What is refinancing?
When you refinance, you get a new mortgage to pay off your existing mortgage. Refinancing works just like getting a mortgage to buy a house. You’re simply financing an existing loan a second time to gain new terms.
There are many potential benefits to refinancing your current mortgage.
Here are just a few examples
- Lower Your monthly payment
- Lower Your Interest Rate
- Reduce your loan Term
- Take cash out to pay off Higher Interest debt and reduce your total monthly bills
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When should you refinance a mortgage?
Homeowners refinanced mortgage debt at a record level last year. Breaking $2.6 trillion due to historic low mortgage rates according to Freddie Mac. Rates have continued to hover exceptionally low into 2022. Here are some signs than refinancing might be suitable move for you.
Finding a lower rate by at least 0.5%
The typical homeowner lowered their rates 1.2% by refinancing, having great to excellent credit helps but its not impossible for people with improving credit.
Pay off mortgage faster
Homeowners can refinance into a shorter term and potentially save thousands by combining a low interest rate with a shorter loan life span. Borrowers should only consider this if they feel comfortable with making higher amount monthly payments.
Finding a loan with more suitable terms
If a borrower originally took out an FHA loan due to not having excellent credit, but has since increased their score, refinancing into a conventional could eliminate FHA mortgage insurance premiums. Borrowers might also be seeking to switch from an adjustable-rate mortgage (ARM loan) to a fixed rate, or vice versa.
Eliminate Your Mortgage Insurance
Even if you have not Reached 20% Equity in your home, we may be able to help you remove the mortgage insurance. Call Us today to Discuss Your Specific Loan Terms.
Remove Your Escrows from Your Monthly Payment
Removing your Escrow Payments from you monthly payment can be an easy way to reduce your monthly obligation. This option is not available on all loan types and may not be a good fit for everyone. Discuss this option with your loan officer and see if I’s right for you!
Cash out some of your equity
Borrowers can cash out a portion of their home equity. This can be used to pay off or consolidate high interest debt, many times this supplies the homeowners with funds for home repairs, or remolding.