When is Refinancing is Right for you?
Do you know if you are getting the best deal possible on your mortgage? It might have been on the day you closed, sure. But it’s been a while since then. Now you may be able to qualify or a lower mortgage payment. How, you ask? Refinancing.
What is Refinancing?
Obtaining a new mortgage to replace your existing mortgage is called refinancing. When you refinance the original loan is paid off and a new mortgage is created. The second mortgage will come with a new term, new interest rate, and monthly payment.
Why Should I Consider Refinancing?
Multiple kinds of refinances can help you achieve financial goals. When interest rates are low, the most popular reason to refinance is to obtain a lower mortgage payment. In some instances, borrowers want to lock in a low rate with an ARM-to-Fixed refinance. Below are just some of the benefits that refinancing can provide.
Lower Mortgage Payment
Lowering your monthly mortgage payment is probably easier than you think. Step one: check the interest rate on your existing loan. Step two: call a UHL mortgage expert to see how much they can save you. Sound too good to be true? It only takes minutes to try it and see.
Refinancing may come with associated fees depending on your interest rate. In some cases, you can opt to pay the costs upfront and receive a lower rate. Alternatively, your UHL advisor can provide you an overall rate quote, which covers the closing costs in the loan terms. In the long run, the overall savings achieved by lowering your rate will likely more than make up for any associated closing costs.
Outside of lowering your monthly payment, consider one the following as a reason to check up on the health of your mortgage.
- Shortening your loan term – The sooner you pay off your loan, the less you will pay in interest over time.
- Take out Cash – You can use the equity in your home to fund improvements, consolidate debt, or put toward college tuition.
- Lock in a Low Rate – Refinancing an ARM to a Fixed-Rate mortgage can provide peace of mind once the initial ARM period is over.
- Remove an Ex-Spouse from the Mortgage – One of the most popular options among divorcing couples is to refinance in order to fairly split the equity and ownership of the home.
To get started on your journey to a better mortgage, contact a UHL Mortgage Expert today.