Home Mortgage Loan Refinance Refinancing A Fixed Rate Mortgage

Home Mortgage Loan Refinance Refinancing A Fixed Rate Mortgage

Home Mortgage Loan Refinance - Refinancing a​ Fixed Rate Mortgage
Refinancing a​ fixed rate mortgage is​ usually only suggested when interest rates fall,​ but you​ can also save money by changing your loan terms .​
You can also pull out part of​ your equity to​ pay bills or​ renovate.
Lower Interest Rates
In general when interest rates are at​ least 1% lower than your current mortgage rate,​ it​ pays to​ refinance .​
But you​ need to​ consider other factors,​ such as​ the​ length of​ your mortgage,​ loan costs,​ and how long you​ plan to​ stay in​ your home.
An adjustable rate mortgage (ARM) should also be considered if​ you​ plan to​ move soon .​
With rates lower than a​ fixed,​ you​ will see lower monthly payments .​
But you​ have the​ risk that your rates and payments will increase over time.
To help decide if​ refinancing makes sense for you,​ calculate the​ difference in​ interest payments over the​ course of​ your loan .​
Online mortgage calculators can help you​ find both total interest costs and monthly payments.
Better Loan Terms
Besides lower interest rates,​ you​ can save money by converting to​ a​ better loan term .​
a​ shorter loan,​ such as​ a​ 15 year term,​ can save you​ thousands on​ interest payments,​ even if​ you​ don’t have a​ lower interest rate .​
However,​ your monthly payments will be 10% to​ 15% higher.
You can also reduce your monthly payments by refinancing for a​ longer term .​
You trade lower payments for higher interest costs.
Access Your Equity
Whether you​ want to​ pay off credit cards or​ pay for your child’s education,​ you​ can pull out your equity by refinancing .​
One of​ the​ advantages of​ using your equity is​ that your interest is​ tax deductible.
However,​ if​ you​ just want to​ tap into your equity,​ a​ better option is​ a​ home equity loan .​
You can pull out your equity,​ write off your interest on​ your taxes,​ and avoid loan fees.
Online Lenders
Online financing companies allow you​ to​ research terms and fees from your home .​
You can receive quotes within minutes online,​ so you​ can compare finance packages .​
You can also apply online and qualify for discounts on​ closing cost with some lenders.

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