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Refinance Is An Opportunity


When you refinance your mortgage, you get a fresh start at a new loan.  There are ample times when this is a good decision to make, especially when interest rates have dropped below what you are paying currently.  A refinancing of a mortgage is simply paying off the old mortgage with a new mortgage, with new terms and new interest rates.  Today, many people are refinancing their home loans from a variable interest rate to a fixed rate mortgage.  There are many reasons to look at your current loan and consider a change.

Should You Refinance?

The largest question about refinancing is if you should do it.  This decision is made on a case by case basis.  Here are some reasons to consider refinancing.

  • The interest rate that you are currently paying on your mortgage loan is higher than what you are currently able to secure through a lender.  This is especially true if there is a one point or more difference, but smaller amounts are to be considered as well.
  • You would like to lengthen or shorten the number of years it will take to pay off the mortgage.  For example, for a reduced payment monthly, increase a 15-year mortgage to a 20-year mortgage.  Alternatively, reduce the terms from a 30-year loan to a 15-year mortgage to pay it off sooner (and usually with less overall cost.)
  • Refinance for new stipulations on the mortgage.  If you are in a variable interest rate mortgage (adjustable rate) and would like to secure a fixed rate refinance to it.  This means that the interest rate on the loan will not change throughout the life of the loan giving you stability.
  • You may be able to refinance the home loan and take advantage of built up equity in the home to use to pay down debt, for home improvements or for other reasons as you see fit.  Here, you use the value of the home that is not mortgaged to draw out additional funds from the home.

These reasons for refinancing are some, but not all that you may have.  Refinancing is an excellent way to taking charge of your mortgage and making it more of what you want than what you currently have.