A mortgage refinance can pay off in many ways, and can achieve many different goals. You can make your monthly mortgage payments more affordable by taking advantage of lower interest rates.
There are four main reasons to refinance:
Lower your interest
If interest rates are currently lower than the rate you received when you received your mortgage, it might be time to consider refinancing. Refinancing your home loan can help you take advantage of lower interest rates, which will lower your monthly payments.
When you refinance you might decide to take some of the money you save on monthly payments and reduce the terms of your loan, or the length of time you take to pay off your house entirely. Make sure you talk to a mortgage expert and consider all your options before refinancing your home.
The interest rate on a home loan is typically much lower than that of other types of debt. It is generally thought that home loans are less risky, and so lenders don’t charge borrowers as much to take out a mortgage.
By refinancing your home, you can take the equity you’ve paid into your home out, and pay down your higher-interest bills. This will consolidate your debt and help you get better control of your budget. Instead of paying down debt on multiple fronts, you will have one monthly payment, your new mortgage, and you won’t be paying as much interest because of the lower interest rate.
Utilizing this strategy may also have tax benefits. Ask us how a home refinance can help you better manage your debt.
Change your mortgage length
Refinancing may allow you to adjust the length of your mortgage to cut back on interest payments. If interest rates are lower than when you initially purchased your home, consider refinancing and taking the money you save on monthly mortgage payments to shorten the length of your mortgage.
By refinancing, you might be able to own your home outright much faster. Talk to a mortgage specialist to see if current rates make now the right time to act.
Get cash out of your home
Refinancing is a great way to get cash out of your home. Life is full of unforeseen events, whether you need cash for an emergency or are looking to reinvest in your home through home improvements, refinancing may be a way to generate funds.
Your home is a source of equity, and refinancing allows you to remove the cash you’ve put into your home and use it for whatever need may arise. Talk to your financial advisor and mortgage expert before refinancing your home, make sure it’s the solution for your needs.
Use our mortgage calculator and find out how much loan you can afford
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