Refinancing is something that most people will do at some point in their home ownership years.  The reasons are many; sometimes it’s to get a better rate, sometimes to combine a first and second mortgage.  Still others will refinance to take money out from the equity on the home and pay bills or do renovations.  Whatever the reason, equity plays a major role. What Is Equity? Simply put, equity is the difference between the value of your home and what you owe on it.  Although the term is very common, the truth is that not every homeowner has equity, and in fact some may be in the opposite position. Equity increases over time when, as a general rule, the value of a home increases while at the same time the mortgage loans are being paid down.  In difficult economic times, equity may build slowly or even be lost. What Does Equity Have To Do With Refinancing? While it is possible to refinance a home in which there is little to no equity, it is more difficult.  You can refinance for a better rate, but you won’t be able to take any money out on the loan. When the house is […]
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