As you review your mortgage statement (among other details), you may come to realize that a refinance could work in your favor.
Not everyone can benefit from a mortgage refinance, but it’s something that should at least be on your radar. You may come to find that it benefits you both personally and financially.
If you’re on the fence, here are some of the top reasons to refinance your mortgage.
1. To Lower Your Monthly Payment
Are you finding it difficult to make your monthly mortgage payment? Rather than continue the struggle and risk missing a payment, it may make since to refinance your mortgage.
Even if you have to add more years to your term, it’s better than the month to month stress that you’re carrying.
Tip: ask your lender to run a variety of scenarios to help you understand how much you can save each month.
2. A Lower Interest Rate (APR)
With mortgage rates hovering around all-time lows, there’s never been a better time to consider refinancing your loan.
Compare your current rate against the quotes you receive from lenders. From there, review the available terms and how they play out in regards to your monthly payment.
If you have a high mortgage rate — perhaps because you had poor credit when you purchased your home — refinancing your loan could save you thousands of dollars over the long run.
3. A Shorter Payoff Term
Some people refinancing their mortgage in search of a lower monthly payment. This typically means adding more years to their loan.
However, you may want to refinance for a shorter payoff term.
For instance, if you currently have 25 years left on a 30 year mortgage, you may realize that you’ll be paying it down well into retirement.
But what if you could swap out the remaining 25 years for 10 or 15 years? Would that make you feel better about the future?
Once again, work with your lender to run the numbers for all available scenarios. That’ll help you decide how to best proceed.
There is no shortage of reasons to refinance your mortgage. As you learn more, you’ll begin to understand if it’s the right decision for you.
After you review your situation and have a better idea of what you’re looking for, contact three to five lenders to learn more about the refinancing process, rates, and other related details.
Have you refinanced your mortgage? Are you happy with your decision to do so?