What Will Mortgage Refinancing Mean For You
More and more homeowners are turning to mortgage refinancing in order to meet their financial goals. Refinancing is an important decision to make, however, so it's important to know exactly how it will impact your financial situation. Here's what you can expect from mortgage refinancing.
Lower Interest Rate
Mortgage refinancing allows you to take advantage of a lower interest rate. A lower interest rate means lower monthly mortgage payments, which means you'll pay less for your home over time than you would with your original mortgage. Lower monthly payments also translate to more cash in your pocket each month, which you can put toward home improvements that will increase your home's market value. For homeowners on a tight budget, lower mortgage payments can mean the difference between staying in their home longer or selling it at a loss.
If you have an adjustable-rate mortgage (ARM), you'll pay lower rates for a fixed period -- say, 5 years or 10 years -- after which your interest rate will go up to reflect the benchmark index rate. Adjustable-rate mortgages make sense for homeowners who only plan to stay in their home for a few years. If you plan on keeping your home for the long-term, however, you may wish to take advantage of a fixed-rate mortgage. Mortgage refinancing replaces your original adjustable-rate mortgage with a fixed-rate home loan, which will result in more predictable monthly payments over a longer term.
Access to the Equity in Your Home
There are many reasons why you may want to access some of the equity that you've built up in your home over the years. Mortgage refinancing allows you to convert up to 80 percent of your equity into cash, which you can then use to pay your child's school tuition, start a business, or take a once-in-a-lifetime vacation. This mortgage refinancing option is referred to as a cash-out refinance. If you need to liquidate some of the equity you've accumulated in your property, but aren't ready to sell, this type of mortgage refinancing may be the ideal solution for you.
Refinancing your mortgage can help you take advantage of lower interest rates and better mortgage terms, but it isn't the right choice for everyone. Our lending specialists can help you assess your current financial situation and advise you as to whether mortgage financing is best for you. Contact us today to talk about mortgage refinancing.Request Mortgage Info