3 Reasons Homeowners Refinance Their Homes
To answer that, first, we need to understand what happens when a mortgage is refinanced, and what it might mean for you as a homeowner.
Put simply, mortgage refinancing describes the process of paying off your existing home loan with a new home loan-usually, one that has better terms and/or interest rate. Over the years, as your financial situation and interest rates change, refinancing can help you save money, pay off your mortgage more quickly, and even draw on your home equity for projects and purchases that make your home that much sweeter.
Refinancing can be a strategic move for you as a homeowner. But before you decide, we recommend plenty of careful consideration and planning. Here are some of the most common reasons you may decide to refinance your home loan.
1. Lower Your Interest Rate
Interest rates for home loans change over time. Last year’s rates might not be the same as they were ten years ago when you purchased your existing mortgage-and if they’re lower, it may be wise to refinance and lower your monthly payment. This can be helpful when it comes to growing your savings, paying off other debt, or cutting costs when money is tight.
Also, refinancing from an existing longer term loan to a new shorter term loan can help you pay off your home faster, but requires a higher monthly payment. We can help you figure out the options that work best for your individual situation.
2. Consolidate Debt
Refinancing your mortgage can help you consolidate high-interest debt into a low-interest home loan. Credit cards, student loans, and car loans are all examples of loans that can be rolled into a single low-interest monthly payment, providing a path to lowering your expenses and paying down otherwise high-cost debt.
3. Cash Out Your Equity
Thinking of making home improvements, but don’t have cash on hand? Refinancing your mortgage lets you utilize your home’s equity to fund projects that might otherwise be unaffordable. Plus, you can even use that equity to increase your home’s value over time. Learn more about strategic moves you can make with your home equity.
Refinance rates can change quickly-not just year-to-year, but month-to-month or even hour-to-hour, too. Stay vigilant and keep an eye out for opportunities to strategically refinance. (We certainly are.) A lower rate could open new doors for you and your family, especially when you consider the extra cash you’ll have in your pocket every month.
Mortgage Refinance Rates
Need to refinance now? Get a comprehensive picture of current mortgage rates and explore your options with help from our team. Track APRs (annual percentage rates) using the tool below and never miss an opportunity to save.
Contact us today to learn more about current mortgage rates.
Want to Run a Test Scenario?
We offer a mortgage loan refinance calculator for you to see how refinancing could work out for you. This is just one of several free online mortgage calculators about various home loan related scenarios for you to use at any time.
Ready to Refinance? Compare Your Options
Mortgage refinancing isn’t a one-size-fits-all move. When you’ve decided to refinance, you have the option of choosing a product that aligns more closely with your goals based on your personal risk tolerance, current interest rates, and how long you plan to stay in the home.
APR = Annual Percentage Rate. APR is the cost to borrow money expressed as a yearly percentage. For mortgage loans, excluding home equity lines of credit, it includes the interest rate plus other charges or fees.
Rates and terms are subject to change without notice. Rates are for illustrative purposes only, and assumes a borrower with a credit score of 700 or higher which may be higher or lower than your individual credit score. Adjustable Rate Mortgage (ARM) loans are subject to interest rate, APR, and payment increase after each change period. For instance, a 5/5 ARM means that you will pay a fixed rate for the first five years of the loan, and then your rate is subject to change once every five years thereafter through the remainder of the loan. Interest rates and APRs are based on current market rates, and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Depending on loan guidelines, mortgage insurance may be required. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit history up to the time of closing. The estimated total closing costs in these rate scenarios are not a substitute for a Loan Estimate, which includes an estimate of closing costs, which you will receive once you apply for a loan. Actual fees, costs and monthly payment on your specific loan transaction may vary, and may include city, county or other additional fees and costs. Not all loan options are available in every state. Borrower is responsible for any property taxes as a condition of the loan. Membership with Greater Nevada Credit Union is required for select loan options. This is not a credit decision or a commitment to lend.
Please contact a Mortgage Consultant to learn about all details on loan options and programs available. You may contact one directly, or call Greater Nevada Mortgage at 775-888-6999 or 800-526-6999. We do business in accordance with the Federal Fair Housing Law and the Equal Opportunity Act, and the California Fair Employment and Housing Act.