Here are some great reasons to refinance your mortgage!
Lower your mortgage rate and payment.
This is one of the most common reasons that homeowners refinance their mortgage. If your current interest rate is higher than what is available in the market today, it's probably a good idea to see how much you could save by refinancing. There are no-cost and low-cost options that could save you money with little to no investment.
Reduce your term.
Take advantage of low rates to reduce the term of your mortgage loan. Shorter terms mean lower rates, and the amount of interest you will pay is reduced too.
Convert your adjustable rate into a fixed rate.
Adjustable rate mortgage (ARM) loans are a great way to ease into your payments, especially if you are a first-time buyer or if you need lower payments initially. Eventually, if you decide you will stay in the home longer, you may want to consider refinancing that into a long term fixed rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time.
Remove mortgage insurance.
If you purchased a home with less than 20% down, chances are you're paying private mortgage insurance (PMI). Refinancing will help you eliminate the extra expense of private mortgage insurance (PMI).
Convert your 30-year loan to a shorter-term loan.
Sometimes plans change and the home that you thought you were going to have for a while turns from a permanent situation into a temporary one. If you are planning to sell sooner than you thought and no longer need a long-term rate, then you may consider converting your 30 year fixed to either an ARM or a 3/1, 5/1, or 7/1 loan program, which often have lower rates and payments.
Take cash out to consolidate your debt.
Leveraging your equity is one of the smartest ways you can make your money work for you. Use the cash from your equity to pay off higher interest debt that is not tax-deductible, like credit cards, student loans, or medical bills. By consolidating your debts, you can enjoy the benefit of having only one payment each month, and in most cases, your overall monthly outflow decreases.
Take cash out for home improvements.
What better way to use your hard earned equity than to invest it back in repairs or home improvements? Whether you would like to fix your leaky roof or update your kitchen, you can tap into your equity and have a tax deductible* way to tackle your projects. *Consult with your tax advisor.