If you're a homeowner, you may have gotten letters from your mortgage lender about refinancing your home. There are some benefits to refinancing, which is why you may be considering it. Here are 3 reasons you may want to refinance your home.
You Can Get A Better Rate
If you originally got a mortgage with an adjustable rate, you may be dreading the day when higher rates are coming. If you refinance your mortgage to one that has a rate that is fixed, you'll be able to lock in your payment price to ensure that it doesn't increase. It can give you the stability you need to help plan your finances. Many people that have interest-only loans will also find this reason appealing.
If you have a fixed loan, but got it at a time when rates were very high, you can take advantage of the lower rates by refinancing. You'll start over on your payments towards a 30-year loan, but you could potentially have lower payments due to the better rate.
You Can Get The Extra Cash That You Need
Do you plan on completely remodeling your kitchen but just don't have the money on hand? You could use all the equity that you've built up over the years of mortgage payments to refinance. Your home's value will be evaluated, and you will be given the money as if it were a loan. You can use it for anything you want, to put towards a small business, to do a big renovation, or even to pay for a big vacation.
This kind of loan will end up costing you more money over the life of the loan than if you kept your mortgage the same, but you'll be able to have cash right away that you wouldn't normally have.
You Can Get A Shorter Mortgage
Many homeowners start off with a 30-year mortgage, only to have their income drastically change for the better. This could be from getting married and now having two incomes in your household or a big promotion that has given you a bigger salary as a result. You may want to change your loan from a 30-year mortgage to a 15-year mortgage. It will let you pay for your home faster and pay less in interest.
For more information about refinancing your home, speak to a mortgage lender in your area, such as Financial One Mortgage.Share