What You Must Know to WIN With Your Mortgage Refinance
Refinancing a mortgage is a known concept, but how much do you know about it?
Please for your sake understand how refinancing works.
Many people refinance a mortgage with little thought about it, plus they don’t know what it’s all about. That means most people lose with their mortgage. They have little hope of WINNING with their mortgage.
What does it mean to WIN with your mortgage refinance?
It means that you will make it so that the refinance improves your financial situation, not make it worse.
Unfortunately, for most people, refinancing their mortgage makes their financial situation worse. Even if it may appear that they have improved their situation. They lose with their mortgage and they don’t even know it.
This is why it is so important that you refinance with our gold-standard exclusive Winner’s Mortgage program. And that begins with education on what you need to know. That way you can make the right decisions to WIN with your mortgage refinance, not lose.
What does it mean to refinance a mortgage?
It is critical to remember that this is a real estate refinance.
This means that real estate secures the loan. Very often and for most mortgages, that means your home is security for the loan.
Your home is at risk if you fail to make your mortgage payments. If anything goes wrong with the loan, you could lose where you live. The lender has the option to follow defined legal procedures to take your and your family’s home away from you.
This does not mean that you should not refinance. Or that you should not use mortgage financing for a valid purpose.
It does mean that you want to be very careful when using mortgage financing for your home. Know and understand the risk, and only do it for the right reasons.
Most people treat mortgage financing with little more thought than buying gasoline. They think all that matters is finding the lowest interest rate. That is a sure formula for losing their mortgage. That means losing financially. They could lose the very home they used as security for their unwise financial decisions.
Don’t let it happen to you.
What does mortgage mean?
A mortgage is known as the loan used to buy a home. Technically, this is not correct, although people use and understand it that way.
A mortgage is legal security that a lender has to enforce repayment of a loan on real estate.
Two primary documents used in a mortgage loan will illustrate what this means.
When you sign the stack of papers at your loan closing, the first two documents are the “note” and the “mortgage”.
The mortgage “note” details the terms of the loan. The interest rate, beginning balance, and the number of payments are all essential to determine the payment. It also includes any potential for terms to adjust during the loan.
The actual “mortgage” states that you agree to make the real estate, often your home, security for the loan. You accept that the lender can take your home away from you. If you don’t make the payments as specified in the note, this would happen. The law prescribes the procedure.
To understand this, consider where the word mortgage comes from.
“Mortgage” originates from two root words. The two words, “mortuus”, Latin meaning death, and “gage”, Old French meaning “pledge”.
So, put these two words together, and “mortgage” means “death pledge”.
Isn’t that a true picture of what a mortgage means?
Remember, a mortgage is also known as a “home finance” or “residential mortgage” loan.
This is a critical consideration for Winner’s Mortgage. It is a loan putting your home at risk. Understand that is what a refinance does.
To WIN with your mortgage, do it with this thought in mind. Use the proper care in setting up the financing.
Don’t put your home at any more risk than you can help.
A typical run-of-the-mill loan officer won’t care about that. That lone officer only cares about making a commission at your expense.
A credible Real Mortgage Consultant will work to protect you as much as possible. The goal is to set up the loan to your largest benefit. It means doing everything possible so you can WIN with your mortgage, and not lose like so many peoples lose. So don’t gamble! Bet on a winner.
How could you lose with your mortgage refinance instead of WIN?
There is so much that could go wrong when you choose a typical run-of-mill loan officer. That typical run-of-the-mill loan officer will tell you to do the refinance the way most people do. That loan officer will set up the refinance the way that most typical run-of-the-mill loan officers do, and you will end up losing with that refinance.
To WIN with your mortgage refinance, work with an experienced Real Mortgage Consultant. That is how you use the refinance to your best possible advantage.
What are the possible reasons you might want to refinance your mortgage?
Compare how a typical run-of-the-mill loan officer will do a refinance the basic way where you will likely lose. Discover how a Real Mortgage Consultant will help you in an advanced way so you can WIN by using our formula for success.
Reduce your interest rate.
Mortgage interest rates are at historically low levels and have been for quite some time. This offers some special opportunities. You can save money on your mortgage that otherwise may not be available.
A rough guideline says that you need the interest rate to go down at least 1% to 2% to make a refinance worthwhile. But this is very subjective. So many factors go into your specific situation.
The reduced payment and interest from a refinance can make it worthwhile.
A typical run-of-the-mill loan officer will stop there. That loan officer may provide a basic break-even analysis. That loan officer will collect the commission and move on. And that loan officer will congratulate you on your lower interest rate and payment.
Most people are gullible enough to believe it and stop there. If you believe it, you will lose with your mortgage refinance – even though you will think you won.
