Many of us as house owners get excited when we get approval for a mortgage to buy a new home, without considering that the housing market keeps changing constantly and the interest rates fluctuate. The mortgage that we might have obtained initially, might not be ideal anymore. So, what can we do?
The best option for you is to go for mortgage refinancing. Mortgage refinancing can help us alter the terms of our current ongoing mortgage such as interest rates and also the repayment period.
What is mortgage refinancing?
In simple terms, mortgage refinancing is taking a new loan to pay the existing mortgage loan. This is a great option for all of them who are going through tough financial times and finding it difficult to repay the current mortgage amount every month.
One of the best parts of mortgage refinancing is the mortgage loan refinance rates, which are much lower than your original mortgage and also you get an extended period to pay off your mortgage with extra cash in hand. Mortgage refinance can even be done in cases where the credit history is not up to the mark. Just let your lender know about your credit history so that he can suggest you the best options with refinancing terms and conditions.
Paying off your mortgage in 5 to 7 years HELOC
Most of us taking mortgage loans choose a standard 15 to 30 years mortgage pay-off term on our home, and all because it is what we have always heard and learned. But the biggest problem doing so is, it takes another 15 to 30 years, in reality, to pay off the mortgage completely.
It won’t be wrong if we term mortgages as ‘Death Pledges’. The way a mortgage payment method is devised by financial institutions, we keep aping off the principle in smaller amounts and the interest keeps mounting for longer and longer as much as possible.
HELOC – Home Equity Line of Credit is a type of mortgage but different that allows homeowners like us to use 100% of our income in paying the principle and pay off our mortgage in much quicker time, as low as 5 to 7 years.
How does the HELOC system work?
HELOC is essentially a form of mortgage refinancing. Paying off a mortgage in 5 to 7 years HELOC allows you to lower down your interest rates without the closing costs that are associated with refinancing a home.
The most attractive feature of HELOC is the paid interest-only feature, though you will have to pay the interest and principal at the end of the draw period that will roll up into one amortized monthly payment plan. You can choose to make payments every month towards the principal amount or make a larger payment at the end, the choice is yours.
Many people are skeptical when they hear of HELOC for the first time, and mainly because it is something that everyone doe not does. But once you learn more about HELOC and its processes, you can see that there are huge economical benefits of HELOC, and it also allows you to pay off your mortgage quickly, as low as in 5 to 7 years.