When contemplating the possibility of refinancing your mortgage loan it is important to make sure any new loan you take on will only benefit you in a positive way. Since there are so many different types of loans available now it is important to choose the correct one that best fits your particular situation.  
There are a few different types of loans available that you will find, adjustable rate, fixed rate, interest only loans and although rare sometimes balloon loans can also be found. A fixed rate loan is recommended more often than not because it is more secure. When you get a fixed rate loan there is no possibility of an increase in your monthly payments. However there is also the option of an adjustable rate loan although it is a bit more risky. If you decide to go with an adjustable rate loan you are at risk of an increase in your monthly payment without warning.

There are also interest only loans available when refinancing your mortgage loan. What an interest only loan is a loan which you make monthly payments but only the interest is paid. Although the amount being paid is sometimes low it is only going towards the interest and the principle of the loan is not being touched at all. Your payments will go towards the interest only for a time period that is decided on before hand.

There are also loans available that are known as balloon loans. These balloon loans are available but are rarely offered. What this type of loan does is set a low monthly payment for a set number of years but when that time expires the payments balloon into much larger payments. The new mortgage payments will also need to be paid in a lump sum.

Refinancing your home loan can be stressful and confusing but with some research and patience you can find a loan that best fits your situation. Look at all the different types of loans that are available for you and pick the best one for you, it could be the decision that saves you from losing your home to foreclosure.
-M Petrone

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