A credible Real Mortgage Consultant will also do a mortgage refinance for you for a lower interest rate. How a field-proven Real Mortgage Consultant does it will go so much farther. It sets you up so you can WIN with your mortgage refinance, instead of losing as most people lose.
Here is what a fully-trained Real Mortgage Consultant will do for you. You won’t get from a typical run-of-the-mill loan officer.
A break-even analysis is the most basic review of whether it is worth it to refinance.
Here is the formula.
Refinance cost divided by reduction of principal and interest
This equals how many months cover the refinance cost.
A lower number is better.
For example, let’s look at an answer of 24 months. This means if you move or refinance the mortgage again before 24 months go by, you lose money on the refinance. Your closing costs were higher than your payment savings.
Stay in that mortgage for longer than 24 months, and you break even. You will pay for your refinance cost. Each month after that reduces your cost.
A typical run-of-the-mill loan officer will stop there if he or she even does this simple analysis at all.
Here’s the straight talk, a Real Mortgage Consultant will go further.
Do the rate reduction refinance. Use it to speed up your freedom from loan payments, freedom from your job, and freedom to do what you want? That could be true freedom.
An experienced Real Mortgage Consultant will help you with this.
How could you WIN if you keep making the same payment you were required to pay before?
What if you start paying, even more, every month than you were paying before?
That means you will pay extra on the principal every month. This dramatically shortens your time to pay back the loan. Your dependable Real Mortgage Consultant will help you analyze what this means for you. You will have cold, hard facts. Together, you can think through your best strategy.
Do you have other debts, other loan payments? How can you use this refinance to speed up the payment on those loans? This does not necessarily mean consolidating those debts into the loan. That could be a good solution in some situations.
Here are often used refinance strategies. These are useful even if the new interest rate is not lower than the existing interest rate.
Let’s look at them further.
Reduce the loan term.
Refinance a 30-year mortgage to a shorter term, such as 20 years, 15 years, or even 10 years.
The idea is to reduce the total amount of interest you need to pay over the time of the loan.
This interest reduction comes from two factors.
First, shorter-term mortgage loans have lower interest rates than 30-year loans. In an equal or lower market, the 15-year loan will have a lower interest rate. That will provide interest savings.
Second, you will pay much more interest for longer loan terms than shorter loan terms. By reducing the loan term to 20, 15 or 10 years, you can save a significant amount of interest.
Put these two factors together and the loan term reduction refinance can have a lot of appeals. At least on the surface.
A typical run-of-the-mill loan officer will be happy to do this for you. Most likely there will be little discussion or analysis at all. The loan officer cares about the commission he or she will receive. It won’t matter to this loan officer whether doing so is the best strategy for you.
Follow this typical run-of-the-mill loan officer’s advice. Then you could miss on WINNING with your mortgage. And when you miss the best WINNING option, you lose.
A genuine Real Mortgage Consultant will look at this in a better way.
Doing a loan term reduction refinance can be a good option in a very specific situation.
Do you have no other debts or loan payments? Do you have plenty of disposable income (that is, a low debt-to-income ratio)? Then it could be a good idea for you to do a loan term reduction refinance.
Otherwise, keeping your loan as a 30-year fixed is likely your better choice.
Here’s what happens when you shorten your loan term. Your required minimum payment every month increases.
A fully-trained Real Mortgage Consultant teaches a better way. When you have other debts or loan payments, you want to focus on those payments first. Pay as much money every month to one of those other payments until you pay it off.
The problem with setting up a 15-year loan instead of a 30-year loan is this. That higher required payment works against the recommended strategy. It means you have less money available every month to focus on your higher priority debts.
This will offset any minimal benefit you receive by reducing the interest rate.
Pay the least amount of interest and become free of all loan payments in the shortest possible time. Follow our Loan Payment Freedom Secrets strategy.
Without plenty of disposable income, you could be in trouble. Without a low loan-to-value (LTV) ratio, that higher required payment puts you at risk. You are vulnerable to a 15-year loan if your income decreases without warning.
This became pretty obvious in March 2020 with the sudden virus situation. Circumstances can change fast. That includes the continuation of your paycheck at your current rate. And it does need such an extreme situation to put you in a bind.
Most people do not have plenty of extra income. They do not have enough extra cash stashed away for emergencies. They are better at keeping their required payments lower. Their best strategy is to pay ahead in a systematic, defined strategy. That is what a credible Real Mortgage Consultant will help with.
This is what it means. Reducing the loan term with a refinance can be the best strategy in only one situation. That is for people with very low debt-to-income ratios.
But a typical run-of-the-mill loan officer will do it for anyone with little extra thought. That loan officer will be happy to receive the commission at the customer’s expense.
This is better. A dependable Real Mortgage Consultant will give you extra effort and not settle for less. This will make sure your refinance is the best strategy for you. An experienced Real Mortgage Consultant likely will recommend an alternate strategy instead. This will be an alternate strategy that is most likely better for you.
