5 Reasons for Refinancing Your Mortgage

There are a number of reasons why you may wish to refinance your mortgage. For example, you may be looking to save on interest rate or manage your money better. While refinancing your home can be quite a hassle, the end results are usually worth the effort. By refinancing, you may end up saving on your monthly payment and not have to pay private mortgage insurance.

If you are up to the task, you can secure a no-cost refinance mortgage. You can refinance your mortgage to lower the term of your financing and enjoy low interest rates. Moreover, when done properly, refinancing can reduce the number of years over which you will have to pay your mortgage.

Here are five reasons why you may want to refinance your home.

i) Reduce the term of the loan
Refinancing can be a great option if you have a 30-year mortgage. With the currently low interest rates in the market, you can find that a 15-year mortgage costs lower or nearly the same as the 30-year one you may be paying.

Use a mortgage calculator to find out your new estimate payment. If the payment is lower than what you are currently paying, get in touch with a mortgage advisor.

ii) Take advantage of lower interest rates
Today, the interest rates for 30-year mortgages are quite low, hovering at about 3 percent. 15-year mortgages are offered at even lower rates. If you took a mortgage when interest rates were high, you can go for refinancing. You can end up saving tens of thousands of dollars in your total payments by applying for refinance mortgage.

iii) Reduce your payment
When you refinance your mortgage at a lower interest, you can end up saving thousands on your total payment. You can use the savings realized from refinancing your mortgage to clear other debts, save or invest in different projects. While refinancing your loan to a lower rate can increase your term, it may be feasible in your situation. Contact us for further details.

iv) Get a fixed-rate mortgage
You can switch an adjustable-rate mortgage to a fixed rate one through refinancing. When interest rates are low, it is a perfect time to take refinance mortgage. However, the rates may not stay low forever. You can protect yourself from future higher interest rates by locking into a low, fixed rate mortgage. Moreover, it will be easier to budget and plan for a fixed payment.

v) Cash out home equity
You can also refinance your mortgage to get cash from your home equity. This is a tempting proposition but can be a prudent financial move in some cases. For example, it can be a great move to cash out on your home equity to start a business or invest in a profitable project. The decision on whether or not to cash out your home equity will depend on what you wish to achieve with the money and whether you can responsibly pay back your mortgage in light of the new financial changes.

The above are some of the reasons why it may make sense to go for refinance mortgage.