Should you refinance your mortgage?
There are a few reasons why people consider refinancing their current mortgage. Understanding the big picture of what comes with getting a new mortgage can help you determine if refinancing is right for you.
Switching from an adjustable-rate mortgage to a fixed-rate mortgage
The main benefit is stability. While an adjustable-rate loan’s monthly payments can fluctuate, the monthly payment of principal and interest on a fixed-rate loan will stay the same throughout the life of the loan. This can make it easier to set your monthly budget, and can also provide peace of mind. With a fixed-rate loan, even if market interest rates go up, your principal and interest payments won’t.
Lower your monthly payments
Lowering your monthly mortgage payment by refinancing to a lower rate or extending your loan term can make it easier to pay your mortgage on time every month, while also possibly covering your other debts and expenses. And if you are concerned about your ability to make your current mortgage payments in the future, lowering your payments now can help relieve that pressure.
This option allows you to borrow against your home’s available equity and utilize the excess cash to pay for other expenses. Your new mortgage proceeds will first be used to pay off your existing mortgage(s), including closing costs and prepaids, and any remaining funds are yours to use. Both home equity loans and home equity line of credits allow you to borrow against your home’s available equity. Based on your personal situation and financial needs, one of our mortgage bankers can provide the information you need to help you choose the best option for your situation.