Are you a homeowner and wondering how to improve your current financial circumstances? Taking out a home loan to help finance a property is a major economic commitment, luckily the terms of your loan do not have to be permanent if you refinance a mortgage. When you refinance your home loan with either a cash-out or a rate and term refinance, it can help you reach your financial goals by allowing you to replace your existing mortgage with a new one that has more favorable conditions. If you are located in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and are interested in learning about ways to save money on your home loan, Foundation Mortgage can help.
In a cash-out refinance, a borrower can replace their current home loan with a new loan for an amount that is larger than the amount that they currently owe. The borrower can then keep the loan difference as a cash payout and use these additional funds for many things, such as paying off other debt, home repairs and renovations, or for any other financial reason. It is important to remember that with a cash-out refinance, a borrower will be required to pay private mortgage insurance and closing costs, although sometimes these costs can be incorporated into the refinanced loan. There are several benefits associated with a cash-out refinance, including the opportunity for tax deductions, lower interest rates, and a chance to increase the value of the home if renovations are made.
Rate And Term Refinance
A rate and term refinance involves replacing your existing mortgage with a new one that has a lower interest rate and updated terms, and the purpose is to help a borrower save more money over time. Many borrowers opt for a rate and term refinance in order to lower their monthly mortgage payment, to eliminate private mortgage insurance costs, (PMI), to change their type of loan, or to switch to a shorter term length. A borrower may be eligible for a rate and term refinance loan as soon as six months after their original loan begins. It is important to note that a rate and term refinance is different from a cash-out refinance in that the principal balance of the loan will stay the same and there is not a cash payout involved.
Get Help With Refinancing Your Mortgage
Under the right circumstances, a loan refinance can help you greatly improve your financial situation. If you are interested in knowing more about a mortgage refinance in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today for a consultation today.