When looking for some breathing room in your financial health, refinancing a loan could be a helpful option.
Refinancing is something that you associate with mortgages. But refinancing goes beyond just helping people pay off their mortgages–the concept of a refinance can apply to just about any loan out there, from your student loans to your auto loan. So whether you’re renting a terribly expensive tiny studio in San Francisco or a home in Wyoming, or a student with loans, it’s worth knowing how the process works and how it can help you.
What You Need to Know About Rate-and-Term Refinancing
If you are considering refinancing something like an auto or student loan to get a better interest or change the rate term, consider rate-and-term refinancing. This type of refinancing can be helpful and beneficial, especially if you took out your loans when interest rates were ridiculously high. It’s also helpful if you need to alter the amount due each month.
This is a good option if you need money fast. With this kind of refinancing, it means that your new loan is for more than your existing loan. You get the difference from the new loan and old loan. Be weary, though! You still have your old loan which you have to pay, and you have to pay back the cash received. Oh, and you pay interest on all of it. Creating a budget for this kind of loan is recommended to see how long it will take you to pay it back, and if you even can pay it back.
It doesn’t necessarily mean you’ll save money over time since you are still paying the interest rate. You also sign up for a new loan that comes with its own terms and conditions different from the ones the original loan had. Be sure to research the negatives before you blindly refinance.
If you’re feeling intimidated by the process, contact a dedicated home loan specialist like me, Andraya Coulter. I serve the Bay Area and the entire state of California and Texas with quality, suitable, home loans! I can help guide you through the refinance process and make sure you get the home loan you deserve. Call me!