Home Mortgage Reasons To Refinance Your House

Home Mortgage - Reasons to​ Refinance Your House
Refinancing can have other financial benefits besides lowering rates .​
Locking in​ rates can protect you​ from higher rates,​ saving you​ money on​ future interest costs .​
You can also change your ARM for better caps to​ prevent huge monthly increases .​
Consolidating your bills with your equity saves on​ credit card rates while providing a​ tax advantage.
Protection From Future Rate Hikes
An adjustable rate mortgage (ARM) provides the​ lowest rates for home buyers,​ but these rates can increase .​
Monthly payments can jump a​ couple of​ hundred dollars a​ month depending on​ market rates and loan caps.
For those planning to​ stay in​ their home for more than seven years,​ it​ is​ a​ good idea to​ refinance to​ a​ fixed-rate mortgage if​ rates look likely to​ rise .​
Fixed-rate mortgages offer security from future payment hikes,​ but with slightly higher rates than ARMs.
Trading in​ For Better Caps
Many ARMs offer initial low set rates that can change after a​ couple of​ years .​
Jumps in​ payments can be surprising,​ especially if​ you​ have less than favorable caps .​
Caps set limits on​ how much and how often your payments can increase.
Refinancing your ARM can help you​ negotiate lower caps .​
You can also find an​ ARM with set rates for several years,​ just like with your original mortgage.
Helping to​ Pay Off Your Loan
Early payment of​ your home loan saves on​ interest costs .​
For those you​ need a​ structured approach to​ make larger payments,​ refinancing for a​ shorter term may be the​ answer.
For instance,​ exchanging your 30 year mortgage for a​ 15 year mortgage can reduce your interest costs by almost half,​ even at​ the​ same rate .​
Even with the​ origination costs,​ early payment will still save you​ money.
Taking the​ Tax Advantage
Mortgage interest is​ tax deductible,​ unlike interest on​ other bills .​
Cashing out part of​ your equity to​ pay off bills can give you​ a​ financial edge to​ get ahead .​
Be sure to​ make refinancing part of​ your larger financial goals to​ enjoy the​ full benefits.
Investigating Lenders
Investigate lenders before you​ sign a​ contract to​ be sure you​ are getting the​ best financial offers .​
Ask about their APR to​ get a​ true understanding of​ the​ loan costs .​
Many financial companies post this information online,​ or​ you​ can request near instant quotes.

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