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Resort to Refinancing

So you have a mortgage and you got your home. What is all this talk of refinancing? What does it mean, and why would I want to do it? You may ask.

There are several answers to this question but there are some common explanations for refinancing and what it can do, or not do, for you.

Typical reasons to refinance include trying to lower monthly payments, to get the security of a fixed rate loan that you have not had prior, to change to an ARM loan to save more short-term, to take cash out of your home equity for another pending fee or debt, and/or to get rid of mortgage insurance.

If everyone could save by refinancing, everyone probably would. The thing is, it’s not that easy. Not everyone saves and there is not one simple way to determine if you would save or not. Sitting down and talking with a Countrywide Home Loans professional is the best way to really get to the bottom of refinancing and determine whether or not you are a good candidate who could benefit from the financial support available.

The length of time you plan to stay in your house is a major factor in whether you should refinance or not, and what type of refinancing you should do. Remember, refinancing basically means you are taking out a second mortgage, or changing from one mortgage to another, so you will go through the same options and decision making process you went through for your first mortgage.

If you are only going to be in your home for a short time, you may want to refinance with the “no out-of-pocket” plan. This means that you have slightly higher interest rates from there on out, but you will not have to pay all of the third party fees at closing.

If you will be in your home for more than four years, you have different options. After performing a cost analysis, you will know more about how much you can save with different refinancing plans and whether or not you should refinance.

For people staying in their home a very long period of time, a fixed period ARM may be a good option because you know you will be there to continue paying the loan and you will have the flexibility to change your payments as you wish.

If you would like to get out of the unpredictable and risky ARM’s, fixed rate mortgages are a good way to go if you are going to be in your home for a while. Depending on how long you foresee yourself living there, you can choose between a 15, 20, 25 or 30 year fixed rate loan. The longer the duration of the loan, the less the payments will be over the duration period.

Contact a Countrywide Home Loans associate to find out more about refinancing and get that home loan paid off with minimal hassle.

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