A Deeper Understanding of Mortgage Refinancing

Home Mortgage in OgdenLoans are beneficial, especially if you have a major project coming up but have insufficient funds. Acquiring any type of loan, however, depends on several factors which include your credit worthiness and debt-to-credit ratio. If you already have a loan and need to take another one, there is always a way for you. Refinancing is the right path to walk on.

Here is how, as detailed by Wasatch Peaks Credit Union.


Refinancing refers to taking a new loan from your lender but with different terms. The various reasons for refinancing your home mortgage in Ogden could include shortening your term, lowering your payment, and using built-up equity to get cash out of your home. The decision to refinance your mortgage depends on many factors, but majorly depends on your goal of refinancing.

Relevance of Equity to Refinancing

Equity refers to the assessed value of your home minus the loan amount you owe your lender. The value of your equity, like your decision to refinance, also relies on your refinancing goal. More equity translates to better interest rates, thus lower monthly payments. You can obtain more money from a cash-out refinance, all because of more equity value. Additionally, many mortgage lenders charge their clients a monthly fee with down payment—private mortgage insurance—however a good equity value exempts you this charge.

Refinancing Costs

While getting a new mortgage, it’s possible to include the additional costs to the refinance amount. Refinancing to lower your payment or consolidate your debt might result in higher interest rates and a longer loan term. This eventually means you will pay more interest in the long run.

Although the decision to refinance entirely depends on you, some states have laws regulating your frequency of refinancing. While this sounds restricting, the major goal of such limits is to benefit you as the homeowner.

Lastly, it is good to self-evaluate your financial situation before deciding to take the refinancing road and regardless of your refinancing goal, refinancing should push you to a higher financial level.