The refinance lender
A refinance lender often requires an upfront payment of a percentage of the total loan amount as part of the process of the refinance debt. This amount is expressed in "points", sometimes called "premiums", with each "point" being equivalent to 1% of the total loan amount. If the refinance option selected involves paying three points, then the borrower will need to pay 3% of the total loan amount upfront. Most refinance lenders offer a combination of points and interest rates. Paying more points allows one to get a lower interest rate than one would be capable of getting if one paid fewer points.
The refinance mortgage
It was low interest rates that once created the refinance mortgage boom. With homeowners welcoming significantly reduced rates, the decision to refinance mortgage was a no-brainer. Now, with rates rising, refinancing is slowing down. No matter, there may still be some solid reasons why a refinance makes sense. David Letterman made the Top 10 list famous with classics like "Top 10 Messages Left on Fidel Castro's Answering Machine," and "Top 10 Things That Almost Rhyme with Peas." It's a good thing Letterman never tackled a Top 10 list about mortgage refinancing, it would probably be big on laughs and low on practicality.
Reasons for a refinance mortgage
Changing the mortgage term by using a refinance mortgage. Two variables usually determine what loan length is right for you: how long you intend to own your home, and what size payment you can afford. Buyers with healthy cash flow may opt for a 15-year mortgage to pay less in total interest. But buyers who intend to sell quickly might select a longer term to avoid tying up too much cash. Even if you carefully plan your mortgage, situations change without notice. If your mortgage no longer matches up with your plans and cash flow, consider restructuring it with a refinance mortgage.