6 Reasons to Refinance

What is Refinancing?
It gives you the chance to replace your existing mortgage with a new mortgage. The new loan is secured against your property as the collateral and may exceed the current loan balance. The new loan funds are used to payoff the existing mortgage while the remaining cash can be used to help better your financial situation.There are many great reasons to refinance.  If you are asking the question “Should I refinance my home”. We have listed the top 5 reasons why homeowners make the decision to refinance their home.  

1. Lower Your Monthly Payment
If you plan to live in your home for 3 or more years, it may make sense to pay a point or two to decrease your interest rate and overall payment. Over the long run, you will have paid for the cost of the mortgage refinance with the monthly savings. On the other hand, if you plan on moving in the near future, you may not be in your home long enough to recover the refinancing costs. Our mortgage advisors can help with calculating the break-even point and help you determine whether it makes sense to refinance.  Apply Now

2. Switch from an Adjustable Rate to a Fixed Rate Mortgage
Adjustable rate mortgages (Arms) can provide lower initial monthly payments for those who are willing to risk upward market trends. Arms are also ideal if you don’t plan to own your property for more than a few years. However, if you plan on staying in your home, you may want to lock in your adjustable rate for a 15-, 20- or 30-year fixed rate mortgage. A fixed rate gives you the confidence of knowing what your payment will be every month for the term of your loan term. Apply Now

3. Shorten your Mortgage Term

Refinancing your current mortgage to a shorter term can result into saving thousands of dollars. In most cases your monthly mortgage payment will increase, but the long and short term benefits out weight the monthly increase of payments. You will save thousands of dollars in interest, build equity in your home faster and be debt free. Apply Now

4. Escape Balloon Payment Programs

Like adjustable rate mortgage programs, balloon programs are great when you want lower rates and lower initial monthly payments. However, if you still own the property at the end of the fixed rate term (usually 5 or 7 years), the entire balance of your mortgage is due to the lender. If you are in a balloon program, you can easily switch over into a new adjustable rate mortgage or fixed rate mortgage. Apply Now

5. Cash to payoff debt
Your home is a great resource for extra cash.  If your home is worth more than you owe on your mortgage it gives you the ability to take some of that cash and put it to good use. Pay off credit cards, make home improvements, pay tuition, replace your current car, or even take a long-overdue vacation. Talk to one our Mortgage Advisors experts on a mortgage refinance transaction, it’s easy.  Apply Now

6. Remove Private Mortgage Insurance (PMI)

Zero or Low down payment options allow homeowners to purchase homes with less than 20% down. Unfortunately, they also usually require private mortgage insurance, which is designed to protect the lender from loan default. As the value of your home increases and the balance on your home decreases, you may be eligible to remove your PMI with a mortgage refinance loan. Apply Now

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