Reasons to Refinance
Reduce Your Monthly Mortgage Payment. The slightest percentage drop can have a large effect when calculated over 15 or 30 years, and so you definitely should consider refinancing when you’re able to lock in a lower interest rate. Switching from a 15 to 30-year term will immediately reduce your mortgage payment. Conversely, if you are looking to save money in the long run, you can save thousands of dollars by refinancing from a 30-year to a 15-year mortgage. As most traditional mortgages include principal and interest payments, still yet another way to reduce your monthly mortgage payment is to switch to a program with interest only payments. Refinancing your existing mortgage is a surefire way to lower monthly payments immediately. Refinancing is Ideal for Putting Money in Your Pocket.Refinancing is perfect for cashing in on your home's equity. For the most part, homeowners would have to sell their homes in order to access the equity they have built. However, a cash-out refinancing makes it possible to tap into your home's equity, while remaining in your home.Get Cash Quickly and Safely. If you have equity, you can use the cash to finance. You might pay for new home improvements, take a vacation, pay off credit card debts (since credit card debt interest is compounded whereas mortgage interest is relatively simple and tax deductible, this is an especially attractive option), or pay for your child’s education.Switch your mortgage program to fit your financial situation better. An adjustable rate mortgage (ARM) is a particularly attractive option for homeowners who do not plan to stay in their home for an extended time period. An ARM could lower your monthly payment dramatically when compared to a 30-year fixed-rate mortgage. On the other hand, if you do plan on staying longer than a 3-5 year period in your home, you might want to switch to a 15, 20, or 30-year fixed-rate home loan. Doing so will provide stability over time, and protect you against market fluctuations. Fix program can help you save the most in cost in the life of the loan.