Loan Refinance
3:32 AM
Refinancing of interest only loans simply means exchanging one loan for anew one. It is an effective way to lower the debt on current loans. This is particularly advantageous if the present interest percentage are lower than the interest percentage you are currently paying on the loan. Refinancing would enable you to change your high interest debt into a low interest debt, as the total monthly payment would decrease.
The additional money saved can be spent in something more lucrative such as real estate or stocks, or to settle high-interest debts like credit cards. Refinancing is also done for switching an adjustable rate credit into a fixed rate credit.
Refinancing has turned out to be very ordinary in the past years that almost three quarters of new mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very appealing, especially when the period comes for the loan to get amortized. That signifies the loan will need to be repaid at the existing interest rate, together with the principle. A lot of individuals seek to refinance their interest only loan for them to buy more time, i.e. to delay the settlement of the principle further.
But, this may additionally raise the risk on the loan, because the interest rates may go up further, the price of the house may come down or the economy may go down soon.
Refinancing of interest only loans is ideal for people who are anticipating big capital earnings in the next coming years or are intending to market their house by the time the interest-only period is over. This is a good alternative given that the financial situation is good, the interest rates are balanced and the costs of houses are rising. Interest only refinancing is recommended for individuals who have irregular incomes such as commissions or bonuses or people who are expecting an increase in their income in the future. The savings accrued from refinancing may also be spent for home improvement, which will increase the price of the house in the future.
The additional money saved can be spent in something more lucrative such as real estate or stocks, or to settle high-interest debts like credit cards. Refinancing is also done for switching an adjustable rate credit into a fixed rate credit.
Refinancing has turned out to be very ordinary in the past years that almost three quarters of new mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very appealing, especially when the period comes for the loan to get amortized. That signifies the loan will need to be repaid at the existing interest rate, together with the principle. A lot of individuals seek to refinance their interest only loan for them to buy more time, i.e. to delay the settlement of the principle further.
But, this may additionally raise the risk on the loan, because the interest rates may go up further, the price of the house may come down or the economy may go down soon.
Refinancing of interest only loans is ideal for people who are anticipating big capital earnings in the next coming years or are intending to market their house by the time the interest-only period is over. This is a good alternative given that the financial situation is good, the interest rates are balanced and the costs of houses are rising. Interest only refinancing is recommended for individuals who have irregular incomes such as commissions or bonuses or people who are expecting an increase in their income in the future. The savings accrued from refinancing may also be spent for home improvement, which will increase the price of the house in the future.
About the Author:
Jason Myers is a professional writer and he writes mostly about loan refinancing online. He's also interested in lower mortgage offers.
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