There are different situations in our life, which may cause the borrowers’ wish to refinance their mortgage sooner or later. Though everybody is unique in his reasoning, there are often common situations, which may influence the decision.
Main Types of Home Loan Refinancing
Refinancing a mortgage is to pay the loan, which you’ve got when buying a home for the first time and to borrow another one. There are several main options for mortgage loans.
The most common is rate-and-term refinancing, the borrower refinances the remaining balance for a lower rate and shorter repayment period.
The second most popular type is cash-out refinancing – a new, the so called, second mortgage is obtained. It is always greater in amount than the existing one and the borrower’s aim is to get cash for paying the existing debt or covering some other needs.