When it comes to credit and loans, there are so many terms and such a wide variety of options that might leave you dazed and confused. You may ask what the difference is between a second mortgage and refinancing in Bothell on an existing mortgage.
Basically a second mortgage is taking out a new loan on your Bothell house while re-financing is just reassigning the terms of your current mortgage for any number of reasons. With a second mortgage, you will have to make two separate mortgage payments every month. With a re-financed mortgage, you make one payment every month on the current mortgage, but under the revised terms after your mortgage has been re-financed.
A second mortgage can also be termed as a home equity loan and normally has a higher interest rate than the initial mortgage on your home. There are also different types of home equity loans. A home equity loan is a one-time loan that is taken out on your Bothell house while a home equity line of credit is like taking out a credit card with your home as security. The money is put into an account as long as there are still funds in it. The interest rate on your home equity line of credit can fluctuate from month to month.
Refinancing is an option you can choose when there are newer and lower rates of interest that you can take advantage of. You can then pay a smaller amount monthly. You can also roll all your debts into one with a refinanced loan and pay them out over a longer period of time. If you are under great financial pressure you can alter your Bothell mortgage payments so that there are smaller monthly payments made over a longer period.
Whenever you opt for a second mortgage or refinancing on your current mortgage, consider how the new rates will affect you over time.
For more information on Bothell area real estate contact Adrian Willanger 206 909-7536.
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