Refinanced Mortgage

Refinanced Mortgage

A mortgage one repays by taking out another mortgage. Refinancing a mortgage can allow one to secure a lower interest rate; for example, one can replace a mortgage at an 8.5% rate with one at 5.5%. In the case of a balloon loan, refinancing can repay the principal if one does not have sufficient funds to do so; that is, if one has made only interest payments over the life of the loan and has not saved the principal amount when the loan comes due, refinancing can prevent bankruptcy. There are two main drawbacks to refinancing. First, there is no certainty that one will be approved for it. One thus takes a risk every time one decides to make only interest payments on a mortgage. Secondly, refinancing generally resets the repayment period; that is, if one refinances six years into a 10 year mortgage, then one generally repays the new mortgage over 10 years instead of the remaining four.
References in periodicals archive ?
For the first time in 18 months, slightly more than half of mortgage lenders' volume in January went to refinanced mortgage loans versus purchase money loans, according to mortgage software firm Ellie Mae.
The average refinanced mortgage is cutting mortgage payments by 20 percent.
The bill would also create a plan for the Federal Housing Administration (FHA) to begin insuring up to $300 billion in refinanced mortgage loans for families struggling to avoid foreclosure.
Borrowers must also agree to participate in early delinquency intervention counseling should they become delinquent for 30 days or more on their refinanced mortgage.
She said the refinanced mortgage will mean lower, more stable monthly payments.
We at BE suggest you save 10% to 15% of your income, but you must balance your living expenses and the cost of your newly refinanced mortgage against the amount you save each pay period.
If the maturity and outstanding balance of the average refinanced mortgage had not changed, the decline in the interest rate would have lowered the monthly mortgage payment for the average refinancing homeowner by $98, for an annual savings of $1,179.
For points paid on a refinanced mortgage, remaining points paid that have not yet been deducted may be deducted when the refinancing is completed and the old loan paid off.
Those loss mitigation options may include a reduced mortgage, or a refinanced mortgage with lower interest rates.
For example, he noted that the CU uses an automated appraisal system backed up with tax records to help underwrite the home equity loan whereas refinanced mortgage loans have to conform to the more stringent standards.
refinanced mortgage loans for borrowers with serious credit delinquencies without properly analyzing the household's ability to manage credit.
If the interest isn't deductible, you may be better off replacing student loans and installment loans with deductible home equity debt, either by tapping a credit line or using cash from a refinanced mortgage.