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Why would you want to refinance a loan?

Buying a home is a dream of many. Individuals in South Carolina and elsewhere often work hard most of their adult lives to achieve this goal. Thus, they will also work hard to not see their dreams come crumbling down. Despite the tireless efforts of individuals trying to make all mortgage payments, financial problems could make this impossible at times. Those unable to keep up with their current mortgage may seek to refinance it.

Why would you want to refinance a loan? Because mortgage rates can change and drop, refinancing a loan is ideal for those who seek to make it easier for them to pay their mortgage and keep on top of their current bills. Thus, if you are seeking to refinance your mortgage, you should take the time to understand this process and how to apply.

What does it mean to refinance a loan? Simply put, this means that a homeowner is paying off their existing mortgage by replacing it with a new loan. This means that the costs associated with a loan refinance are rolled into the new loan. In other words, a homeowner has a loan amount that has increased while their equity has decreased. Because it is possible to increase the principal balance of the mortgage while lowering the mortgage payments, many borrowers facing financial troubles gravitate toward this option. In order to lower their payments, a borrower must extend the term of their loan

However, just because you want to refinance your mortgage does not mean you will automatically be approved. A person might be denied refinancing when they are in fact eligible for it. Therefore, it is important to understand your legal rights in these matters and the programs for which you may qualify. This will ensuring your rights and interests are protected while you take steps to better your financial health.

Source: Thebalance.com, "3 Things to Know About Mortgage Refinancing," Elizabeth Weintraub, Aug. 5, 2017

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