Owning a house may end up being your biggest investment. It helps you build up equity, live your dreams, have control over costs, and have living security. Refinancing a house involves buying a home on a mortgage and replacing its payment with a loan.
Some reasons for refinancing a house include; reducing interest, cutting monthly payments, and enjoying part of the house equity.
Also, the process required to refinance a house is similar to getting a mortgage to buy a home.
Advantages of Refinancing a House over Purchasing a New House
Below are some reasons some people prefer to refinance a house;
- To save the stress of moving into a new home.
- It provides the possibility to extend the loan term and cut monthly payments.
- You have the freedom of up to three working days to decide refinancy a house.
How does Refinance a House Work?
Refinancing Your House
Refinancing involves buying a house and getting a mortgage to pay for the home with principal and interest. In this way, the house seller gets paid through the mortgage.
It is simply a process of paying off a house loan with a new mortgage.
The documents requirements for refinancing a house are the same as getting an original mortgage.
Buying a New House or Refinancing? Which is better?
Refinancing a house gives you the flexibility to pay less monthly plus other added advantages discussed earlier but buying a new home will give you the freedom to choose a different type of house that satisfies your needs.
So, the ball is in your court.
Conclusion
Whether you choose to refinance a house or buy a new one, the result of both of them is owning a home which is better than renting. Owning a home stands out to be one of the greatest investments ever.
Dr. Diana Rangaves, PharmD 