Q: Will I have penalties if I pay off my mortgage early?
A: It all depends on the loan, so make sure you read those documents carefully. It would seem that paying off your mortgage as soon as you can is in your best interest. You would also think that the lender would want those funds as soon as they can. The problem though is that when you pay off the mortgage early, they lose out on a substantial amount of money in the form of interest.
If you are going to try to pay off your home loan early, you definitely want to discuss this with the lender. You don’t want to have to end up paying those penalties as they can be ridiculously high, and that is a waste of your money.
Q: What are my refinancing options?
A: There are several options when it comes to refinancing. First, you need to find out if your credit is good enough for you to do so. There may be an appraisal that has to be done. This is to verify the value of the home is worth what the lender may give you for it. The more equity you have in your home, the more likely it is that you will be able to successfully refinance it.
Talk to lenders about why you want to refinance and see what they can do for you. For example if your goal is to have some money to pay off other debts or to make a purchase let them know. If you want to refinance so that you can lower your monthly payment that is also information that can help them give you all the right options available.
Q: What will the rate of interest be if I refinance?
A: There are quite a few factors that will influence your rate of interest should you decide to refinance. They include your current credit rating, the economy, current interest rates, if you have an adjustable or a fixed mortgage, and your lender.
Since the higher your interest rate is the more your monthly payment will be, do all you can to get it lowered. By paying less in interest you will also save a bundle when you refinance over the course of your mortgage.
Q: Do I have to refinance with all the same buyers on the loan?
A: There are many things that can influence changes in ownership of a home. For example your first loan may have you and a spouse on it. If you are getting divorced and they have agreed for you to keep it, then refinance to get them off the loan. That way they don’t have any claim to that property in the future.
They won’t want to remain on there most of the time anyway. That mortgage would be a liability to them on their credit. It would also mean that if you defaulted on the payments, the lender could go after them to get those funds.