Interested in reducing your mortgage? Who isn’t!
For those looking to reduce their monthly payments and/or pay off their home more quickly, refinancing (aka a re-fi) could be a good bet.
Refinancing Could Score You a Rate Reduction
The majority of consumers refinance to secure a lower loan amount with a lower interest rate. Even if refinancing only reduces your interest rate by .25% it could be worth it.
However, you will need to do a little math to determine if a re-fi will actually save you money. Like any new loan (which is what a re-fi is), there are fees associated with it. You will need to calculate how long it will take you recoup the cost of refinancing and ultimately break even.
Refinancing Could Eliminate Excessive Expenses
Borrowers who put down less than 20 percent typically carry private mortgage insurance (PMI). In some cases, the only way to drop your private mortgage insurance is by refinancing.
It is worth noting that a solid credit score will be essential to helping you secure a good rate. If a re-fi is something you are considering, talk to your loan officer immediate and find out what kind of interest rate you are eligible to receive.
Refinancing Could Allow You to Shorten the Term of Your Loan
In some cases, it could be worth shortening your loan’s term. While this will typically mean a larger monthly payment, it could significantly reduce the total cost of your loan.
Tip: If you’re considering a re-fi, organize all your mortgage paperwork electronically in PDFs. This will allow you to quickly and easily send it to your lender when needed.
Currently, interest rates are still at a favorable low. To get the most up to date information, it is best to speak with your loan officer immediately. Give me a call today.