How To Refinance a Mortgage: A Step-by-Step Guide

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What is a mortgage refinance?

A refinance is when you go to your lender to get a better mortgage rate. Just like going to a different store for a lower price on a product you already have in your possession. Refinancing your mortgage can improve the monthly payment that you are paying and have monthly savings that can reduce any outstanding balances on your mortgage. This is the most common way to save on your mortgage. Many financial experts and mortgage lenders are starting to refer to it as a "qualified mortgage" or a "qualified mortgage refinance" instead of a "refinance." These loans can reduce interest costs by several percentage points, which can translate into an extra $1000 or more per year that you can put into savings or a new investment opportunity. Are there downsides to a refinance?

How do you get started with refinancing?

How to Refinance a Mortgage: A Step-by-Step Guide When it comes to how to refinance a mortgage, your first step is deciding how to proceed. There are four main ways to do a refinance. Secured Refinance. This is often the most attractive refinancing option, as it is secured by real estate. If the seller is willing to use the proceeds from a sale to refinance, the lender who provides the loan is putting up cash. If the borrower has a co-signer, it will still go through the same process to have the second person sign. (There are still some restrictions and costs if you have to put up more cash, however.) Loans Against Income. Many lenders will accept a loan against your home's value, even if it is higher than your current mortgage.

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Is refinancing the right choice for me?

You've just had your house appraised and realized that the mortgage on your home is more than you can afford. To avoid foreclosure, you can try to refinance it, but the process can be challenging. Here's a step-by-step guide that may help you determine if you should refinance your mortgage or look into other options for solving your mortgage woes. What factors influence my mortgage interest rates? A mortgage's interest rate depends on the loan type (such as fixed or adjustable rate), the loan's interest rate and the overall market interest rates. The current interest rates can be seen in today's market with the monthly cost for a 30-year fixed mortgage, which has an interest rate of 4.5 percent. A refinanced mortgage's rate can be used as a comparison.

What are the steps of getting a mortgage refinance?

Mortgage refinancing is a way to lower your interest rate. These are the steps you’ll need to follow. Start with an offer The first step of mortgage refinancing is determining your interest rate. There are two main types of mortgages – fixed-rate and adjustable-rate. These terms refer to the interest rate that a loan will be reset each year, and the interest rate at which you’ll pay back the loan at the end of the term. Fixed rates For a fixed-rate mortgage, your monthly payment will stay the same through the life of your loan. These loans will be repayable for the entire term of your loan, whereas adjustable-rate loans are repayable based on your current interest rate. An adjustable-rate loan will increase in cost when your interest rate rises. What type of loan do you want?

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The different ways to pay off your mortgage

by Denise LainoThe different ways to pay off your mortgage by Denise Laino Why would you want to refinance a mortgage?


When a mortgage is up for renewal, be sure to shop around for the best rate possible. If you have any questions, concerns, or problems with your current loan, don't hesitate to call one of our mortgage experts at SunTrust, who can help you on your way to a new mortgage.