SAVING money is never a bad idea. So, if have taken a mortgage loan for your house in the state of Illinois and are paying it back in monthly installments, why not consider reducing your monthly payments or getting the burden off your shoulders quicker than you originally planned? Your existing mortgage might also be able to get you a cash amount in your pocket. Or if you are finding it hard to make your monthly payments, why not see if you can reduce your payments even if that means increasing the duration of your loan? These are just a few of the benefits you might be entitled to if you opt for refinancing your existing mortgage. Let’s first understand what mortgage refinancing – or ‘mortgage refinance’ as it is usually known – is all about.
ynopsis of mortgage refinance
Actually, the concept and broad features of mortgage refinance in Illinois are the same as in the other states. Some minor differences apply to the states of Alaska and Hawaii, but that’s not relevant to the topic of this article. Mortgage refinance in Illinois means the taking of new loan to pay back your existing mortgage loan in its entirety, and then servicing the new loan by way of monthly payments. A mortgage refinance loan is also a mortgage loan. But since it is taken to finance the same house that is being financed by your original loan, it is considered ‘refinance’.
Taking a decision
There is no straightforward rule for deciding whether mortgage refinance makes sense to you. However, if you have read in the newspapers or heard on TV that interest rates have been cut, it is possible that you have a case to opt for mortgage refinance. However, availing of a lower interest rate is not necessarily a green signal – there are other factors to consider. To illustrate, the advantage of a lower rate may be neutralized by the upfront fee you may have to pay for the refinance loan. Therefore, you should first decide for yourself the kind of benefit you want to derive from mortgage refinance.
To help you decide, most mortgage lenders and brokers in Illinois have provided online calculators on their website. Three such websites are: www.erate.com, www.mortgage-calc.com, www.mortgageloan.com. Use these calculators by typing-in the data asked for, and see the results they come up with. These results are in the form of different refinance options you have for your specific situation. You choose the one that is most suitable to your needs, and the only way to judge suitability is to see what difference it makes to you and whether this is the difference you want.
Enter the lender / broker
If the online calculator results suggest that mortgage refinance makes sense for you, you should contact two or three lenders or brokers in your specific city. It is always advisable to deal with lenders or brokers that are local to you. Due to constraints of space, it is not feasible to reproduce the entire city-by-city directory of lenders/brokers in Illinois. You can however get their contact details from the same mortgage loan websites. On some websites, there is provision for you to request a lender/broker to contact you, and they will contact you without any obligation. Make sure you contact two or three companies so that you can compare their offers. There should not be wide variations in offers from different lenders/brokers for the same type and terms of refinance loans.
Mortgage refinance is a great concept to help people manage their mortgage payments. However, it requires deep knowledge of the financial markets. This would have been a daunting task for most people, but the Internet has made it all so simple. As a word of caution however, do not sign the dotted line until you have asked and received answers to all your questions, even if some of them betrayed ignorance of market realities. The most important question you must ask is: what upfront costs you have to pay. This is very important because there have been cases where mortgage refinance seemed to make perfect sense only to be scuttled by the revelation of upfront costs.