Keeping the American Dream Alive Through Refinancing
If buying a home is the American Dream, taking out a mortgage or a double mortgage can easily turn into an American Nightmare .
In fact, the word mortgage itself is derived from a French-Anglo term meaning dead .
Here's another curious fact .
Americans often first own their homes half a century after buying it .
Home mortgage lenders are major players in the entire mortgage process .
Some, such as Fannie Mae, have helped millions of families of all tax brackets, to secure their own homes .
The logistics of mortgages are complex, with refinancing being a vital spoke in the wheel .
What is Financing?
We can better understand what a review is, if we first learn what a view is .
Likewise, it is easier to grasp what refinancing is by first tackling what financing is .
Simply put, financing is dedicating money for purchases, investments, or business actions .
And when people and businesses are financed, their chance of achieving success greatly increases.
What is Refinancing?
This process grants new financing .
Imagine a man named Mr .
Big took out a mortgage on his house .
He later gets a new mortgage from a home mortgage lender named Marty’s Mortgage .
The second mortgage’s interest rate is lower than the first mortgage’s, giving Mr .
Big the means to pay off the first mortgage.
What Are the Benefits of Refinancing?
Refinancing has several advantages, depending upon who makes use of it .
Among these are:
• Payment of other expenses: Consider the home mortgage lender who provides a homeowner with refinancing .
He offers a mortgage with a lower rate than that of the original mortgage’s .
The surplus of funds could be used to remodel a house or pay back a car loan in full .
• Potential tax write-offs: Suppose your second mortgage from a home mortgage lender was equal to the current value of your home .
Based on the Internal Revenue’s Service, you’ve actually taken out a pair of new mortgages .
Home Acquisition Debt is simply the first mortgage that you paid off .
On the other hand, Home Equity Debt can be calculated by subtracting the first mortgage from the second mortgage .
Interest from this amount can also be subtracted from the amount of federal income taxes .
Drawbacks of Mortgage Refinancing
Refinancing might sound like the greatest thing since indoor plumbing, but it is not exactly a walk in the park .
It also has disadvantages, namely:
• Tax returns: If your new mortgage loan requires mortgage points, then the full amount cannot be reduced from the current year’s tax return .
a mortgage point equals one percent of the loan .
• Fees and paperwork: Refinancing requires much paperwork and payment of several fees .
Depending on which type of loan you took out previously, fees such as closing costs would be required for refinancing .
However, it may be worthwhile to pay the fees, in certain cases .
For instance, one could argue that the fees are justified if refinancing results in payments that are drastically lower .
Credit Ratings and Mortgage Refinancing
One’s credit rating is a rough calculation of how much credit one can obtain, without putting the home mortgage lender at undue risk .
Before providing potential customers with mortgage refinancing, home mortgage lenders first assess their credit reports .
Equifax, Experian, and Trans Union are the most prominent agencies that create credit reports .
Usually, home mortgage lenders review one credit report that combines the three agencies’ individual reports.
For many people, the stack of bricks that form their homes represents the American Dream .
Under the proper circumstances, refinancing could help this dream come true.
If buying a home is the American Dream, taking out a mortgage or a double mortgage can easily turn into an American Nightmare .
In fact, the word mortgage itself is derived from a French-Anglo term meaning dead .
Here's another curious fact .
Americans often first own their homes half a century after buying it .
Home mortgage lenders are major players in the entire mortgage process .
Some, such as Fannie Mae, have helped millions of families of all tax brackets, to secure their own homes .
The logistics of mortgages are complex, with refinancing being a vital spoke in the wheel .
What is Financing?
We can better understand what a review is, if we first learn what a view is .
Likewise, it is easier to grasp what refinancing is by first tackling what financing is .
Simply put, financing is dedicating money for purchases, investments, or business actions .
And when people and businesses are financed, their chance of achieving success greatly increases.
What is Refinancing?
This process grants new financing .
Imagine a man named Mr .
Big took out a mortgage on his house .
He later gets a new mortgage from a home mortgage lender named Marty’s Mortgage .
The second mortgage’s interest rate is lower than the first mortgage’s, giving Mr .
Big the means to pay off the first mortgage.
What Are the Benefits of Refinancing?
Refinancing has several advantages, depending upon who makes use of it .
Among these are:
• Payment of other expenses: Consider the home mortgage lender who provides a homeowner with refinancing .
He offers a mortgage with a lower rate than that of the original mortgage’s .
The surplus of funds could be used to remodel a house or pay back a car loan in full .
• Potential tax write-offs: Suppose your second mortgage from a home mortgage lender was equal to the current value of your home .
Based on the Internal Revenue’s Service, you’ve actually taken out a pair of new mortgages .
Home Acquisition Debt is simply the first mortgage that you paid off .
On the other hand, Home Equity Debt can be calculated by subtracting the first mortgage from the second mortgage .
Interest from this amount can also be subtracted from the amount of federal income taxes .
Drawbacks of Mortgage Refinancing
Refinancing might sound like the greatest thing since indoor plumbing, but it is not exactly a walk in the park .
It also has disadvantages, namely:
• Tax returns: If your new mortgage loan requires mortgage points, then the full amount cannot be reduced from the current year’s tax return .
a mortgage point equals one percent of the loan .
• Fees and paperwork: Refinancing requires much paperwork and payment of several fees .
Depending on which type of loan you took out previously, fees such as closing costs would be required for refinancing .
However, it may be worthwhile to pay the fees, in certain cases .
For instance, one could argue that the fees are justified if refinancing results in payments that are drastically lower .
Credit Ratings and Mortgage Refinancing
One’s credit rating is a rough calculation of how much credit one can obtain, without putting the home mortgage lender at undue risk .
Before providing potential customers with mortgage refinancing, home mortgage lenders first assess their credit reports .
Equifax, Experian, and Trans Union are the most prominent agencies that create credit reports .
Usually, home mortgage lenders review one credit report that combines the three agencies’ individual reports.
For many people, the stack of bricks that form their homes represents the American Dream .
Under the proper circumstances, refinancing could help this dream come true.
Keeping The American Dream Alive Through Refinancing
![Keeping The American Dream Alive Through Refinancing]()
Reviewed by Henda Yesti
on
August 22, 2018
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