Refinancing: A WIN-WIN SOLUTION

2007-03-08 10:33:40

( Financial )



When you need to restructure your existing loan or mortgage, the best option you have is refinancing. Refinancing is actually taking out a second loan or mortgage on top of your present one in order to change the payment arrangement and make it more manageable for you.

RE-ARRANGING YOUR DEBTS

Sometimes, a refinancing can also be used to finance a business endeavor or a major purchase of a product or service. You can also use the money that you will receive to either pay other debts or consolidate and put your credit in order.

For instance you need to refinance your house, you should canvas for the prevailing mortgage refinance rates on the market. Of course the rates will be different from when you originally took out the loan, but by this time you have a better knowledge of your financial condition, and should be able to chose the term or package most appropriate to your situation.

If you took out a student loan to fund your college education, and now you want a more suitable payment arrangement plan than the one you have right now, you can do so by availing of student loan refinancing.

A WIN-WIN SITUATION

Refinancing is actually a widely used and accepted method of taking control over your finances, before it runs out of control. It is conceding that the present payment scheme is not the best one for you, but that you are willing to make the necessary adjustments if the lending company allows you to do so.

Lending companies and financial institutions recognize the fact that their lenders do not want to default on payments and are willing to make good on them if given a chance. That is why they are offering refinancing services in the first place. Of course it is still is business to them; but refinancing when used wisely is a certified win-win situation for all parties involved.


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