What we actually mean by “mortgage refinancing” is to replace your current home loan with another loan which offers a lower interest rate. In this case the property is kept as collateral. This is given consideration when someone is unable to make his payments on time or the interest itself is high in nature.
The benefits of refinancing are as follows –
► To liquidate your high interest loan
It is known that the rate of interest of refinance loans is generally lower than other mortgage loans available. In this way you can get your high interest home loan paid off and also fall into a lower interest rate regime.
► To eliminate your PMI
PMI stands for Private Mortgage Insurance which is actually required when the borrower is able to pay 20% or low as down payments. The borrower might take the advantage of this by paying only 5% or even 3% as down payment.
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