Welcome to The Loans Reference: Refinancing Guide
Refinance Home Mortgage Loans Article
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Most of us find ourselves taking out a loan at one time or another in our lives, whether it's for a home, a car or personal reasons. At the time we take out the loan, it's usually set for some many months with monthly payments due on a certain day. The amount of the monthly payments is based on the current interest rate we're charged on the principal balance we borrow. Often, during the term of the loan, we find ourselves refinancing the loan for one reason or another. The main reason why people do refinancing is usually for a better interest rate, specifically if the loan is a home mortgage. With a home mortgage loan, refinancing for a lower interest rate can make a substantial difference in the total balance of our loan.
from:Lower interest rates are the most common reason for refinancing mortgage loans, but they are not the only reason for refinancing. When banks lend money for the purchase of a home, they will usually only borrow up to 80% of the value of the home (known as equity). For instance, if a home is valued at $100,000, the maximum amount the bank will borrow is $80,000. As time passes, the balance of the loan decreases while the equity of the home increases. Often home owners need extra cash for remodeling or other personal reasons so they choose refinancing by using the equity of their home as collateral.
An example of this method of refinancing would be that same $100,000 home. After a couple of years, the loan balance may be down to $70,000 while the value of the home may have increased to $120,000. In this scenario, the bank will borrow up to 80% of the home's value, which would be $96,000. This amount is $26,000 more than the borrower owes on his mortgage so they are eligible for $26,000 cash out. Refinancing of home mortgage loans is very popular for this reason.
While home mortgage loans are the loans that are most often refinanced, refinancing is not limited to just mortgages. Many borrowers take out loans when they purchase a car. A lot of people like trading their cars off in a couple of years to get a newer model. Many times the first car loan is not paid off, so they do refinancing of their first car loan and add it to the new car loan. Another reason is for additional cash for personal reasons. As long as the collateral of the loan (car, etc.) is worth more than the balance of the loan, banks are more than happy to help with refinancing, if the payments have been made on time, of course.
Refinance Home Mortgage Loans News
A Rush Into Refinancing as Mortgage Rates Fall - New York Times
 Sify | A Rush Into Refinancing as Mortgage Rates Fall New York Times, United States - By one account, the new program would be available only to home buyers, not to people who simply want to refinance their existing loan at a lower rate. ... Homeowners' Refinancing Jumps by Record Pace Proposal could drop mortgage rates to 4.5 percent Paulson Considers New Plan to Resuscitate US Housing Market |
US MBA’s Mortgage Applications More Than Doubled Last Week - Bloomberg
 Yahoo | US MBA’s Mortgage Applications More Than Doubled Last Week Bloomberg - The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan jumped 112 percent to 857.7, the highest level since March, ... UPDATE 1-US mortgage applications post largest gain ever FINANCIAL STOCKS Bulls outlast bears in Wednesday grudge match Ben Bernanke’s Christmas Gift: Mortgage Refis |
Bernanke Says US Must Step Up Foreclosure Efforts (Update1) - Bloomberg
 Reuters | Bernanke Says US Must Step Up Foreclosure Efforts (Update1) Bloomberg - The Fed chief outlined four possible options, including buying delinquent mortgages and providing bigger incentives for refinancing loans. ... Bernanke Calls for Action to Stem Home Foreclosures |
FDIC's Bair warns investors fighting loan changes - The Associated Press
FDIC's Bair warns investors fighting loan changes The Associated Press - WASHINGTON (AP) — Investors in mortgage securities who are challenging home loan modification programs aimed at avoiding foreclosures could provoke a ... |
Lower mortgage rates help but jobs, prices key - Reuters
Lower mortgage rates help but jobs, prices key Reuters - A government plan to sop up hundreds of billions of mortgage securities spurred a bond rally that yanked 30-year home loan rates down half a percentage ... |