Why Should You Refinance Your Mortgage?
The first benefit everyone thinks of when refinancing is a lower mortgage interest rate and lower payments; however, there are other reasons to refinance. With mortgage interest rates on the rise you want to be sure and lock your rates while it still makes sense to do so. With rates still near record lows, don’t hesitate and lose out on this opportunity.
If you opted for an adjustable rate mortgage when you first purchased your home, but are now planning on staying put, then refinancing is probably a good choice for you. As opposed to an adjustable rate mortgage, a fixed rate mortgage allows you to know exactly what your payments will be every month for the term of your home loan. A stable monthly payment could help a borrower budget their expenses better and will avoid increased mortgage payments when their rate increases.
A cash-out refinance can help a potential borrower in a number of ways. You can use the money from a cash-out refinance to increase the value of your home by remodeling your kitchen, updating a bathroom or in countless other ways. You could also use the cash to lower other debts. Many people choose this option because they may have higher interest rates on their credit card payments than they do on their mortgage, which will save them money in the long run. Also, a cash-out refinance can be a great source of funds for college education expenses. If you are like most of us, you probably do not have enough cash saved to pay for all of your kids’ college tuition costs.