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Home Refinancing Options
Completing a Mortgage Refinance can be a smart way to improve your financial situation. Depending on your circumstances you may want to undergo mortgage refinancing for any of the following reasons:
Logic | Refinance To Lower Your Mortgage Rate & Payment
Even a small reduction in your mortgage rate can have a significant impact in the long-run. Refinancing to lower your monthly payment frees up cash flow, so you can manage your money more effectively. Furthermore, if you plan to stay in your home for a long time, you may want to mortgage refinance and consider buying down your rate to reduce your monthly payment. If you have equity in your home, home loan refinancing could enable you to lower your mortgage payment significantly.
Simplicity | Consolidate Outstanding Secured & Unsecured Debt
If you have debt outside of your mortgage and you have equity in your home, it’s time to refinance your home loan. You are likely paying a much higher interest rate on credit cards and auto loans, and by mortgage refinancing you could roll all of these debts into one tax deductible loan. Credit card interest rates can be as high as 25%. Refinancing your home to pay off and consolidate debt under one low mortgage rate is a smart maneuver. A well structured home refinance could save you a great deal of money.
Performance | Access Available Equity Secured by Your Home
Completing a mortgage refinance can get you cash out of your home for a variety of purposes, including education expenses, vacations, other investments, home improvements and more. Mortgage refinancing is a much better option than using credit cards or personal loans.
Speed | Accelerate the Speed of Your Loan Payoff
A mortgage refinance can be structured to pay off your home quicker. Instead of refinancing into a typical 30 year mortgage, you could get a 20, 15, or even 10 year fixed so you pay it off quicker. Also, many home refinance loans give you the option of paying more on your principal every month so you can pay down your home loan fast as well. Refinancing allows you to move into any type of mortgage loan.
Stability | Migrate Away from an ARM into a Fixed Product
Adjustable Rate Mortgages (ARMs) are great when mortgage rates are low. However, as rates increase that ARM quickly becomes a significant burden. That’s when it is time to consider mortgage refinancing into a fixed rate loan. Especially if you plan on staying in your home for a few years, a refinancing your mortgage makes a great deal of sense. Refinancing into a stable fixed rate may give you peace of mind. More on fixed rate mortgages.
Minimalism | Eliminate Private Mortgage Insurance (PMI)
If you were unable to make a down payment of at least 20% when you first obtained your mortgage loan, you may be paying PMI. If your house has appreciated and/or you have paid down your existing mortgage, you may be able to mortgage refinance your home to eliminate your monthly PMI payment. Along with possibly lowering your rate, a mortgage refinance could reduce your monthly mortgage payment considerably.