Homeowners put in a lot of time, effort, and money into finally getting the keys to their home. Wyndham Capital Mortgage is committed to making the home owning process as easy as possible long after you’ve moved into your home and have gotten settled, which means educating you on refinancing your mortgage. Here are five advantages in particular of refinancing your home loan.
1. Lower Monthly Payments
One of the main reasons for a person refinancing a mortgage is to net a lower monthly payment. Before refinancing, it’s best to check the most current mortgage rates to make sure they’re lower than your current rate. Even a difference of a single percentage or two can make quite an impact on your financial future. We’d like to point out here that there are fees involved with refinancing, so make sure you’ll be able to recoup the cost of those fees, which you can do simply by occupying your home for as long as possible.
2. Build Faster Equity
It might sound a little crazy, but refinancing to a loan with a shorter term, which comes with larger payments, can be a great idea for some homeowners. The reason for this is going from a 30-year mortgage to a 15-year mortgage allows you to build up equity in your property faster, which also saves you money on interest if the rates are lower.
3. Stabilize Your Loan Payments
If you currently have an adjustable rate mortgage and wish for more predictable loan payments each month, consider refinancing to a fixed-rate mortgage. Depending on how much risk you’re willing to take and your current as well as your future financial situation, going from an adjustable rate mortgage to a fixed rate mortgage could be the perfect switch for you.
4. Take Advantage of Your Improved Credit Score
While you might not like having to pay your mortgage every month, you’re sure to love the way it improves your credit score the more you make on-time payments. With a better credit score, you’re in a better position to refinance your mortgage down to a lower interest rate. The option to choose a cash-out refinance can help your credit score even more. You can use the extra money to pay down your credit cards and other debts faster, or you can simply put the extra money into your savings accounts.
5. Pay Off Your Mortgage Sooner
There’s no better feeling than having more of your income to do with as you see fit. Between mortgage payments, credit cards, car payments and any other financial obligations you might have, having one less monthly payment to worry about makes you feel that much more in full control of your finances. Refinancing to a mortgage with lower terms allows you to pay off your mortgage and become a genuine homeowner that much faster. Again, you’ll have higher monthly payments if you go from a 30-year mortgage to a 15-year mortgage, but that also means you save money in interest over the long haul.
If it’s been awhile since you’ve had your home and mortgage, it could be the perfect time to at least consider refinancing your home loan. Explore your options as well as the pros and cons to reach the best decision for yourself, your finances and your home. Get matched with a Loan Officer today to determine if now is the right time for you to refinance: