Mortgages Loans Home Equity Loans And Refinacing

Mortgages Loans Home Equity Loans And Refinacing



Mortgages Loans,​ Home Equity Loans,​ And Refinacing
There are two types of​ mortgages,​ fixed rate mortgages and floating rate mortgages .​
As is​ obvious from their names,​ the​ fixed rate mortgages are ones where the​ monthly mortgage payment amount remains the​ same for the​ entire life of​ the​ mortgage i.e .​
till the​ end of​ mortgage term; whereas floating rate mortgages float/ change throughout the​ life of​ the​ home mortgage loan .​
The mortgage interest rate on​ the​ fixed rate mortgage loan is​ fixed at​ the​ start of​ Connecticut home mortgage loan term .​
Whereas,​ the​ mortgage rate on​ a​ floating rate mortgage is​ dependent on​ a​ pre-decided financial index .​
This predecided financial index factor is​ on​ economic,​ financial,​ political and many other factors) .​
So,​ which type of​ mortgage is​ better?
Well,​ the​ opinion seems divided and is​ mainly based on​ the​ preferences of​ the​ individual who is​ getting the​ home mortgage loan .​
However,​ the​ general recommendation is​ that you​ should go for a​ floating rate mortgage loan if​ you​ plan to​ live in​ the​ home for a​ shorter duration .​
For long durations,​ you​ will need to​ make a​ decision on​ how low the​ current fixed mortgage rate is​ and whether it’s low enough to​ be beneficial for locking-in for a​ long period.
Owning a​ home is​ a​ matter of​ great pride; and in​ today’s world,​ owning a​ home has been made really easy through mortgages .​
However,​ when you​ buy an​ home through the​ home mortgage route,​ you​ don’t actually get the​ total (100%) ownership of​ the​ home till you​ have paid your mortgage completely .​
As you​ make your monthly mortgage payments,​ your ownership level increases and when you​ pay back your entire mortgage loan (which might happen 20-30 years after you​ start your mortgage),​ you​ then become 100% the​ owner .​
So,​ mortgages are long term investments where the​ home is​ the​ asset that you​ create over a​ long period of​ time .​
But that does not mean that you​ are blocking all your money in​ the​ making of​ an​ asset that matures over very long term .​
If you​ need money during the​ tenure of​ your mortgage loan e.g .​
for home improvements,​ you​ can actually make use of​ your investment (your ownership in​ the​ house) in​ order to​ get the​ cash you​ need .​
This happens in​ the​ form of​ an​ home equity loan.
Getting a​ good mortgage deal is​ one thing and bettering that mortgage deal is​ another thing .​
In simple words,​ ‘Mortgage refinancing’ means ending your current mortgage to​ get into another mortgage for the​ same property .​
Of course,​ you​ would go for mortgage refinancing only if​ the​ current mortgage interest rates are lower than the​ mortgage interest rates that you​ are paying on​ your mortgage which you​ took a​ few years back .​
However,​ that doesn’t mean that you​ go for mortgage refinancing every time you​ find that the​ mortgage interest rates have gone down a​ bit .​
There are costs involved with mortgage refinancing and these costs make mortgage refinancing unfeasible unless the​ mortgage rates have gone down significantly .​
Various mortgage industry analysts suggest different figures for the​ gap (between current mortgage rates and the​ rates on​ your existing mortgage) that would make mortgage refinancing a​ practical option.




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