Maintaining a home can be trying at times even when the world is perfect, not to mention when there are situations out of your control such as economic recessions, sudden unemployment, or decrease in home value based on the location of your home.
Luckily for homeowners, there is relief in the form of refinancing home mortgages – and KCCU is currently offering a FREE APPRAISAL when you refinance! By refinancing your home loan, you are afforded the opportunity to save money or tap into your home’s equity. A mortgage refinance replaces your current home loan with a new and revised home loan. Others get a mortgage refinance to pay off the loan faster, eliminate FHA mortgage insurance or switch from an adjustable-rate to a fixed-rate loan.
Here are 3 benefits of refinancing your home loan.
- Lower Your Monthly Payments
One reason for a person refinancing a mortgage is to net a lower monthly payment. Before refinancing, it’s best to check the most current mortgage rates to make sure they’re lower than your current rate. With interest rates currently at record lows, now might be the perfect time to look into refinancing your mortgage. Something to consider is that there are fees involved with refinancing, so make sure you’ll be able to recoup the cost of those fees. To do that, you should occupy your home for as long as possible.
- Utilize Your Improved Credit Score
Paying your mortgage on-time every month, is a great way to improve your credit score. The better your credit score, the better your position to refinance down to a lower interest rate. Choosing a cash-out refinance can improve your credit score that much more by using the extra money to pay down your credit cards and other debts faster. If you opt out of paying of your debts, or if your debts are already manageable, you can simply put the extra money into your savings accounts.
- Pay Off Your Mortgage Sooner
Refinancing your mortgage to obtain lower terms allows you to pay off your mortgage and become a genuine homeowner sooner. Again, you’ll have higher monthly payments if you go from a 30-year mortgage to a 15-year mortgage, but that also means you save money in interest over the long haul. Evaluate your outstanding debts as well as budget your monthly expenses to see if the higher monthly mortgage payments are feasible and make sense. By paying your mortgage off sooner, it will leave you with one less monthly payment to make.
For more information on refinancing your mortgage click here to get started, or call us to make an appointment to have one of our mortgage experts walk you through the process.