Refinancing a Residential Mortgage

Since 1999, Service 1st Mortgage has delivered home loan refinancing programs designed to minimize the burden associated with monthly mortgage payments. Service 1st Mortgage’s licensed professionals emphasize education, working with homeowners to understand how the refinancing process works.

At its most basic, refinancing involves taking out a new loan that replaces the existing mortgage. For homeowners, the advantage of this is taking advantage of current rates and loan policies, and significantly lowering monthly payments, as well as interest paid on the total owed over the mortgage lifetime.

Another advantage is that it often allows the repayment clock to be reset. For example, if you are seven years into paying off a 30-year mortgage, there are 23 years remaining to pay the loan off. Refinancing to another 30 year loan starts this process again and gives you more time in which to repay the loan. Alternatively, the term of the mortgage may be shortened, for example from 30 to 20 years, which will carry higher monthly payments but lower the overall interest paid.

Keep in mind that closing costs are involved in any refinancing calculation. These typically range from two to five percent of the amount refinanced and include appraisal and origination fees.