How do you know when it’s the right time to refinance your mortgage? For most people, the best time to consider refinancing is if:
- You want a lower monthly payment
- You’d like a shorter term
- You’d like to make home repairs or consolidate your debt
Lower monthly payment
If current mortgage rates are lower now than when you bought your home—it’s time to refinance. You can lower your monthly payment simply by refinancing the remaining balance for the same loan term or lower it even further by refinancing for a longer term. Better yet, if you’re still paying Private Mortgage Insurance (PMI) you can refinance to remove that too. Even a quarter of a percent can can mean the difference of thousands of dollars in interest for the life of the loan. Curious how much you can save? Take our mortgage refinance calculator for a spin.
Refinancing your mortgage for a shorter term can save you thousands on your loan for two reasons.
- Shorter loan terms often receive better rates.
- Refinancing a smaller loan amount for a shorter term reduces your debt-to-income ratio (DTI) which may offer you an even better rate.
So even if your payment increases, you’re paying less in the long run and you’re paying it down even faster.
Home repairs & debt consolidation
Avoid high interest rate credit cards and use your homes equity. With something like a cash-out refinance, you can refinance your loan for a shorter term, remove PMI, and get the tax-free cash you need to make home repairs or pay off your other debt.
Still not sure? Let us figure it out for you!
Schedule a no cost, no obligation consultation with one of our Home Loan Experts and we’ll get you started in the right direction.