A home loan refinance can be
structured in multiple ways. A few of the basic loan types
are:
1. Cash Out. Cash out home loan refinancing is a type
of home loan where the homeowner is given proceeds for items
other than simply re-writing their existing mortgage and the
costs associated with the refinance. Some examples are cash
out for debt consolidation and home improvements.
2. Rate and Term Refinance. This is the refinance of
an existing mortgage loan only. The fees associated with
refinancing a mortgage are often included in this loan type
and are not considered to be cash out, because they are
given to third parties, not to the borrower.
As with any
home mortgage loan, DO NOT make any assumptions.
If you are unsure about anything,
ASK YOUR MORTGAGE LENDER QUESTIONS.
TIPS:
A) If you do not get the answers you require explained to
your satisfaction, remember that your company probably has
plenty of competitors that would be willing to assist you.
For most consumers, their house is their most valuable
asset.
B) Do not make the assumption that the interest costs of
this mortgage will be deductible come tax time. Consult a
CPA, accountant or tax advisor for tax benefits that you may
or may not qualify for.
C) Inquire about all fees and costs associated with this
loan, including the mortgage loan interest rate and APR.
Also, be sure to confirm whether the loan is an adjustable
or fixed rate mortgage, balloon or some other financing
variation. Regardless, you should receive initial
disclosures in writing from your lender, that discuss the
loan structure, soon after applying.
D) Will a pre-payment penalty (not allowed by law in some
states) be charged for paying off the loan too early, or if
you make large payments against the principal balance? |
