Thursday, September 25, 2008

Refinancing A Real Estate Investment

Refinancing a real estate investment offers a consumer the opportunity to receive a lower rate of interest on payments toward a home, building, or other property. This can be one of the easiest or most tedious processes for a homeowner to pursue. Either way, the outcome will be worth the effort because money will be saved. Taking the time to refinance does not have to be a big ordeal but it will, no doubt, produce big results for the individual.

The purpose of refinancing is to lower the interest rate in order to lower monthly payments and, on the whole, the entire loan. This allows homeowners or investors more freedom to either make lower minimum monthly payments or continue to make the same payments while taking years off the time they would have had to pay. When paying an existing mortgage for a decade or more, a few years can mean a lot. Refinancing a real estate investment can never be a bad thing. In fact, it is a financial strategy that proves to be very smart.

When looking to go through the process of refinancing, a person must take into consideration the lender they would like to refinance with. Many times the homeowner will decide to go with the existing lender, perhaps the bank. By going with an existing lender, the homeowner will be able to maintain relationships that already exist, providing the essential element of trust. Some homeowners may be uneasy about refinancing a real estate investment at first. Like anyone looking to take a loan, the consumer must be able to trust the lender. In this situation, a consumer would hope the lender would be able to find the lowest percentage rate and make a seamless transition. However, this is not always the case.

In some cases, the existing lender can not provide the lowest interest rate because of a number of factors. When this occurs, the homeowner may wish to explore other lenders. If a lender is found with a lower interest rate, the application process may start all over again. Since the individual does not have an existing loan with this lender, all of the information about finances, credit history and personal information will need to be provided as well as another application and perhaps application fees. In the end, if the interest rate is much lower than the other estimates, it may be worth the trouble to continue to pursue refinancing a real estate investment. Bottom line, people must remember to live within their means. God has given His people the ability to make money and Christians should learn to spend and save wisely. "But thou shalt remember the LORD thy God: for it is he that giveth thee power to get wealth, that he may establish his covenant which he swear unto thy fathers, as it is this day." (Deuteronomy 8:18)

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