Pennsylvania Mortgage Refinance Guide
Refinancing means paying off your current mortgage with a new mortgage loan secured by the same property. A refinance can also be done if the property does not currently have a mortgage, but you wish to place a mortgage on the property to pull out cash.
Main types of Pennsylvania Refinance mortgages:
Rate Reduction Refinance: This is done for the purpose of reducing the interest rate of your current mortgage loan.
Cash Out Refinance: This is done to obtain cash. The new mortgage covers your current mortgage and any amount that you wish to receive in cash. This cash amount is bases on the amount of equity that you have acquired in your home.
Why should I refinance?
There are many reasons to Refinance your Pennsylvania Mortgage:
- To reduce your mortgage payment.
- To change your loan type. (Ex: Switch from an ARM to a Fixed-Rate loan)
- To receive cash for any reason.
PA Mortgage Rate Reduction:
The most obvious reason for refinancing in Pennsylvania is to reduce your mortgage interest rate. This has been the main reason why borrowers have been refinancing for the past five years, when mortgage rates have been at historical lows.
PA Mortgage Term Reduction:
Why not consider a reduction in the mortgage term to add to the savings of a mortgage refinance? Who usually benefits from a mortgage term reduction?
- Borrowers who would like to accumulate equity faster.
- Borrowers who would like to save on interest and don?t mind the larger payments.
- Borrowers with a lot of cash flow.
Changing Mortgage Loan Type
The most common refinances involve changing from an ARM to a fixed-rate mortgage. This occurs when mortgage rates are relatively low.
Cash Out Refinance
When a borrower takes money from the equity in their home, this is known as a cash-out refinance. Refinancing your home is a great opportunity to borrow money for any reason. Since interest rates on mortgage loans are usually lower than any other ling of credit. For many homeowners it is the first source for borrowing cash.
Borrowers commonly take cash out on a refinance for the following reasons:
- To pay off high cost loans.
- To pay for education
- To make home improvements
- To invest their money
- To finance their retirement
The most common reason to cash out is to pay off debts, which lowers monthly payments and has several tax benefits.
Would you like more information on refinancing? Apply online and one of our mortgage loan consultants will be happy to answer all of your questions, and determine if refinancing is right for you!
By StateFlorida | Pennsylvania
