Refinancing a mortgage isn't for everyone. Not everyone will qualify to refinance their mortgage, or refinancing may not put you in a better place financially. Just because your neighbor just refinanced doesn't mean it's the best thing for you. Refinancing should be done for a number of different reasons, but the bottom line is that refinancing should be done to put you in a better place financially. Whether that means you want a lower mortgage interest rate, a lower payment, or some extra money in your pocket from the equity you have in your home, if you are refinancing, it should benefit you. Read on for a few reasons why you should refinance your home mortgage.
1. Your Interest Rate Is Much Higher
If your mortgage interest rate is much higher than the national average for mortgages, it may be in your best interest to refinance. If you don't have a very good interest rate, or if you have a flexible rate that is too high for you to afford, it may be best to refinance for a lower, fixed rate. You should only refinance if the rate will be low enough to save you money in the long run. It often isn't worth it if the costs of refinancing exceed the cost savings of the rate decrease.
2. You Want A 15-Year Mortgage
If you have a 30-year mortgage and you can afford to spend a bit more on your monthly payment, you can refinance to a 15-year mortgage to pay your mortgage off much faster and without as much interest being paid out. A 15-year mortgage may have a much lower interest rate, and you'll have your home paid off in no time. Overall, it can be a very big cost savings to go with a 15-year mortgage over a 30-year mortgage.
3. You Have A Lot Of Equity
If you have a lot of equity in your home and you have some projects you want to get done around your house, you can refinance and take some money out as a home equity loan to get these projects done. A home equity refinance may cost you a bit more in interest, and your home will have to appraise for the amount you need out of the loan, but this could be a major benefit to you, especially if the projects you are doing add more value to your home.
If you are considering refinancing, be sure you are doing it for the right reasons and that they are a benefit to you financially. Talk to a home refinance company today about mortgage refinancing.Share