Refinancing of interest only loans simply means swapping one loan for another. It is an efficient method to lower the debt on existing loans. This is particularly beneficial if the current interest percentage are lower than the interest rates you are presently paying on the loan. Refinancing would allow you to change your high interest debt into a low interest debt, as the total monthly payment would become lower.
The extra money saved can be spent in something more profitable such as real estate or shares, or to settle high-interest debts like credit cards. Refinancing is also done for switching an adjustable rate mortgage into a fixed rate mortgage.
Refinancing has become very ordinary in recent years that almost three quarters of new mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very striking, especially when the period comes for the loan to get paid back. That signifies the loan will need to be repaid at the existing interest rate, together with the principle. A lot of individuals look to refinance their interest only loan in order to buy more time, i.e. to delay the repayment of the principle further.
However, this may additionally raise the risk on the loan, since the interest rates may increase more, the price of the house may come down or the financial situation may slump in the future.
Refinancing of interest only loans is ideal for people who are anticipating big capital earnings in the next few years or are planning to sell their house by the period the interest-only period has ended. This is an ideal alternative as long as the economy is good, the interest rates are steady and the prices of homes are rising. Interest only refinancing is recommended for people who have variable earnings such as commissions or bonuses or people who are anticipating a hike in their wages in the coming years. The savings accumulated from refinancing may also be used for home improvement, which will increase the cost of the house in the coming years. - 31876
The extra money saved can be spent in something more profitable such as real estate or shares, or to settle high-interest debts like credit cards. Refinancing is also done for switching an adjustable rate mortgage into a fixed rate mortgage.
Refinancing has become very ordinary in recent years that almost three quarters of new mortgages were refinanced loans in 2003.
Refinancing of interest only loans is very striking, especially when the period comes for the loan to get paid back. That signifies the loan will need to be repaid at the existing interest rate, together with the principle. A lot of individuals look to refinance their interest only loan in order to buy more time, i.e. to delay the repayment of the principle further.
However, this may additionally raise the risk on the loan, since the interest rates may increase more, the price of the house may come down or the financial situation may slump in the future.
Refinancing of interest only loans is ideal for people who are anticipating big capital earnings in the next few years or are planning to sell their house by the period the interest-only period has ended. This is an ideal alternative as long as the economy is good, the interest rates are steady and the prices of homes are rising. Interest only refinancing is recommended for people who have variable earnings such as commissions or bonuses or people who are anticipating a hike in their wages in the coming years. The savings accumulated from refinancing may also be used for home improvement, which will increase the cost of the house in the coming years. - 31876
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.
