Refinancing gives homeowners the opportunity to change their mortgages to better meet their financial goals, which usually translates into saving money. Today’s interest rates are at all-time lows, allowing those who originally purchased when rates were high to refinance at a lower rate, saving thousands over the lifetime of the loan and freeing money immediately in their monthly budgets. Homeowners who have taken steps to improve their credit since receiving their first home loan can also refinance at a better rate and save money. Also, when the equity in the home climbs above 20 percent of its value through mortgage pay down efforts and property value increases, homeowners who are paying private mortgage insurance can refinance to eliminate this monthly fee.
Saving money in the short term is just one potential benefit of refinancing. Some homeowners choose to refinance to save money over the life of the loan. Changing to a shorter term, such as refinancing from a 30-year mortgage to a 15-year mortgage, saves thousands of dollars in interest over the life of a loan, even though the monthly payment increases slightly. Moving from an adjustable rate mortgage to a fixed rate mortgage also saves money in the long term by allowing the homeowner to lock in today’s record low rates. When rates begin to climb again, a fixed rate mortgage provides financial security and peace of mind that comes from knowing the interest rate will never change.
Whether you are dealing with high interest rates, private mortgage insurance payments or the uncertainty that comes from an adjustable rate mortgage, refinancing provides a solution. You can choose a mortgage that better fits your current financial state and future financial goals, whether you need to free up money for your immediate needs or wish to pay your home off faster to save in the long term. Today’s low rates will not last forever, so contact one of our home loan specialists today to lock in the best possible rate for your new mortgage.