What is a Refinance loan?
Refinancing means removing the current mortgage on a property in order to take it over with a new loan, possibly at a different interest rate and for the same or different term. You can benefit from lower interest rates, reduce or increase the term of the loan, lower monthly payments or obtain part of the equity generated for the property to invest in new businesses.
9 reasons why you should Refinance your current Mortgage
Lower Interest Rate
If you decide to lower the interest rate, as a consequence, your mortgage monthly payments will be lower too, your monthly savings will increase and will be reduced the interest paid over the life of the loan.
Because your Credit Score is much better now
If your Credit Score has improved since when you bought your house, you probably will get better interest rate today, that means lower monthly payments.
Switch to the Best Mortgage Loan
An example is switching from FHA program to Conventional, perhaps your only option when you purchased your home was to accept a mortgage with not desired terms, you have an excellent Credit Score and your house had accumulated equity, now is your Big Time, and you can refinance with the best mortgage program in the market.
Reduce or Increase the period of the Mortgage
If you reduce the time of your mortgage this will help you lower the total costs of the loan in its entire life, it means that, the less time of the loan, less mortgage interest you will be paid.
One of the main reasons to increase the period of the mortgage is to lower the monthly payment, this option is widely used by investors because they receive higher monthly profits.
Switch to Fixed Rate
If you have an ARM loan with variable interest rate, switching to a fixed rate and lowering your interest, and reducing your monthly payment for the rest of your loan.
If your house had adquired a lot of equity and now you are thinking to do some home improvements, a Refinance Loan Cash-out will be the best option for you.
Remove a Person from the property deed
Perhaps you bought your property using a family member co-signer, or a friend, or just you got divorced and you want to remover other person from title, then Refinancing your mortgage will be the right option for you.
Remove Mortgage Insurance payment
If your current mortgage has Mortgage Insurance payment, and your property has a lot of equity accumulated, so Refinancing your current mortgage will help you to remove those monthly Mortgage Insurance payment.
This is the classic reason for Refinance your primary residence mortgage, merging all debts into only one payment. Also benefiting from low interest rates for home mortgages, which are the lowest in the market compared to car, personal or credit card loans.