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to buy a home, how should i decide whether to go 4 refinancing,equity or mortgage which one is best

I am in the process of buying a home how should i decide whether to go for refinancing, mortgage or equity. what are their pros&cons. i have read in the sites about the information  but stil i need some expert guidance to move further to enable me to decide after doing a proper research. 
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December 26 2008 - Charlotte
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Answers (1)

We need to talk. You are asking a good question, but this is a very long explanation. Here's the basics:


1. Mortgage: If you are buying a house you will go to a bank, and they will lend you money. They will want you to sign for the money saying you will pay them back. This payment agreement is the "Mortgage". So to answer your question simply, You will need a mortgage.


2. Refinancing: If you ALREADY had purchased a home, by ALREADY getting a Mortgage from the Bank... then you can "Refinance" the Mortgage. Refinance means you will talk to the Bank about changing your Mortgage you ALREADY have. Or writing a new Mortgage with new payment plans. Sometimes if your home you ALREADY have is worth more than when you originally bought it, the Bank may allow you to borrow even more money when you Refinance. But UNLESS you ALREADY have a Mortgage, you cannot refinance.


3. Equity: This is a type of Refinance. So if you do not already have a Mortgage, or own your property/home completely-- then you cannot get an Equity Line of Credit. This is also sometimes called a Second Mortgage. Some banks allow you to take out TWO MORTGAGES, meaning you will have TWO PAYMENTS on the house. This is usually because the house has gone up in value over time. So UNLESS you already have a MORTGAGE, or you ALREADY OWN your home completely-- you cannot get an equity line of credit.


I can more fully explain any of these types of financing if you would like, simply click on my profile or post another question.

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January 07 2009
 
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