3 Important Reasons To Refinance Your Mortgage
When it comes to refinancing your mortgage, there are a few situations where it makes sense to go through the refinancing process. Refinancing your home is a lot like applying for a loan in the first place, and it involves a lot of paperwork and income verification. You don't just want to refinance your home for any reason; you want to refinance your home for the right reason.
Reason #1: Snag a Lower Interest Rate
If you refinanced your home under a fixed-rate mortgage, that means the interest rate at the time you set up your mortgage is the interest rate you will carry on your loan for the life of your loan.
If interest rates have fallen significantly since you purchased your home, refinancing your home makes a lot of sense. By refinancing your home, you can take advantage of a lower interest rate. Taking advantage of a lower interest rate will allow you to save a lot of money on your mortgage.
By reducing your interest rate by even a quarter of a percentage point, you can save thousands of dollars over the lifetime of your loan, essentially decreasing the amount of money you have to pay for your home. If interest rates have decreased, this can really help you save money.
Reason #2: Shorten the Length of Your Loan
If you want to pay your loan off in a shorter period, you can refinance your home into a shorter loan period.
Your loan payments will go up, but once again, you will be charged less interest on your loan, which should save you money as you work to pay off your home. If you refinance your home into a shorter mortgage term with a lower interest rate, you can cut tens of thousands of dollars of the overall life of your loan.
Reason #3: Enjoy Better Terms with a Better Credit Score
Finally, if your credit score has improved greatly since you purchased your home, you are going to want to consider refinancing. When you refinance your home with a better credit score, you can reduce your interest rate and your monthly payments even if you keep the same loan-term length.
There are a few reasons to refinance your home. Refinancing your home can allow you to take advantage of a lower interest rate, saving your money. You can refinance your home to enjoy better loan terms with an improved credit score. You can refinance your home to shorten the length of your loan. You should only refinance your home if it offers you financial benefits.
To learn more, contact a resource like Liberty Escrow Inc.