Given the trends extrapolated by major real estate research centers such as the Colliers International, PricewaterhouseCoopers, and Swanepoel, the year 2014 and the upcoming five years will provide a solid shift for real estate investments. Most of our Generation-Y (72 million) and baby Boomers (73 million are resolved to search for and move into mid-sized and big cities. Hence it is high time that you yourself resolve to prepare for the long term benefits through refinancing. So what can refinance do for you?

It Will Lower Your Interest Rate

Refinancing basically transfers your liabilities under a different set of terms and agreements. These are normally change over the course of years and in accordance with the Treasury Bill. You can either compare mortgage rates yourself to see how yours compares to the new rates available under different packages or else consult with a professional agent.

The Obama Administration has already put several programs in effect which include:

1. FHA Streamline Refinance;

2. Veteran Affairs (VA) Loan Refinance;

3. Home Affordable Refinance Program HARP Refinance;

4. USDA Home Loans.

Any program (federal or even private) that lets even a slightly lower interest rate could easily have you saving loads on interest payments. This easily frees up investment that can be channeled to other ends, or perhaps to apply for a shorter term loan!

It Can Shorten Your Loan Term

As you may know from experience, paying down your principal for several years while having made extra payments actually reduces the balance faster. Simply check out what your loan payments would be if you decide to refinance it into a longer 10 to 15 year plan, and select the one that best suits your plan.

The good news is that the current condition of your balance of your loan and the interest rate, your payments may remain the same or a tad bit higher. This means you can save thousands in interest by simply refinancing and as a result become mortgage free faster!

It Lets You Combine Your Current Mortgage Loans

Refinancing allows you to combine different loan packages under a single loan. The upside of this is that your overall interest rate drops significantly! This also means that if you have any home-equity or line credit that demands a repayment on the principal after a set time, then you can have that clause literally removed under the new contract, but this will require some form of legal expertise in the form of either a good agent or lawyer.

Initial Preparation

Arm yourself with a thorough knowledge of your current mortgage balance, rate and the how much of your term is left. Not only will this information aid you in making a calculated decision to refinance, but also help you assigning the proper risk metrics.

Start by reviewing all of your finances. Take out your budget, your investment portfolio, and especially all of your debts including your home-equity, mortgage loans, and nay line-credit.

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