Refinancing can help you realize significant savings over the life of your loan. When you refinance, you obtain a new mortgage that can reduce interest rates or provide other financial benefits.
Benefits of Refinancing
Are you looking to save money on your mortgage? Refinancing can help you:
- Lock in lower rates—A lower interest rate can save you hundreds of dollars on your mortgage each year.
- Pay off your mortgage faster—When you reduce the term of your loan, you save.
- Get cash from your home—When your home has accrued equity, you can cash out a portion of that equity to pay for home renovations or large purchases.
- Avoid balloon payments—Adjustable rate mortgages and balloon programs can hit you hard after the initial low interest rate period. Many homeowners choose to switch to a fixed rate mortgage to avoid costly payments.
- Cancel PMI—If you purchased your home with no or little money down, you probably pay private mortgage insurance each month. Refinancing at the right time can eliminate those PMI payments.
Is Refinancing Right for You?
Refinancing offers many benefits, but it also carries risk. Keep these factors in mind as you consider whether refinancing is the best choice for you:
- Closing costs—Before you refinance, take a look at the closing costs associated with the loan and evaluate how long it will take to break even. In some cases, we can offer options to refinance with no closing costs.
- Moving—If you plan to move soon, you will likely not break even on closing costs before you sell your home.
- Poor credit—If your credit is less than stellar, you may not be able to get a better rate.
- Longer pay off period—In some cases, a lower rate comes with a longer pay off period, which means you won’t be saving any money. The best scenario is to get a lower rate while also reducing the term of your loan.
Ready to know more? Call us today to talk about your refinancing options and discover how to take the next step.