Mortgage rates have been holding steady at low levels for the past few years. Now is a perfect time to refinance and pay less on interest, payments or even use the equity you've built in your home to consolidate debt or cash out.
So what are the top three reasons homeowners refinance besides taking advantage of the great market we’re in?
Reason 1: Lower Your Monthly Payment
The most common reason homeowners refinance is the ability to reduce their monthly mortgage payment. There are two ways of achieving this goal.
The first option is by lowering your mortgage interest rate, which reduces your monthly payment. Not only will you save monthly, but there could be an even bigger long-term benefit on the total amount of interest you would have paid over time.
Your second option is to refinance into a longer term loan, which would lower your monthly mortgage payment, giving you more flexibility to spend your money elsewhere.
As long as you're saving money monthly or dropping your rate to save money on the total interest you would have paid; it's a win-win.
Remember, when you extend your mortgage term to drop your monthly payment, you can always apply more money towards your principle to drop down the mortgage balance and shorten your term - You're in full control.
Reason 2: Changing to a shorter term
You might be in a good position financially where you could afford to pay a higher monthly mortgage payment over a shorter term.
Changing to a shorter term would save you money on the interest paid over the original term because you would pay down more of the mortgage balance sooner, shortening the time you pay off the loan.
Your monthly payments might go up, but the amount of interest you pay on the total mortgage drops drastically. Let's not forget that the interest rates for lower terms are usually lower compared to the 30-year options.
Reason 3: Using Your Equity
Home values across the country have been rising in the past few years, helping homeowners who are looking to pull cash out from their equity to do things like home improvements, consolidate higher interest credit card debt, or other investments. Whatever the reason, the equity is there for you to use when you want and how you want.
Maybe you’re looking to put in a new kitchen or even add-on an extension. By refinancing and taking cash out for remodeling, you can potentially increase your property value, which again, is a win-win.
If you would like to refinance to a lower rate, lower monthly payment or cash out by tapping into your equity, you’ve come to the right place. Please feel free to apply online to start your home loan journey or call 866-955-5655 to speak with a Home Loan Advisor today!