Mortgages & Refinancing

Mortgages are long-term loans that offer relatively low interest rates. They help a lot of people make the dream of having a house to their name a reality.

Refinancing loans are new mortgage loans on a property already owned, typically to replace one or more existing loans on the property.

Keep reading to learn more, or click here to contact an Allstate personal financial representative for help.

Mortgages

Most people have heard of fixed-rate and adjustable-rate mortgages. A fixed-rate means your interest rate will stay the same until the loan is paid off. Adjustable-rate (also known as ARMs) have an introductory interest rate, which then adjusts up and down regularly.

A third type of loan you might not have heard of is a balloon mortgage. Here's how they work. They have a fixed rate, and your payments are calculated as if you had a regular 30-year mortgage. Then, after a certain period of time, the entire mortgage balance is due at once.

Here's an example. Say you have a seven-year balloon mortgage. You would make monthly payments for seven years, and whatever was left on the mortgage balance would be due in one large payment.

Refinancing Loans

Refinancing that includes additional cash is called a cash out. The cash obtained can be used to make major purchases such as automobiles, home improvements, and college tuition. With refinancing, it's possible to achieve a lower monthly payment and interest rate even when you do a cash out.

Keep reading to learn more, or click here to contact an Allstate personal financial representative for help.

Mortgages

Most people don't have hundreds of thousands of dollars available to buy their home free and clear. Mortgages make the homeownership dream possible for the average person. They generally offer low interest, and there are many repayment options to fit your budget and future plans.

Refinancing Loans

Refinancing is the process of paying off one mortgage loan with the money from a new loan, using the same property as a security. Homeowners typically refinance to shorten the term of their loan, to get cash out of their property's equity, or to take advantage of a lower interest rate.

Keep reading to learn more, or click here to contact an Allstate personal financial representative for help.

Mortgages are an excellent tool for any homeowner who can afford the monthly payments and wants to save money with tax-deductible interest.

The decision to refinance really depends on your personal objectives. Here are some of the most common reasons:

• To reduce monthly mortgage payments. When a lower interest rate on your loan is available - usually one percent or more - refinancing can help you save money every month.
• To cash out a portion of the equity in your home. You can get extra cash by obtaining a new loan for a balance larger than the one on your existing loan. Use the cash for anything from home improvements to college tuition.
• To obtain a stable interest rate. You can switch from the uncertainty of a variable interest rate to a more stable fixed rate.
• To consolidate debt. Similar to a cash out refinance, you can take a new loan for a larger balance than your existing mortgage. Use the cash difference to pay off any higher interest debts you may have.
• To pay off your mortgage sooner. You can switch to a shorter repayment term, which can help you save thousands of dollars in interest payments.

Keep reading to learn more, or click here to contact an Allstate personal financial representative for help.