What Is Refinancing?
When you refinance your home loan, you are paying off the original loan by obtaining a new loan with new terms and a new rate.
Why Should I Refinance?
There are a number of reasons to refinance your home loan. This list includes:
Lowering your monthly payment: If current mortgage rates are lower than when you originally bought your home, you can refinance to decrease your monthly mortgage payment.
Building equity more quickly: If you are looking to make higher monthly payments (due to a raise at work, a recent inheritance, etc.) you can refinance your loan from a 30-year to a 15 or 20 year loan allowing you to build equity in your home at a faster rate.
Using your home’s equity: Use your home’s equity to your advantage by doing a cash-out refinance. This will allow you to use money from the refinance to pay for home improvements, college tuition, pay off credit cards, etc.
Switching the loan program type: Refinancing your home loan will allow you to switch from an adjustable rate mortgage to a fixed rate mortgage, or vice versa depending on interest rates.
Managing your credit: If your credit score has increased since you took out your loan, you may be able to use this to your advantage to refinance into a loan with a lower interest rate and decreased payments.
Getting rid of mortgage insurance: If you have a premium mortgage insurance but have 20% equity in your home loan, you may be able to keep more money in your pocket by refinancing into a loan without mortgage insurance.
When Should I Refinance?
Refinancing is not the right choice for every homeowner, but with current market rates, now is a great time to consider it. For the best refinancing advice, get in contact with a Summit Funding loan officer today. They will be able to review your personal situation and help you determine the best route. Get started here!