Honolulu Mortgage Stars

There are a lot of reasons why people resort to refinancing, and they are as follows:

1. Refinancing allows you to have a fixed rate mortgage (FRM)
These days, an adjustable rate mortgage or ARM is not very much recommended because of the present economic situation.  If you want to shift from ARM to FRM, you can easily do so by obtaining a refinance mortgage loan.  Instead of paying different amounts monthly, you will now be paying fixed amounts and it doesn’t matter what the economic condition is.

However, refinancing is not advisable if you plan to live in your home just for a couple of years since it can be assumed that interest rates will not fluctuate that much within that short period of time.  This option is perfect if you’re planning to live in your home for a long span of time or even for the rest of your life.     

2. Refinancing can reduce monthly payments
Many people have already tried availing of refinancing mortgage loan and this has saved their home from foreclosure.  This loan program has reduced the interest rates of their mortgage loan, thus, also reducing their monthly payments.  If you also want to keep your home for as long as you and your family live, you can take the refinancing option.  This will not only reduce your monthly payments, but it will also give you more savings.   

3. Refinancing allows you cash out on the equity of your home
A home can definitely be considered as wealth for you can get some cash out of its equity.  As time passes, the value of your home appreciates and if you have refinanced your home, you are allowed to bring out an amount if you have needs that you need to sustain, such as credit card bills, repairs and maintenance of your home, payment for your kid’s tuition fee, and many others.      

4. Refinancing can put a stop to your ballooning debt
Loans grow bigger because of their interest.  In order for you to put an end to your ballooning debt, you can apply for a refinance mortgage loan.  Not only will the interest stop, but you will also be paying a fixed and lower amount monthly.

5. Refinancing is one way to eliminate PMI or Private Mortgage Refinance Insurance on your mortgage loan
Refinance mortgage is popular because borrowers are only required to pay a down payment of less than 10%.  But when applying for refinance mortgage loans, most companies include the Private Mortgage Refinance Insurance.  PMI is some sort of a security for loan mortgage companies.  However, this is not considered a disadvantage on refinancing.  Refinance mortgage loans can actually eliminate the PMI all by itself since your balance on your mortgage loan decreases as the value of your property increases.

Before you apply for a refinance mortgage loan, make sure that you have fully understood its terms.  See to it that you have carefully weighed the advantages as well as the disadvantages of the program.