May 17, 2012
5 Reasons to Refinance
1 – Lower Monthly Payments
Interest rates are low, you’re already halfway through your existing mortgage and your monthly costs are up and you could really could use the cash. By taking advantage of lower than low interest rates and extending your 25 year home mortgage that has only 15 years remaining on it back for another 25 years, you lower your monthly payments and you get more cash in your pocket at the end of each month. Keep in mind though, that you are still in debt and that you are now going to be paying that loan for a much longer period of time.
2 – Bigger Savings
With lower interest rates and less fees these days, refinancing could save you thousands in the long run. You can also try to take advantage of the bonuses for earlier repayments. These things combined could amount to several thousand dollars in cumulated savings.
3 – Get Cash. Now.
By refinancing that mortgage in a way that gives you some cash to use, like switching to a Home Equity or Line of Credit loan, you get the opportunity to add some value to your home, or even get that car you urgently need. But remember, this is not cash you own, but cash you owe so spend it wisely.
4 – Debt Consolidation
Taking out a new loan can let you pay off your existing mortgage as well as your existing credit card debt and replace it for a loan that may take longer to pay but has a far lower interest rate than that credit card bill you have been struggling to pay off.
5 – Early Mortgage Repayment
Let’s say you just had that rare salary increase and you think you would like to put that mortgage out of your mind earlier in life. Refinancing your existing mortgage sounds like a good idea. You can take out a new loan with shorter terms, say 10 years instead of 25, and you can end up owning your house sooner than later. Less things to worry about later in life.
Taking out a new loan for your existing home mortgage might sound tedious or scary but by just getting the facts straight and throwing in a little careful math, you can make refinancing work for you.
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