How Do I Know If It's a Good Idea to Refinance My Mortgage?

By
Mortgage and Lending with Benchmark Mortgage NMLS# 247026

You Ask, We Answer: How Do I Know If It's a Good Idea to Refinance My Mortgage?Are you interested in paying less per month on your mortgage? Or perhaps you would prefer if your mortgage was paid off a couple of months – or years – faster?

If you are a homeowner with a mortgage, one option that is open to you is refinancing.

How Does Refinancing Work?

In short, refinancing is a process in which you pay off your existing mortgage and borrow a new mortgage under a different set of terms. In most cases, homeowners will use the funds from the new mortgage to pay off the old one.

Depending on the terms of your new mortgage, there may or may not be cash left over which you can use to invest, pay down debts, make renovations or for other purposes.

Refinancing To A Lower Interest Rate

Mortgage interest rates tend to fluctuate over time and because of this, refinancing to a mortgage with a lower rate is quite popular.

If you initially borrowed your mortgage when interest rates were at 5%, you may be able to lock-in a new mortgage at a lower rate.

Note that it can be tough to try to "time" the mortgage market, so check in with your mortgage professional to find out if the time is right.

Refinancing For Lower Monthly Payments

Another great use of refinancing is to reduce the monthly payment required on the mortgage. If you have ten years remaining on a 20-year mortgage, refinancing to extend the payments out to 15 years will lower the monthly payment.

Refinancing To Eliminate Other Debts

Finally, many homeowners will refinance their mortgage to use some of the home's equity to pay off other debts. For example, a family might have $25,000 in debts that are being charged a higher interest rate than their mortgage. If they have built up enough equity, they can refinance and draw out $25,000 from the home's value. This shifts the debt from the higher interest areas into the mortgage, where it can be paid off over time.

As you can see, there are many reasons why you might want to refinance your mortgage. To learn more about the refinancing process, or to discuss your options, contact us today. Our professional team of mortgage advisors is ready to help you choose the path that best suits your financial needs.

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Rainer
1,075
jhon smith
Essays Writing Service - Alachua, FL

Contingent upon the terms of your new home loan, there might possibly be money left finished which you can use to contribute, pay down obligations, make redesigns or for different purposes. Essay Help Online UK

Dec 19, 2017 03:17 AM #1
Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I hope home owners will read this post and learn from it. Thank you for sharing 

Dec 19, 2017 03:42 AM #2
Rainer
520,277
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Thanks for the great information!!!

Many homeowners will refinance their mortgage to use some of the home's equity to pay off other debts. If they have built up enough equity, they can refinance and draw out from the home's value. This shifts the debt from the higher interest areas into the mortgage, where it can be paid off over time.

Dec 19, 2017 03:42 AM #3
Rainmaker
3,275,006
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Diane. People should consider the options and proceed armed with knowledge. Enjoy your day!

Dec 19, 2017 05:45 AM #4
Rainmaker
3,168,057
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Diane,  Good blog on getting the word out for people thinking about refi now.

Dec 19, 2017 08:24 AM #5
Rainmaker
373,220
Dana Hollish Hill
Hollish Hill Group, KW Capital Properties - Bethesda, MD
Lead Associate Broker

I'm curious about refinancing to a 15-year loan from a 30-year loan and if it saves people money. Seems to be a trending topic lately.

Jan 07, 2018 09:36 PM #7
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Diane Beaumont

USDA,FHA,Jumbo,VA Woodland Park, CO Mortgage
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