Should You Refinance Your Home?
Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many reasons why homeowners refinance: the opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a home's equity in order to finance a large purchase; and the desire to consolidate debt.
The right time to refinance your mortgage is when you have a clear refinancing goal in mind. What is your refinancing goal? Maybe you’re looking to pay off your home sooner? Maybe you’re looking to cash out on equity? Whatever your reasons for considering a mortgage refinance, the experienced home loan experts of XXXX can help you find the refinancing option that is right for you.
Here’s when refinancing makes sense:
Lower Your Mortgage Payment - Refinance your home loan to lower your monthly mortgage payment.
Lower Your Interest Rate - One of the best reasons to refinance is to lower the interest rate on your existing loan.
Pay Off Your Mortgage Faster - Refinance to pay off your mortgage loan more quickly. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9.0% to 5.5% can let you cut the term in half to 15 years, with only a slight change in the monthly payment from $804.62 to $817.08.
Consolidate Your Debt - Consolidate other debt under your mortgage loan to reduce your interest rates and monthly expenses.
Get Cash Out - Get cash out of the equity in your home for major expenses like a new air conditioner.
Convert to a Fixed Rate - Refinance from an Adjustable Rate Mortgage to a Fixed Rate Mortgage so that you will have predictable monthly mortgage payments that will not increase with rising interest rates.
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting debt under control.