Refinancing of interest only loans just means swapping one loan for anew one. It is an efficient method to decrease the debt on current loans. This is especially beneficial if the current interest rates are lower than the interest rates you are currently paying on the loan. Refinancing would enable you to alter your high interest debt into a low interest debt, as the amount of monthly payment would become lower.
The extra money saved can be used in something more profitable such as real estate or stocks, or to settle high-interest debts like credit cards. Refinancing is also done for converting an modifiable rate mortgage into a fixed rate mortgage.
Refinancing has turned out to be so ordinary in recent years that approximately three quarters of recent mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very appealing, specifically when the period comes for the loan to get paid back. That signifies the loan will have to be paid off at the present interest rate, together with the principle. A lot of people look to refinance their interest only loan in order to buy more time, i.e. to delay the settlement of the principle further.
But, this may also increase the risk on the loan, because the interest rates may go up more, the cost of the house may come down or the economy may slump in the future.
Refinancing of interest only loans is suitable for people who are expecting huge capital gains in the next coming years or are intending to sell their house by the period the interest-only period has ended. This is a good option given that the economy is good, the interest rates are balanced and the costs of houses are growing. Interest only refinancing is recommended for people who have variable incomes such as commissions or bonuses or those who are expecting an increase in their wages in the coming years. The savings accumulated from refinancing can also be utilized for home renovation, which will raise the cost of the house in the coming years. - 29904
The extra money saved can be used in something more profitable such as real estate or stocks, or to settle high-interest debts like credit cards. Refinancing is also done for converting an modifiable rate mortgage into a fixed rate mortgage.
Refinancing has turned out to be so ordinary in recent years that approximately three quarters of recent mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very appealing, specifically when the period comes for the loan to get paid back. That signifies the loan will have to be paid off at the present interest rate, together with the principle. A lot of people look to refinance their interest only loan in order to buy more time, i.e. to delay the settlement of the principle further.
But, this may also increase the risk on the loan, because the interest rates may go up more, the cost of the house may come down or the economy may slump in the future.
Refinancing of interest only loans is suitable for people who are expecting huge capital gains in the next coming years or are intending to sell their house by the period the interest-only period has ended. This is a good option given that the economy is good, the interest rates are balanced and the costs of houses are growing. Interest only refinancing is recommended for people who have variable incomes such as commissions or bonuses or those who are expecting an increase in their wages in the coming years. The savings accumulated from refinancing can also be utilized for home renovation, which will raise the cost of the house in the coming years. - 29904
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.
No comments:
Post a Comment