If you currently own your home, refinancing your mortgage might be a beneficial thing to do for many reasons. Refinancing can give you lots of benefits that can be financially rewarding. If you've been on the fence about whether or not refinancing will work for you, here are some of the various reasons it can help you with monthly payments, interest rates, and even renovations.
Better Rates
If you currently have an adjustable rate mortgage or a balloon mortgage, the thought of higher rates looms large. By refinancing your mortgage over to a non-adjustable loan type, you won't have to worry about rate increases causing your payments to go up. This will provide you with a sense of security and stability and can also reduce your payments if you can lock in a lower rate than you're currently paying. Many homeowners choose to refinance if they have an interest-only mortgage that is getting ready to approach the end of its interest-based payment period. This will prevent you from paying more now that the loan is getting ready to transfer to the interest plus principal payment structure.
Extra Cash
If you've been dreaming about a fabulous new kitchen remodel but haven't had the funds, you can use the equity built up in your home to take out a cash refinance. The lender will determine your home's current worth and offer you a total loan based on the equity you've built up. This money can be used for anything from vacations to home improvements. Just keep in mind that these types of refinances will eat into the equity you've built up and you will only be able to gain it back as the loan balance goes down. Before you choose this type of refinance loan, make sure you can handle the extra payments on top of your current mortgage bill.
Shorter Loan Terms
Another good reason to refinance your home is to get better, shorter loan terms. If you currently have a thirty-year mortgage but want to convert it to a fifteen or even ten-year long one, you may be able to get a shorter term mortgage. This will allow you to pay off your home much more quickly. If you shorten the lifespan of your mortgage, be prepared to pay a higher monthly payment since the total amount owed will be divided into larger payments. This is a good option for people who have had a significant increase in their income and want to enjoy living in a home that's fully paid off much more quickly.
For more information and options, talk with professional home refinancing services.
Share6 April 2016
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