Refinance Mortgage Loan
A Refinance mortgage is when we make a new mortgage to pay off an existing mortgage. There are 2 types of refinance loans: the Rate and term refinance, and the cash-out refinance.
The “rate and term” refinance is when we pay off the existing mortgage with one of the same amount, and only are changing one or both of the interest rate, and term of that loan. For instance, if you had a mortgage of $200,000.00 on a 30 year fixed rate of 6.5%, that had 20 year remaining on it, you could get a “rate and term refinance” for that same loan amount, but for a new 30 year term based on 5%, and lower your payments.
Because every time you get a new mortgage, there are fees associated with it, most rate and term refinances replace the old loan balance with a larger loan that will absorb the costs. The new mortgage could be $205,000.00 which could pay off the old loan with the old terms, and pay for $5,000.00 in fees of the new mortgage.
You can take this one step further with the cash out refinance. Say this same borrower wanted to borrower $50,000.00 against his real estate. We could possibly lend him $255,000.00 against his property, pay off the old loan, pay $5000.00 in loan fees, and net him that $50,000.00 in cash.
You can put that money to work for you in any variety of ways- property improvements, interest bearing investment accounts, invest in yourself through education etc.
The Debt consolidation mortgage is a cash-out refinance where the cash that is taken out is applied to reducing or paying off other consumer debts. This can be a very effective way to improve your cash flow, and create a scenario where any savings applied to the new mortgage balance can accelerate your payoff dramatically. I recently helped a family do a debt consolidation where they created $900 per month of additional cash flow. If they paid that extra $900 per month to their mortgage principal, they will be free and clear in about 10 years!!
At my company Mortgage Trust, Inc we have the ability to underwrite, document, and fund all types of refinance Mortgages right here in Portland. We control the entire process from end to end while also having pricing flexibility of sending the funded loan to a variety of mortgage services. This gives you the service advantage of a direct bank lender, with the pricing advantage of a broker
Please fill out the online loan application to find out how one of these refinance mortgage options could work for you.
