Home loan refinancing has exploded in recent years due to the downturn in interest rates. People who were once paying 8%-10% in interest on home mortgages are now able to get financed at rates as low as 6%. This gives the homeowner a much lower house payment and more money in their pocket. Well, many others are also looking at second mortgage refinancing as well. Here are some tips to help you in this aspect of refinancing.
People get second mortgages on their homes for various reasons. Sometimes it is to get their hands on much needed cash to pay for expenses such as college or a new car, etc. Other times it is to used to purchase a second home. Second mortgages will generally always be much shorter in length than a first. In most cases they run 5-10 years.
Why refinance a second? Just for the same reason you would refinance your original mortgage you want to get a lower interest rate and save money on your loan. It's a sound financial decision in most cases.
When you make the decision to refinance a second home mortgage, there are some things you should look for before signing any new contract.
- Look at several different lenders to find a good one
- Look online for more information and lending choices
- Always ask questions and if you feel you aren't getting the right answers...scratch that lender off your list
- Know what closing costs, points and fees will apply to your second mortgage
These are only some of the major points to be aware of when looking to refinance.
You should be able to easily find a good lender if you just ask for referrals and look around. Most people you work with are happy to recommend a lender that they have had a good experience with. Just be careful, check them out, and ask questions. This will assure you that your second mortgage refinancing will go smoothly and quickly.
Written by: Terry Edwards
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