Refinance
Advice
Low
Down Payment Issues
Oftentimes,
first time home buyers are so motivated to buy a home and leave
the rental market behind that they place a 10% down payment
on their new home, instead of the optimal 20%.
As a result, they were probably required to take a 1st mortgage
for 80% of the home's value and a 10% 2nd mortgage at a higher
interest rate.
Fortunately, in some areas of the country housing prices have
been increasing significantly and soon afterwards, buyers often
discovered that the increased value of their home has put them
in a position where the total debt on their home is 80% or less
of the home's increased value.
When this happens, it can oftentimes be a very wise financial
strategy to refinance the 1st and 2nd mortgage into one loan,
a loan that will oftentimes bring the buyer the best rates available
in the marketplace at that time, saving them a substantial amount
of money.
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