If you're not happy with your mortgage loan, there is no reason to feel trapped! Refinancing allows borrowers to take out a new loan and pay off the old one. The result? A lower interest rate, more favorable terms or even the opportunity to walk away with some cash in your pocket! Take a look at these 5 reasons to refinance your mortgage:
#1 Mortgage Rates Have Gone Down
The primary reason many homeowners refinance their mortgage is to lower their interest rate. It's why we refinance just about any loan, whether it's a mortgage, student loan, or even credit card debt (think 0% balance transfer cards). You could save thousands of dollars a year!
Evaluate whether to refinance a mortgage based on today’s rates, not a prediction of future rates. Right now, is the perfect time, too! Keep in mind that a lower payment is also a function of the term of the new loan. For instance, if you have 20 years left on your mortgage and refinance back to a 30-year mortgage, the extended term will lower your monthly payment even at the same interest rate.
Consult with a EHL Loan Officer to see if refinancing is right for you. We’ll answer all your questions and concerns.
#2 Your Credit Score Improved
Even if rates haven't gone down, you still may be able to qualify for a lower rate if your credit score has improved.
#3 When You Need to Lower Your Payment
Families on tight budgets may find refinancing provides relief from high payments. In many cases, this is achieved by extending the term of the loan. Borrowers need to carefully weigh whether the monthly savings are worth paying on a debt for years longer than originally planned.
#4 To Convert an ARM to a Fixed Rate Mortgage
Refinancing can make sense as a way to convert an Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage. This is particularly true if you believe interest rates may be on the rise.
#5 Your Home Has Increased in Value
If the value of your home has gone up, you might also get some benefit from refinancing, especially if you have other high-interest debt to pay off. When you get a cash-out refi, you take out a new mortgage that’s larger than what you previously owed, and you receive the difference in cash. A cash-out refinance is an alternative to a home equity loan.
For borrowers, refinancing can save money, reduce monthly payments and provide a source of cash. Don’t wait! Reach out today to see if you should refinance your home mortgage and to discuss current rates.