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MORTGAGE REFINANCE POINTS TO REMEMBER

• Lower the monthly payment and refinance rates – Mortgage refinance is a significant way to reduce the cost of mortgage. It helps to reduce the interest amount along with the monthly payment for the mortgage payment. If a person took any mortgage long before with a high rate of interest then with a refinance he or she can easily get a refinance with a much lower interest rate. This can save a lot of dollar on monthly payment. But to be eligible for a refinance a person must have a proper credit score. If the credit score of a person is not good then there is a possibility of rejection.

• Flexibility to change from adjustable rate to fixed rate mortgage – If any home is currently under Adjustable interest rate (ARM) and is on “locking term” and time is running out then it is high time to choose refinance as refinancing at that time will change the Adjustable rate mortgage to fixed rate mortgage and it will again be locked in. As in adjustable rate mortgage the rate of interest rate varies time to time and there is high chance that it can increase to a huge extent making the financial life of a person in huge trouble. So changing the adjustable rate mortgage to fixed rate mortgage can bring financial stability back into a person’s life.

• Flexibility to change from fixed rate mortgage to adjustable rate mortgage – A person also has the option to change from fixed rate mortgage to adjustable rate mortgage according to the situation.

• Consolidation of Mortgage – If there is a second mortgage on a home having a high interest rate then refinance is a god choice as this will act like a second mortgage and will help the borrower to pay off the lender in full.
  
  

But before going for refinance it is always better to judge the financial condition and then to take steps.