With interest rates hovering around historic lows, there’s no better time than now to consider refinancing your loan. It’s not the right choice for everyone, but there’s a chance it could save you money. And by saving, that means thousands upon thousands of dollars.
If you’re on the fence about refinancing your mortgage, here are five reasons why you may want to change your mind:
1. A Lower Rate and Monthly Payment
Start by reviewing your current interest rate and monthly payment. From there, receive three to five refinance quotes to better determine what’s available. You can then determine if you qualify for a lower rate, and if so, how much it will save you every month.
2. A Shorter Term
It’s difficult to think about the fact that you may not pay off your mortgage for another 20+ years. If you want to do something about this, refinancing your loan is an excellent option. With this, you can lower your term while possibly keeping your monthly payment in the same general range.
For example, if you have 25 years left on a 30-year mortgage, you could refinance to a 15 or 20-year loan. Even if your monthly payment increases slightly, you’ll save thousands of dollars over the long run.
3. A Fixed Interest Rate
Do you currently have a variable interest rate? Are you concerned that it’ll increase in the future, which will, in turn, lead to a monthly payment you can’t afford?
By refinancing to a fixed-rate loan, this is no longer a concern. The rate you secure is the rate attached to your loan until you pay it off in full. This makes it easier to manage your monthly payment and budget.
4. Access to Equity in Your Home
A cash-out refinance allows you to access the equity in your home. You can then use this money for purchases such as home improvement projects, medical bills, traveling, and more.
5. Eliminate Private Mortgage Insurance
If you currently pay private mortgage insurance, it’s because you didn’t put at least 20 percent down when you purchased your home. By refinancing, you may be able to eliminate private mortgage insurance, which will lower your monthly payment.
Even if you don’t think refinancing your mortgage is a good idea, it never hurts to look into it. You may soon find that you can take advantage of the benefits above, among many others. Contact several lenders to learn more about your options and how to best proceed.