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TRENDING BASIC MONEY MANAGEMENT TIPS
11.12.2020 / Borrowing « Back to all articles
The Benefits of Refinancing Your Home
When you bought your home, you took out a mortgage loan to help cover the cost of the purchase. As long as you maintain that mortgage, you might think you're stuck with the rates and terms of your original loan, even if you improved your finances over the last few years. Though it might seem like you're stuck until you sell the house, you're not. You may be able to refinance your mortgage. Here are a few benefits you could experience with a refinance.
Lower Interest Rates
Interest rates change based on the market’s conditions as well as your personal financial situation. If your original mortgage has a high interest rate, refinancing gives you the opportunity to take advantage of a new lower rate. That lower interest rate means you’ll pay less over the life of your loan and can potentially save thousands of dollars if you stay in your home for years to come.
Lower Monthly Payments
Your monthly mortgage payment consists of two parts: the principal payment and the interest payment. When you refinance your home, you only have to refinance the amount of money you still owe on the property. Depending on your financial situation, this may end up lowering your monthly payments, especially if your new loan includes a lower interest rate. Those lower monthly payments can free up cash and ease any financial strain you’ve felt over the last few years.
More Favorable Terms
When you refinance your mortgage, you’re able to take out an entirely new loan with different loan terms. This could be good news for you if you want to either repay your loan faster or break the payments up into smaller, more manageable monthly installments. You may be able to lock in more favorable terms that work better for your current financial situation.
More Predictable Monthly Expenses Some homeowners end up with variable-rate mortgages. This means that interest rates can change over time, making it hard for you to budget appropriately each month. By refinancing, you have the opportunity to switch to a fixed-rate loan. With a fixed-rate loan, the rate you get at the time you accept the money is the rate you’ll have for the rest of the loan’s term. It will never change unless you refinance the loan again.
Gives You Access to the Equity You Have in Your Home
Refinancing offers you a simple way to use the equity you’ve built up in your home over the years. Instead of taking out a new loan for what you owe on your current mortgage, you could borrow the full value of the house. You can then use this money to make improvements or settle more expensive debts.
Refinancing your mortgage may be a simple way to save money in the long run. Look at your finances and your current loan’s terms to see if it’s the right decision for your family. If it is, you’ll likely experience these benefits once the refinance is complete.
Credit Talk
11.12.2020 / Borrowing « Back to all articles
The Benefits of Refinancing Your Home
When you bought your home, you took out a mortgage loan to help cover the cost of the purchase. As long as you maintain that mortgage, you might think you're stuck with the rates and terms of your original loan, even if you improved your finances over the last few years. Though it might seem like you're stuck until you sell the house, you're not. You may be able to refinance your mortgage. Here are a few benefits you could experience with a refinance.
Lower Interest Rates
Interest rates change based on the market’s conditions as well as your personal financial situation. If your original mortgage has a high interest rate, refinancing gives you the opportunity to take advantage of a new lower rate. That lower interest rate means you’ll pay less over the life of your loan and can potentially save thousands of dollars if you stay in your home for years to come.
Lower Monthly Payments
Your monthly mortgage payment consists of two parts: the principal payment and the interest payment. When you refinance your home, you only have to refinance the amount of money you still owe on the property. Depending on your financial situation, this may end up lowering your monthly payments, especially if your new loan includes a lower interest rate. Those lower monthly payments can free up cash and ease any financial strain you’ve felt over the last few years.
More Favorable Terms
When you refinance your mortgage, you’re able to take out an entirely new loan with different loan terms. This could be good news for you if you want to either repay your loan faster or break the payments up into smaller, more manageable monthly installments. You may be able to lock in more favorable terms that work better for your current financial situation.
More Predictable Monthly Expenses Some homeowners end up with variable-rate mortgages. This means that interest rates can change over time, making it hard for you to budget appropriately each month. By refinancing, you have the opportunity to switch to a fixed-rate loan. With a fixed-rate loan, the rate you get at the time you accept the money is the rate you’ll have for the rest of the loan’s term. It will never change unless you refinance the loan again.
Gives You Access to the Equity You Have in Your Home
Refinancing offers you a simple way to use the equity you’ve built up in your home over the years. Instead of taking out a new loan for what you owe on your current mortgage, you could borrow the full value of the house. You can then use this money to make improvements or settle more expensive debts.
Refinancing your mortgage may be a simple way to save money in the long run. Look at your finances and your current loan’s terms to see if it’s the right decision for your family. If it is, you’ll likely experience these benefits once the refinance is complete.
