When Your First Loan Simply Isn’t Cutting It!
Learn how refinancing can help you!
There’s no such thing as a do-over. But there is such a thing as a remedy (according to Adele at least). In the retail world, you can remedy a mistake (bike shorts, anyone?) by returning items you are dissatisfied with. With mortgages, the equivalent of returning something is known as refinancing.
“Refinancing” means taking out another loan, usually one with better terms, and using it to pay off your original mortgage. I know. This sounds kind of like paying off a credit card bill with another credit card. But trust me. It’s not.
First off, refinancing is a lot less risky than using a credit card to pay off another credit card (which is known as a “balance transfer”).
Second off, as long you as you keep making your monthly payments and find a loan that better meets your financial needs, you will not be in a worse position than before (unlike a person who simply shuffles around their debt in the hopes that it will magically fall off a cliff).
Instead of, say, having to make your payments all in one-dollar bills that you then have to toss out of your moving vehicle to the debt collector passing beneath you, you can have more flexibility about how you structure your payments when you choose a more “easygoing” lender.
The process of refinancing goes something like this:
- Get a new loan
- Pay off the entirety of your old loan (using your new loan)
- Start paying off your new loan which, fingers crossed, is more manageable for you
So, as you can see, there is no real way to escape a mortgage, but there is a way to minimize your debt. If your current plan is not working for you, call a SYOM team member today to discuss your options for refinance.
To learn more about what makes a good mortgage, read our article on “The Ideal Mortgage Loan.”