| A mortgage is a secured loan in which an asset is | | | | that have unfavorable interest rates. |
| given as a security against the loan to acquire that | | | | At some other times, the market interest rates |
| asset. This is most useful when you want to purchase | | | | themselves may fall. This may also seem very unfair |
| a house. You can take a loan giving the house as | | | | to you. You will be stuck with high interest rates while |
| security and acquire and reside in the same. There are | | | | all others may have pretty favorable terms. The best |
| no issues as long as you make prompt monthly | | | | way to resolve this problem is to refinance your loan. |
| payments. | | | | That is, you should take a new loan with a favourable |
| The problem arises when you make any default on | | | | rate to replace the previous one with a higher rate. |
| the loan. At this time, the lender can take possession | | | | When you decide to refinance, the mortgage refinance |
| of the house, sell the same and realize the loan. Thus, | | | | calculator rate should be determined for the various |
| the risk of the lender is reduced and this should spell as | | | | options available and a wise choice should be made. It |
| lower interest rates for you. But this does not always | | | | is better to make the comparisons in absolute terms |
| happen; many borrowers do not do the groundwork | | | | as this will give you the clear and complete picture. |
| before taking the loan. Thus, they are stuck with ones | | | | |