford their monthly mortgage loan repayment amounts any more. With effective home refinancing, you could successfully lower your monthly repayment amount, and end up paying less to your lenders in terms of interest as well as total loan payment over the tenure of the home loan. More and more financial institutions are offering home refinance loans today as the demand for these loans have skyrocketed ever since we experienced the economic slump a couple of years ago. The economic slump left unemployment levels at all-time highs, and many people were left jobless as companies exercised retrenchment and voluntary retirement activities to help cope with the difficult economic situation. And when you lose your main source of income, you would most definitely struggle with your monthly commitments, and more often than ever your biggest loan repayment amount would be your mortgage payment. Your failure to service your mortgage loan could result in you losing your home through foreclosure proceedings, a scenario that you would want to avoid as your family would be left homeless unless you can figure out a way to manage your mortgage loan.
And a solution that you should definitely consider is the home refinancing option. Take advantage of effective home refinance packages that are being offered today by opting for a low-interest, fixed rate home mortgage loan to help you cope better with your mortgage loan. You could also choose to extend the duration of your loan, something that would further reduce the amount that you would need to pay your lender at the end of every month. For instance, if you have ten years left on your current home mortgage loan, proceed to refinance your home and double your loan duration to twenty years. Although this might extend the length of your loan duration, you would end up paying only half the amount that you used to pay prior to your refinancing exercise (or even less if you could obtain an attractive interest rate with your refinance package).
Home refinancing is an excellent way to salvage your home from being seized by your creditors, especially if finances are extremely tight for you due to a pay cut or retrenchment exercise. Generally if your loan-to-value (LTV) is 80% or less, you should have little difficulty in obtaining home refinancing. And with President Obama’s Making Home Affordable (MHA) programs such as the Home Affordable Refinance Program (HARP) in place, refinancing your home has never been easier! The HARP is an excellent refinance program for home owners that find that the values of their homes are dwindling, as it allows these homeowners to still refinance their homes regardless of the fact that the home’s value has not increased.
For those that own equity within their homes, the option of a home equity loan could prove to be extremely attractive. With the equity serving as the collateral for your loan, you could obtain cash through this type of home refi solution for purposes such as renovating your home or paying off your other debts such as credit card debts. If you want to renovate and build a new kitchen, or simply pay off your outstanding credit card balances, take advantage of the equity that you own within your home, and obtain a home equity loan at a low interest rate from your own lender or a different lender. But remember that if you fail to repay your home equity loan, you could risk losing your collateral, which is your home. Thus make sure that you service this loan as diligently as you usually service your mortgage loan, as your home is at stake for both loans.
Mortgage refinancing is very much a reality today, especially with the existence of several attractive packages for home refinancing purposes for interested homeowners. And with interest rates at an all-time low, now is definitely a time to refinance your home!
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