Published on October 22, 2009.
Mortgage refinancing can be defined as the process of negotiating a new mortgage – either with the initial lender or a new lender – after the initial mortgage is paid off over the length of the amortization period. Mortgage refinancing is an excellent way for prudent borrowers to re-examine their financial circumstances – for example, to see if their circumstances have changed so that they can shorten the amortization period and pay their mortgage off more quickly, thereby cutting down on the total interest they will pay in purchasing their home.
Refinancing your residential mortgage is not an act exclusively reserved for the time your residential mortgage matures. There are some great reasons for refinancing your residential mortgage prior to this. This is why refinancing can also be defined as the obtainment of a new replacement mortgage on a property that is already mortgaged. Keep in mind that as your home’s principal is paid off your home equity – or the difference between what is owed on a home and its market value – increases. With mortgage refinance, you can access that home equity through a second mortgage or home equity loans secured against the equity in your home, even during the term of your first mortgage. Talk to a financial advisor to determine the mortgage refinancing product that is right for your circumstances.