5 Reasons You Should Refinance Your Mortgage
Getting a mortgage means moving one step closer to becoming a homeowner. However, purchasing a home can be a very lengthy process, especially when it comes to paying off your loan. Finding the best rates and payment terms is essential to paying your mortgage as soon as possible. But what if you find another loan that has even better terms than your current one?
Fortunately, it’s possible to save some money with a new loan. Refinancing your mortgage, or taking a new loan to pay off your existing one at a better rate, offers plenty of benefits that can save you money in the long term. It can help you pay it off faster, which means that you’ll have taken care of one of the most expensive purchases of your life!
Here are five reasons you should consider refinancing your home loan:
You’ll Have A Lower Monthly Payout
If you’ve been wanting to save a little money by lowering your monthly payments, refinancing your mortgage is a great way to do this. By checking the current mortgage rates and contrasting them with your loan, you’ll determine whether you can get a lower monthly payment. Even a one or two percent decrease in rate will make a massive difference in your mortgage payments, which also affects your financial future.
Taking on a new loan allows you to start anew on paying your mortgage, especially if you’ve found that your current payment scheme isn’t the best for your situation. However, keep in mind that there are fees when you refinance your home loan. Speak to a mortgage professional to ensure you’ll recoup those costs.
You’ll Pay Off Your Mortgage Faster
Meanwhile, if you want to pay off your mortgage on a much faster basis, refinancing your home loan makes that possible. Although you’ll have a higher monthly payment to pay it off faster, you’ll save much more interest. Money saved can be funneled into your other financial obligations, like car payments and credit card loans. With a new loan, you’ll be a genuine homeowner much sooner than you think.
You Can Build Faster Equity
As mentioned in the previous paragraph, a new loan means you’ll pay it off faster but with larger monthly payments. That also allows you to build equity for your property in a quicker way, which helps you save even more money on interest. You can use this equity for pretty much anything: future remodels or renovations, financing your education, and even improving your retirement. This helps you secure not only your financial future but the security of your home, too.
You Can Switch to a Fixed-Rate Mortgage
If your current mortgage has an adjustable rate, then you may have found yourself wishing for more stability in monthly loan payments. Refinancing your mortgage also makes this possible. Switching over to a fixed-rate mortgage will help you plan your finances much better as the rate will never change, unlike the adjustable-rate mortgage.
You’ll Boost Your Credit Score
Lastly, refinancing your mortgage actually improves your credit score. Although it may be painful to shell out a large sum every month for your mortgage, consistent payments can actually do wonders for your credit score. A higher credit score means that you’re in a much better position to take a new mortgage with a lower interest rate. You’ll even have the option to choose a cash-out refinance, which can improve it even more!
Refinancing your mortgage is one of the best ways to save money while paying out your mortgage on better terms. You’ll find more security and stability with a new loan, and you’ll enjoy a better credit score as well. With better interest rates, you can save tens of thousands of dollars over the long run—and that alone makes refinancing all the more worth it!
Hoping to refinance your mortgage? Let us know at Move Mortgage! We are an experienced team of mortgage professionals in Colorado that supports our clients in each stage of the mortgage process. We take pride in our unique, streamlined techniques that provide our clients with confidence in their home purchase or refinance. Get in touch with us today to see how we can help!