Why Refinance Your Home

| November 5, 2011

Why Refinance Your Home, Today?

Why refinance your home? Maybe you would like to lower your house payment? There can be a number of reasons to consider refinancing. Here are some to look at.

Lower interest rates

Probably the most popular reason today is for lower interest rates. Many people are seeking to have a loan with lower interest than their current one. This can serve two purposes. First, you will have a lower house payment. Second, you may be able to pay your house off much sooner. There is no set rule for interest rates. Some people like to use two percentage points as a guideline. This can be a good way to determine your needs.

Another good way is to get more affordable payments. Can you substantially lower your current payment? If so, it may be a good time to take out a new loan. This may give you a chance to catch up on other bills. Perhaps it will keep you from going into the red each month. It may make the difference between keeping your house and moving.

Changing to a set rate

Do you have an adjustable rate mortgage? They are a very good option, when interest rates are low. However, when rates go up, so does your house payment. Maybe you are tired of gambling with your mortgage payment. It may be a very good time to consider refinancing. You can switch to a fixed rate mortgage? This will insure that your mortgage interest will never go up.

Better terms

If interest rates drop far enough, you may be able to get a shorter term loan. Check into the payment options on a fifteen year mortgage. If you can afford to make the payments, it is much better deal than the thirty year mortgage. It will pay hour house off in half the time. Not only that, you will save many thousands of dollars in interest payments. This is a sound financial decision.

Maybe you have a balloon mortgage on your property. If it is due soon, you will need to borrow the money to pay the note. Taking out a new mortgage may be the only way to do so.

Taking out home equity

This can be a very good way to borrow on your property equity. Perhaps you have checked into second mortgages. You may not be able to afford an extra house payment. There is another option called refinancing. You take out a new mortgage on your house. The money that you borrow will be used to pay off the old mortgage. You keep money that is leftover. You are free to do anything that you wish with the money. Make improvements or take a serious vacation.

There is one more important consideration. Be sure that you have enough equity in your house for this option. Also, make sure that your new house payment is manageable.

Summary

Why refinance your home? There are several good reasons to consider. The top reason is a lower interest rate. This can lower your payments and pay your house off sooner. Perhaps you have the chance to have a fifteen year mortgage. Maybe you wish to get rid of that adjustable rate mortgage. It may also be a good alternative for taking out property equity.

Category: Home Loan

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