DO you have a mortgaged house anywhere in the state of Minnesota ? If yes, you have an option to have your mortgage refinance through various companies. By this, it means that you can possibly derive financial advantage by taking a mortgage refinance loan to pay back in full your existing mortgage loan, and then pay back the refinance loan on easier terms than were applicable to the original, paid-back loan. Complicated? Well, it is, but mortgage refinance is not rocket science either. This article will demystify mortgage refinance to enable you to take the right decision about refinancing your mortgage in Minnesota.
Mortgage refinance is a financial tool that brings you certain financial benefits from your mortgaged property. The fundamental benefit is that you save money. You save money either by paying lower monthly installments, or paying the same installments but getting a lump sum of cash in your bank account, or even by paying slightly higher installments only to reduce the duration of your mortgage liability. Different people have different needs, and it is for you to know what kind of benefit you want from mortgage refinance.
Decision-making is easy if you have an explicit need. You may want to pay less money every month. So, you opt for a refinance loan at a lower interest rate or/and extending the duration of your mortgage. You may need cash, so you go in for a cash-out refinance deal (which is possible only if the market price of your property has risen since you purchased it). Your financial position might have improved tremendously, so you don't want to carry the mortgage burden for long; so you refinance your mortgage on appropriate terms. You may just want to pay interest every month and authorize the lender to recover the principal by liquidating your financial assets (e.g., securities, insurance, pension, etc) at the end of the loan term. Or you may just want to consolidate your higher-cost debts into a single lower-cost debt. Reasons for mortgage refinance can be many, and it helps arrive at a decision if you know what you want.
But what if you are not in any pressing reason for refinance, yet want to examine if there's something in it for you? Of course, regardless of whether you know or don't know the benefit you want, you have to take professional advice from lenders or brokers in your area of Minnesota. But there are so many such professionals in your state, each competing with the other for your business, that you cannot be sure the professional you select is doing you justice. It is therefore necessary to do some research on your own to get an approximate idea of what the refinance market can offer you, before you get down to talking to the professionals face-to-face.
Your own preliminary research
Even though mortgage refinance is a complex territory, you need not be fazed. Help is at hand -- and free and quick at that. All you have to do is to log on to the Internet, and visit some mortgage websites -- such as www.mortgageloan.com, www.bankrate.com, www.erate.com, www.interest.com and others. You will find an online mortgage or mortgage refinance calculator on each of these sites. Use this calculators to get an approximate idea about what you can expect from the market, under different loan types. Also check on total interest costs, tax benefits, and any other expense you might have to incur. Remember that you have to provide the calculator with accurate details about yourself (especially your credit profile and the number of years you want to remain in ownership of the property), the type and location of your property, your existing mortgage loan, and the amount of refinance loan you need.
Negotiating with lenders / brokers
Once you have done your own preliminary research through online calculators, note the results and select one or two options that are suitable for your loan type. You should next get in touch with mortgage refinance lenders / brokers in your area in Minnesota. . Note that almost all mortgage lenders and brokers are also engaged in the mortgage refinance business. You can get their contact details from the same websites whose online calculators you used. Some websites arrange for a professional to contact you directly. In your meetings with them, use your online calculator findings as your base reference.
There should not be a wide gap between the online calculator results and the advice given by professionals in the field. If there is a big gap, it would mean that you provided inaccurate information to the calculators, or simply that the program logic behind calculators has not been updated. And remember that all advice provided by lenders and brokers are without any obligation on either party, so you don't have to pay anyone anything just for consultation (unless you have agreed to make a payment).
Mortgage refinance can be obtained without much difficulty in the state of Minnesota, provided your credit score is not too poor. In fact, even if your credit score is poor, you still have a chance to get your mortgage refinance but it will be at a higher interest rate than the advertised rates.
You will also have to pay a higher broker commission if your credit score is low. Whatever be your personal financial position and needs, mortgage refinance is a helpful option in most cases provided you are careful. And the care to take is to arm yourself with basic knowledge about your eligibilities -- which you can obtain through online calculators. Finally, remember that interest rate alone is not sufficient indication of the viability of a mortgage refinance loan: you also have to take into account other upfront payments you have to make. The total cost of a refinance loan is denoted as annual percentage rate (APR) -- and this is what you must keep asking the professionals every time they talk about interest rates.