Debt consolidation refinance.
This is such a tempting refinance that it has become very common – and very dangerous.
Do a debt consolidation the wrong way and you’re in trouble, you lose. That is how a typical run-of-the-mill loan officer will do it. You will lose big time even though at first you may feel like you won.
Instead, use debt consolidation as a tool as part of a longer-term strategy and you can WIN. Do it the way a professional Real Mortgage Consultant will use it and you can WIN with a debt consolidation refinance. Don’t gamble! Bet on a winner!
It all depends on who does a debt consolidation refinance for you and how you use it. That makes all the difference between whether you WIN or lose.
A typical run-of-the-mill loan officer will sell you on a debt consolidation refinance. This loan officer will convince you of this. Refinance your higher interest rate and higher payment unsecured debts with debt consolidation. Refinance your mortgage for more than you currently owe. Use that extra money and pay off those debts. The result is a lower payment than all the previous separate payments combined.
This is all true and it can be a valid reason to do a debt consolidation refinance.
Here’s where you lose. Stop there like a typical run-of-the-mill loan officer will do, you lose. Stop there, the loan officer gets paid for doing the loan at your expense. The loan officer then takes the money and runs. And you lose like most people who do a debt consolidation loan lose.
Here are the problems with a debt consolidation loan that you must consider.
These problems don’t mean that you shouldn’t use a debt consolidation loan. You must know the potential problems. Don’t believe what a typical run-of-the-mill loan officer tells you.
A debt consolidation converts unsecured debt to secured debt.
If you don’t pay unsecured debt, the consequences are not fun. They include collection calls, a lower credit score, court judgments against you. But at least they can’t take your home away from you.
You can have a false sense of security after a debt consolidation refinance.
You may think you’re done and your problem with debt is over. The problem is that all you did was deal with the symptom of the problem. If you don’t deal with the problem itself, then it could return and become even worse.
No doubt you’ve heard of experiences where someone did a debt consolidation loan. They paid off their credit cards with that loan. This left those cards sitting there with a zero balance. Then, before they realized what they had done, they put new balances on those cards.
The moral? When you don’t use a debt consolidation loan correctly, you lose. You end up with more debt on your mortgage – and more debt on your credit cards! You will be worse off than you were before! This is all too common to ignore. Don’t lose like this!
But a typical run-of-the-mill loan officer will pay little attention to it. All that typical run-of-the-mill loan officer cares about is getting paid. Get you into the loan, whatever it is. Don’t let it happen to you!
A fully-trained Real Mortgage Consultant makes a critical difference for you. Only do a debt consolidation loan if it makes sense for you upfront. Only do it if there is a long-term plan. That plan is to be sure that the debt consolidation loan does its intended job for you.
This is where our exclusive and top-of-the-line Winner’s Mortgage Master Plan comes in. You need the Winner’s Mortgage Master Plan. It is the formula for success! It is our gift valued at thousands of dollars and frees to you when you close your mortgage with us.
Our straightforward Winner’s Mortgage Master Plan is essential for you to WIN long-term regardless of what type of loan you do. It is even more important when you do a debt consolidation loan.
You can’t afford to get it wrong with a debt consolidation loan or you could make a difficult situation even worse.
The top-drawer Winner’s Mortgage Master Plan is only available with the Winner’s Mortgage program. This is your benefit to work with your credible Real Mortgage Consultant. That’s how you WIN with your mortgage!
Cash out of equity.
With enough equity in your property, it can be possible to borrow against that equity. Enough equity means the value of the property after deducting the mortgage balance. It can be possible to refinance to borrow part of that equity.
People borrow money like this for almost any imaginable purpose. Home improvement projects. Invest in stocks. Buy an investment property or second home. Build a business. Consumer type spending, vacations, for example.
Some of these purposes could be more recommended by advisors than others.
It is possible to also do this with a second mortgage. In that case, refinancing the mortgage would not be necessary.
Change loan programs.
For example, consider an adjustable-rate mortgage. To change it to a fixed-rate mortgage requires a refinance.
Another example could be a loan with a higher interest rate due to bad credit. With an improvement in that customer’s credit, they qualify for a better loan program. Refinancing is necessary to improve the loan program.
You can WIN!
It is possible to WIN with your mortgage refinance. You don’t have to lose any more.
WINNING begins with your understanding of what a mortgage really is. It continues with what you need to know about the various mortgage refinance options.
Our Winner’s Mortgage program along with our exclusive and rock-solid Winner’s Mortgage Master Plan is how you do it. It sets you up to WIN and not lose.
Finally, know how you get the straight information. You get a refinance that is really in your best interest from a field-proven Real Mortgage Consultant. You are guaranteed with nothing but cold, hard facts. It is very unlikely that will happen from a typical run-of-the-mill loan officer.