Are you apprehensive about refinancing for a home mortgage because you fear you will reset the clock on your loan? Unfortunately, many homeowners fail to take advantage of the record-low home mortgage refinance interest rates simply because they are misinformed. The best way to know about a home mortgage refinance program is to talk to the lender and clarify your questions. Meanwhile, there are several myths about this lending facility you shouldn't believe:

Myth 1: Refinancing Will Reset the Original Loan Clock 

Many people are fearful of starting the loan processing and payment all over. For example, if you have already paid off about 10-years' worth of a 30-year loan, it is hard to go back on these 10 years.

But today, mortgage lenders do not require you to start all over with mortgage refinance. Instead, they are flexible in letting you continue with your payments according to the original schedule. For example, if you had paid off 10 years, they will let you pay off the new loan in the remaining 20 years. You also get the advantage of lower interest rates on the new loan.

Myth 2: Refinancing Lowers Your Home Equity 

Home equity is the difference between your home's market value and the unpaid mortgage. For example, if your mortgage was $500K and you have paid off $$200K and the present market value is $800K, then your home equity would be the $200K you've paid off plus the $300K that it has gained in value, which would make it $500K. 

Home mortgage refinancing allows you to take a cash loan on your home equity. For example, you can borrow $100K guaranteed by the $500K equity. It does not lower your home equity because your home's market value rises each year.  

Myth 3: You Can't Refinance Within a Year 

Do you fear your refinancing application will be rejected because a year has not elapsed since the last refinancing? These days, it is standard practice for lenders to accept a new application six months after the last one. You can apply for a mortgage refinance if you feel your credit rating has improved enough to guarantee you better terms.

Myth 4: Refinancing Costs Are Non-Negotiable 

It is true you can't negotiate charges set by authorities that regulate the lender, for example, state transfer taxes. But you can negotiate the charges and fees that the bank sets, such as loan origination fees. The lender might be willing to waive some costs if you have a good credit profile for a home mortgage refinance. 

Are you looking to expand your real estate portfolio affordably? Talk to your real estate agent about a home mortgage refinance.