Article by Richard A. Manfredi
With all of the talk surrounding mortgage loans, which is the right next step for you and your family? Both a 2nd mortgage and mortgage refinancing offer some great benefits; the key is finding a solution that boosts your budget.Mortgage loans can sound awfully intimidating. After all, your home is the biggest investment you will ever make, and the thought of making payments for the next 15 or 30 years can seem overwhelming. However, with options like a 2nd mortgage or mortgage refinancing, you can ease the stress on yourself.When you prequalify for a home loan, the bank comes up with terms that meet the current financial situation. Your income at the time, current interest rates, and the current state of the housing market all play a role in mortgage loans. Mortgage loans fall into two categories - fixed interest rate and adjustable interest rate. Under fixed interest rate mortgage loans, you make all of your monthly mortgage payments with an interest rate that never changes. Whatever the interest rate was when you signed your home mortgage will be your interest rate for the entire duration of the mortgage.With an adjustable interest rate plan, the interest you pay as part of your monthly mortgage payments changes all the time, because it depends on the current interest rate. If the interest rate goes down in a month, so will your mortgage payment. However, if the interest rate goes up in a certain month, so will your mortgage payment.However, as time goes on, your financial situation - along with the financial health of the housing market - can change. That's when a 2nd mortgage and mortgage refinancing come into play.Mortgage refinancing can help homeowners who have any type of mortgage loans - fixed or adjustable. Let's say that you signed a fixed mortgage a few years ago, but the interest rate has gone down since then. Mortgage refinancing allows you to adjust your plan to the current interest rate. There may be some fees associated with mortgage refinancing, but it may save you a lot more m! oney in the long run. Or, if you signed an adjustable mortgage, and you're sick of your payments going up and down, you can use mortgage refinancing to switch to a fixed interest rate plan. Again, there may be some fees, but you will also have a steady payment every month.Applying for a 2nd mortgage can be even easier that mortgage refinancing. If you need money right now - like to pay for the kids' college tuition - you can apply for a 2nd mortgage. Unlike mortgage refinancing, your new loan does not replace the old one. Instead, you will have two mortgage loans with your bank.With a 2nd mortgage, the longer you have owned your home, the more money you can borrow. A 2nd mortgage is based on equity - which builds up over time.
About the AuthorRichard A. Manfredi has written about http://www.homemortgage-hq.com"> www.homemortgage-hq.com . At Home Mortgage HQ you can find mortgage information about home mortgage options, home mortgage refinancing, mortgage loans, mortgage rates, and more.
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