Four Reasons Refinancing Makes Sense
Today’s low mortgage rates may have you considering a refinance of your home’s mortgage. Is it a wise move to trade your current mortgage for a new one? Here are four good reasons why refinancing may be the right decision.
- Your interest rate will be lower. Mortgage rates change from year to year, so the rate you’re paying on your mortgage may be higher than current mortgage rates. A lower rate may save you thousands of dollars in interest over the life of your loan.
- Your mortgage payment will be less. Refinancing lowers your mortgage rate, which can also lower your monthly payment. Depending on the difference between your current mortgage rate and your new one, refinancing may reduce your mortgage payment by hundreds of dollars each month. This creates additional cash flow that can be used for home improvements, paying off credit cards, saving for retirement and other purposes.
- You can move to a fixed-rate mortgage. If you currently have an adjustable-rate mortgage, refinancing to a fixed-rate home loan is the way to get a predictable mortgage payment for the long term. Locking in a fixed rate at today’s favorable numbers offers protection from rising interest rates.
- You can get cash from your equity. You don’t have to sell your property to have access to the equity you’ve accrued. A cash-out refinance allows you to use this equity as you wish (to pay for debt consolidation, college expenses, home improvements or other needs). You can borrow up to 80 percent of your available equity. You should be aware, however, that a cash-out refinance increases your mortgage balance, often resulting in higher monthly payments.
There’s a lot to consider if you’re planning on refinancing your home. The mortgage professionals at American Portfolio Mortgage can help you weigh the advantages and determine if refinancing your mortgage is the right move. We can assist you through the entire process, from application to successful closing.
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