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Mortgage Refinance   

With the current state of the U.S. economy and in particular the housing industry, you may be hearing many terms floating around that are related to mortgage loans.  One such term that you should pay attention to is "mortgage refinance."  This is one of the best ways to lower a monthly mortgage payment after you have been in your home for a few years.  Mortgage refinancing is basically getting a new home loan to replace the current mortgage loan you already have.   

When you get your initial home loan, you agree to a specific term, such as 30 years.  As you live in the home and make the payments over time, the principal amount decreases, as well as the term.  If you have lived in the home for 10 years, you would only have 20 years left on the term of the loan.  Your principal will be lower than when you first took out the loan because some money from your monthly payment will have gone toward it.  When you do a mortgage refinance, get a loan for the current amount of principal you owe, and you can decide on the new term.  If you choose to go with a 30 year term for your new loan, you will be able to stretch out the payments that were going to take you 20 years to make to make them over 30 years instead.  This will lower your payments, and thus should help you be better off financially. 

There are a many other options for a mortgage refinance that are not as streamlined, but that may be more appropriate for your situation.  For instance, if you need to have some extra money to help get your kids into college or some other immediate expense, you may want to go for a cash-out refinance.  With this type of a mortgage refinance, you are pulling cash out of the equity you have in your home to use now.  If you plan to do this, you will have to have an appraisal done on the home, because you typically can't borrow more than 80% of the value of the home.  Banks may be a little tighter on their specifications now with the mortgage problems the country has faced.    

If you are struggling to make your payments and your credit has also suffered, you may need a bad credit mortgage refinance.  The interest rates on this type of mortgage are a little higher than with a traditional loan, but by taking the payments and stretching them out to a longer term, you still may be able to lower your payments.  Do some checking around to see if mortgage refinancing is a good option for you.  It could very well save you some money.