Mortgage Refinance Look For Better Terms

Mortgage Refinance – Look for Better Terms
Many people look at​ nothing but interest rates when they’re considering whether the​ time is​ right for a​ mortgage refinance .​
But remember that there’s more to​ the​ mortgage than the​ interest rates .​
In many cases,​ the​ terms of​ the​ mortgage may be sufficient reason for mortgage refinance.
One of​ the​ most common term issues that prompt a​ mortgage refinance is​ the​ difference between a​ variable rate and fixed rate loan .​
There is​ only one very basic difference between the​ two .​
a​ variable rate loan is​ exactly what it​ sounds like .​
The loan payments vary from month to​ month and the​ borrower pays whatever amount is​ designated by the​ current prime interest rate (a consensus among certain lenders of​ what interest rates should be) .​
There are several negative points associated with a​ variable rate mortgage.
The first and most inconvenient is​ that you​ never know exactly how much your mortgage payment will be this month .​
Payments may remain fairly steady,​ but there will always be some variation .​
Depending on​ the​ terms of​ your loan,​ you​ may find yourself paying late fees or​ incredibly high interest on​ any portion of​ the​ payment you​ fail to​ make – even if​ it’s an​ oversight because you​ didn’t know how much the​ payment should have been .​
Some people want the​ stability of​ fixed rates,​ and that’s one reason to​ seek a​ mortgage refinance with a​ fixed rate .​
One reason variable rate mortgages were so popular a​ few years ago is​ that interest rates were fluctuating wildly .​
While rates remain fairly steady today,​ there’s always the​ possibility that interest rates as​ a​ whole could skyrocket .​
That’s another reason to​ seek out a​ mortgage refinance .​
If interest rates were to​ become unstable,​ you’d know that your loan was locked in​ to​ a​ specific rate .​
Of course,​ locking yourself into a​ particular rate also means that you​ don’t get to​ take advantage of​ the​ situation when interest rates overall dive .​
It’s up to​ you​ to​ decide whether it’s worth the​ risk .​
Sometimes,​ a​ borrower found themselves locked in​ to​ a​ variable rate mortgage because they didn’t qualify for the​ better loan terms .​
If that’s your case,​ you​ may find that you​ qualify for better terms after paying regularly on​ the​ existing loan for a​ period of​ time .​
If you’ve made payments on​ time every time and have demonstrated your ability and willingness to​ meet the​ terms of​ your loan,​ your lender may be ready to​ offer you​ better terms .​
In that case,​ you​ may be able to​ trade in​ your variable rate mortgage for a​ fixed rate mortgage,​ and a​ mortgage refinance may be a​ very good option.

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