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Keywords:

mortgage refinance, 2nd mortgage, consolidate mortgages


When you refinance both your first and second mortgages into one new loan, you will have only one low monthly payment to make, which may save you hundreds of dollars in interest over the life of the loans. If you consolidate your two mortgages into one, you may refinance at a cheaper interest rate than if you did it individually. Refinancing your second mortgage, the rates of which are often several points higher than those of your first mortgage, might result in considerable cost reductions for you. You will also save money on application fees and other charges associated with concluding the transaction.

Methods That Can Reduce The Monthly Cost Of Your Mortgage Payment


When you refinance your mortgage, you may choose one of two routes to reduce your monthly payment amount. The first option is to look for a mortgage with a low interest rate. Therefore, even if you keep the same term for your loan, you will still notice a reduction in the amount that you pay each month for your mortgage. At least in the beginning of your house loan, the loans with the lowest payments will be those with an adjustable interest rate and loans for interest only. On the other hand, a loan with a fixed interest rate might provide you with affordable rates together with the assurance that they will not increase in the foreseeable future.

You also have the option of extending the length of your loan, which is particularly useful in the event of your second mortgage, which is typically for a period of five to ten years. You may reduce the size of your monthly payment by extending the time over which you make principle payments when you consolidate your existing debt into a thirty-year loan. However, the interest rate that you pay as well as any other fees will be greater if the duration of the loan is extended.

Finding the Most Appropriate Loan


When you have decided what kind of loan and conditions you want, the next step is to look around for a reputable lender so that you may save even more money. There is a wide range of variation in the interest rates and closing expenses that are charged by different lenders. The annual percentage rate, or APR, will inform you how various loans compare to one another overall, both in terms of interest rates and the expenses of closing.

Be mindful of paying hefty closing fees, though, if you anticipate moving or refinancing your mortgage at some point in the not too distant future. Even if they are able to get you a cheaper interest rate, the only way you will get a return on your investment is if you retain the mortgage for a number of years.

Don't make your choice of lender dependent on the interest rates that are advertised. Make sure you get a customised loan quotation based on the information you provided about yourself. If you have more exact figures, you will be able to make an educated decision on who can provide you the most beneficial financing terms.