Refinancing your home can save you thousands in interest payments over the life of the loan, as well as provide the opportunity to potentially make a profit. Refinancing is the process of replacing your existing mortgage on a house with another loan. There are several different types of refinancing, each with its own set of benefits and drawbacks.
If you’re looking to cut your costs and lower your risk of obtaining a mortgage, refinancing is a great option. The five most popular refinancing methods are listed below, with pros and cons for each one.
When you’re ready to refinance your home, it can be a scary proposition. There are so many different loan options that you may want to consider. With so many different loan companies and terms, it can be difficult to know where to begin. If you’ve been considering refinancing your mortgage, the list of mortgage refinancing companies might give you a clue as to which ones offer the best value for your money. This list will help you narrow down your loan search by providing a list of some of the top 5 installment loan companies to choose from when refinancing your home. You’ll know exactly who to call if you have any questions about refinancing or getting started on the process.
What is “Refinancing”?
Refinancing is the process of changing your loan terms and lowering your interest rate on your mortgage. While a traditional mortgage has a fixed interest rate, refinancing allows you to choose a variable rate mortgage. This is often a more affordable option, but it does come with some disadvantages. For example, while you can still refinance a 10-year fixed rate into a 10-year variable rate, you won’t be able to get the same flexibility with the new rate.
How Does a Refinance Work?
If you’re interested in refinancing your mortgage, the first step is to contact your mortgage lender and discuss your current loan terms. Most lenders will now allow you to refinance your loan without changing your loan terms. You will need to contact your lender to find out what type of refinancing you can do and how your new terms will affect the interest rate you’ll pay on your new loan. Once you’ve found a lender that will refinance your loan, the next step is to go through the refinancing process with that lender. This is where you’ll talk to the loan officer about your current loan and current interest rate, as well as your new interest rate and desired repayment date. With this information, the loan officer will create a custom loan modification that will lower your interest rate, but won’t change your repayment schedule.
Pros of Refinancing Your Mortgage
Lenders have historically been hesitant to refinance mortgage loans because it means you’re repaying your original mortgage amount over a longer term. That longer-term payment can eat away at your smaller monthly savings, causing you to end up with a lower net worth overall. When you refinance, you can choose a shorter term that’s easier for you to pay off, as well as a longer-term that’s easier for your lender to approve. If you refinance your mortgage, you can also try to get a lower interest rate on your new loan. While a lower interest rate can make sense if you plan on using the money from your refinance to purchase a more expensive car or house, it can be a big problem if you refinance to pay for other expenses.
Cons of Refinancing Your Mortgage
If you refinance your mortgage, you’re essentially giving away equity that you currently have in your home. While it makes sense to refinance when you’re able to pay off your mortgage, think twice before you refinance if you have any money left over after making all your monthly payments. If you have funds left over after making your monthly mortgage payments, refinancing can actually lower your net worth. While you may be able to refinance a lower interest rate mortgage, it’s important to remember that your lender will likely charge you higher interest on a variable rate loan compared to a fixed rate loan. While refinancing your mortgage can lower your interest rate, it also means you’ll be paying more in interest over the life of your loan.
How to Refinance Your Mortgage with an Installment Loan
If you’re interested in refinancing your mortgage, an innovative option is to refinance with an installment loan. To refinance with an installment loan, you’ll make a single monthly payment towards the balance, with the balance due at the end of the term of the loan. This may make sense if you plan on using the equity in your home to pay off your mortgage, or if you just want to avoid paying high interest on a 30-year loan. To refinance with an installment loan, you’ll usually transfer your mortgage loan from a loan that’s been on the banks or mortgage companies for 10+ years, to a loan that’s been with a specific lender for less time. If the loan is less than a year old, you may be able to refinance it with an installment loan. Otherwise, you’ll need to contact the lender to see if they’ll let you refinance a short-term loan.
Top 5 Installment Loan Companies to Choose from when Refinancing your Home
This is a summary of some of the top 5 installment loan companies to choose from when refinancing your home. It’s important to research each company carefully to make sure they provide a good value for your money. The top 5 list is not meant to be comprehensive, and you’re free to choose any company on the list. If you’d like more information about refinancing mortgages, check out our guide to refinancing your mortgage. You’ll find all the info you need to know to make the best financial decision for your situation.
These lenders offer the best installment loans:
- Universal Credit.
- Navy Federal.
7-Eleven Loan Companies
7-Elevens are private companies that make loans in a variety of forms. They’re not part of a bank or credit union, but instead work as loan shops owned and operated by local businesses. These businesses buy and sell a variety of products, including mortgages. So, when you refinance with an 7-Eleven loan, your new lender will likely be able to provide you with a better rate than if you had refrained from refinancing in the first place.
10-year Fixed Rate Mortgage (FRM) Companies
10-year fixed rate mortgages are on the lowest end of the spectrum, but they’re also the most secure. These types of mortgages are usually offered by banks or credit unions and have a fixed interest rate per year. If you’re interested in a 10-year fixed rate mortgage, make sure you choose a lender with a high rating from A+ BBB. Otherwise, you run the risk of higher interest on a short-term loan that may end up eating away at your savings.
5.3% APR Extension Loan Companies
These are actually government-backed loans. Lenders can apply for “5.3% APR Extension Loans” from the Financial Service Provider Council, which will lower your interest rate on a fixed-rate loan to around 5.3% if you have a bad credit score. These are great if you want to lower your interest rate, but can’t get a traditional lender to lower it for you.
Refinancing your mortgage is a great way to save money over the long term on your loan. And, if you’re able to get a lender to lower your interest rate on an extended-term loan, you can even pay for your refinance in cash. But, before you start the refinance process, make sure you do your research and get a good feel for which companies are the best value for your money.