Lower your interest-refinance your home loan! You’ve probably heard it many times before, but what does it mean? Refinancing your mortgage to a lower rate will help to improve your finances because your monthly payment will be lower. Wouldn’t it be great to put extra money towards something else every month? Perhaps you can pay off another bill or put that money in savings.
Other reasons for refinancing:
Accelerate your payoff:
Pay off your mortgage early by refinancing with a shorter term. If you have a 30-year loan then switching to a 15 year loan cuts the extra interest in nearly half. This suits many people who want to pay off and get out from under a mortgage early, or retire. The other benefit is that shorter term mortgages are always lower in rate.
Cash out option:
So, should you take cash out when you refinance? Yes if your LTV and credit scores qualify you for the cash out and you have a good use for the money. If you pay off higher interest debt, consolidate your debt, or want to refinance something that is really expensive like college tuition, remodel, add on to your new home or even go on that dream vacation, the Cash-Out option is a good choice!
Getting Rid of PMI:
You can refinance your mortgage if you have that nagging PMI. If you owe a mortgage with private mortgage insurance tacked on it and if your property has gone up since you got the loan and the mortgage balance has gone down you can most likely look to refinance to get rid of that extra payment. A favored situation occurs when your loan balance is below 80% of the current value of your home.