| There are several types of mortgage refinancing loans | | | | years then the real variable rate starts to kick in. |
| available in the market today. With these different | | | | Interest only type is self explanatory in the sense that |
| types of getting your mortgage refinanced, you can | | | | you are being ask to pay only the interest mostly for a |
| make the choices based on your circumstances and | | | | period of time. After the specified time has lapse, you |
| your needs. These are mostly taken out to make | | | | will start paying the principal. |
| some renovations, pay off debts or use the proceeds | | | | Fully amortization is one where your monthly payments |
| for your child's college education. Regardless of where | | | | are a combination of all the interest charges and |
| you will use the proceeds of the refinancing loan, it | | | | additional payments towards the balance. This is very |
| would be smart to know the different types in order to | | | | good option as it will reduce your balance every time |
| make an informed decision. | | | | you make your payments, thus paying off the |
| The different types are; fixed rate, variable rate, | | | | mortgage loan will be faster. |
| interest only, balloon type, home equity, and fully | | | | The home equity type of refinance is where you |
| amortizing mortgage refinance loan. | | | | borrow against your equity on the house and use it as |
| Fixed rate type is one where the interest rate is | | | | a collateral or security for your borrowings. You then |
| locked to a fix amount and will stay for the duration of | | | | be able to get the money in the form of a revolving |
| the loan. In other words, it would simply mean that you | | | | credit line or cash. |
| are going pay at a constant rate of interest for the | | | | So now that you know and understand the different |
| whole life of whatever balance you have. | | | | types of mortgage refinancing loans, you are not going |
| Variable rates are where the interest rates fluctuate | | | | blindly into applying to refinance your mortgage loan. |
| or changes with certain predetermine index. This is not | | | | Learning, understanding and knowing what the types |
| for the faintest of heart as this can change anytime as | | | | are can really help you make an informed decision |
| the market changes its directions. This type of | | | | when the time comes to refinance your mortgage |
| refinancing normally gives the borrower and | | | | loan. |
| introductory low rate which is usually between 3 to 5 | | | | |