Refinance Your Mortgage

Common reasons people decide to refinance:

Lower Your Payment – You can refinance your loan so that it has a lower monthly payment. And that extra cash savings can go toward your other financial goals, such as saving for a car, putting money into a retirement account or whatever other objectives you may have.

Lower Your Rate – Your interest payments make up a large portion of your monthly payment, especially in the first ten years. The higher your interest rate, the larger your monthly payment and the more you’ll pay over the life of the loan. When you refinance your mortgage to a lower interest rate, you’ll pay less in interest. When rates drop below your current rate, it may be a great time for you to swoop in and get a lower one. It’s always good to keep track of interest rates so you know when you can save the most money!

Change Your Loan Type – Sometimes we need a change of pace in life. If you’re interested in getting out of your fixed-rate loan, you may be the perfect candidate for an adjustable rate mortgage (ARM), which provides a lower interest rate than a fixed loan. After a period of time, though, this rate adjusts based on market conditions. Converting between adjustable and fixed can be a great way for you to save money while taking advantage of the lower rate during the fixed period. On the other hand, switching to a fixed rate gives you certainty.

Get Rid of Mortgage Insurance – If you have an increase in property value based on a new appraisal, you might refinance in order to remove private mortgage insurance (PMI). Meanwhile, once you reach 20% equity, converting from an FHA loan to a conventional one could help you ditch FHA mortgage insurance payments.

Cash for Repairs and Home Improvements – If the hot water heater went after years of service and the roof needs replacing soon, taking cash out of your home can make more sense than putting these bills on a credit card with a much higher interest rate.

Give Your Savings a Boost – Things like a child going to college or retirement age can sometimes sneak up on us faster than we know. If you find yourself behind the eight ball from a savings standpoint, a cash-out refinance can be a good low-interest way to give your accounts a much-needed infusion of green.

Consolidate Debt – If you have additional debt that has a high interest rate and you have enough equity in your home, you could consolidate that debt into your home loan and pay interest at a much lower rate.

Knowing what you’re trying to accomplish with a mortgage refinance will help you understand if it’s the right option for you.