Refinancing your Home Loan in Chicago

Posted in

Known as the "Windy City", Chicago is the largest city in the state of Illinois. The greater metropolitan area, known as Chicagoland, encompasses a population of 9.4 million, making it the third largest in the United States. Chicago also has several dozen distinct neighborhoods to match its ethnic diversity and it is divided into 77 community areas. Right now, the real estate market in Chicago is booming.

Refinancing your home loan is quite an effective method to save money, and here is how it works. The idea behind home loan refinance is basically getting a new loan to pay for the already existing home loan, because the new loan has a lower interest rate. Lets say for example that you have a home loan with a 10% APR, but you have just found that another lender is offering you a home loan that has 8% APR. So what you do is you sign with the second lender, use the borrowed money to pay off entirely the first loan, and you are left with just one loan that has a lower interest rate compared to your first one. This is what refinancing your home loan is all about. This method is applicable for all real estate properties, no matter if it is a condo, home, townhouse or an apartment.

The advantages of refinancing your home loan are obvious. You can get better terms, lower rates, and other benefits that will essentially allow you to pay off your loan much faster.

The statistics have also proven the advantages of loan refinancing as a record number of Americans used it in 2001 and 2002. Nowadays, more and more home owners are understanding that this idea can help them save a lot of money. Home loan refinance is an option for people with bad credit as well.

As it was already mentioned, refinancing a home loan is getting a second loan with a better rate than the first one. But you may ask, why not choose the second lender in the first place? Well, there could be many reasons for that. One is you could not have spent enough time to look around for the best financing deals. Or, you could have availed of an indirect financing where your lender charges a higher interest rate compared to those you availed of directly from banks and other lending institutions. Either way, refinancing a home loan will save you cash.

Refinancing your home loan starts by knowing your current interest rate. This information you can get from your lender or you can find it in the loan documentation. Then you have to start searching for a provider that is offering a lower rate. You'll find that many lenders are offering a very low rate, and then you end up finding out that this rate does not apply for you, because of your particular situation. To avoid that, get a copy of your credit report and find out your credit score.

Once you are ready to refinance your Chicago home loan, research mortgage lenders and their rates. Online mortgage websites allow easy comparison shopping. Look at both interest rates and fees of refinancing quotes. Usually a slightly higher rate with low fees is the best deal. Once you have decided on your terms, you can finish your loan application online or through the mail. Quotes are not guaranteed, so rates may vary slightly once your application has been approved.

By : Dave Badge