Mortgage Refinance - What is Best For You?
In our current market, many people are turning to refinancing to solve a variety of issues.
Help obtain a lower interest rate:
Consumers might want to lower their interest rate on the loan, therefore lowering their monthly payments and saving money. This lowering of the monthly liability may help pay down or pay off other debts, invest for the future or simply live a more comfortable lifestyle.
Convert an Adjustable Rate mortgage to a fixed rate mortgage:
While the Fixed rate mortgage might have a slightly higher interest rate, a borrower may decide that rates are low enough that they feel better with the guaranteed that the fixed rate mortgage cannot change. That piece of mind might outweigh the lower interest rate offered by the Adjustable Rate Mortgage.
Consolidate multiple Mortgages into one:
This is a opportunity to take a 2nd mortgage that may have higher payments due to the loan term being shorter, or the loan may be a HELOC with a variable rate mortgage and the borrower may feel more comfortable without the risk of the rate adjusting.
Invest or Payoff other debt (so called Cash-Out:
While rates are very low, a consumer may decide that it is advantageous to remove some equity from their home and “put it work” by investing it in the stock market in hopes of getting a good rate of return. Other might use the cash to pay off high consumer credit card debt with interest rates much higher than the mortgage interest rate.
Reduce Term of the Loan:
Another very common reason is to lower the terms of the loan therefore lowering the amount of money paid over the life of the loan. A person can potentially save many thousands of dollars in loan payments by reducing a loan from 30 yrs, to 25, 20 or even 15 yrs. The monthly payment might actually go up, but the long term savings can be significant.