Should Refinancing Your Mortgage Be In Your Future

Should Refinancing Your Mortgage Be in​ Your Future?
Buying the​ house you​ wanted brought you​ a​ lot of​ joy .​
Soon,​ you​ moved in​ and were glad to​ get settled .​
You had your mortgage,​ and you​ may have gotten a​ larger house because you​ were able to​ get an​ adjustable rate mortgage .​
Here are some reasons,​ though,​ why you​ may want to​ think about refinancing that mortgage.
The Future is​ Unpredictable
Adjustable rate mortgages allowed many people to​ get that larger house simply because it​ started out with lower payments - initially .​
However,​ if​ it​ has not started already,​ the​ day is​ coming when the​ fixed rate portion of​ your mortgage will soon be over .​
Once that happens,​ you​ can expect a​ jump in​ your rates because your payments will get a​ new interest rate .​
The new interest rate will be changed regularly - limited only by caps set by law.
You still may expect quite a​ jump - or​ it​ may stay steady,​ or​ even decrease - depending on​ the​ market .​
The possibility is​ there that it​ could become higher than you​ might be able to​ pay .​
This makes it​ potentially bad .​
Besides that,​ when rates do become higher,​ it​ may be too late to​ refinance .​
Every mortgage,​ at​ that time,​ will probably become unaffordable for most people .​
Get a​ Better Interest Rate
If you​ watch the​ market rates,​ you​ will know when you​ have a​ good opportunity to​ get a​ better interest rate .​
Lower interest rates will mean that it​ is​ a​ good time to​ refinance your mortgage .​
It also means that you​ could lower your monthly payments and get a​ much more secure fixed rate mortgage .​
It is​ also possible that if​ you​ did not have very good credit when you​ got your current mortgage,​ that you​ could see an​ even greater reduction in​ your interest rate .​
a​ better credit score results in​ better terms when you​ refinance,​ so you​ will also want to​ make sure it​ is​ in​ as​ good as​ shape as​ possible .​
Reduce the​ Length For More Savings
You could save much more money if​ you​ are able to​ keep your payments about the​ same and shorten the​ time length on​ your mortgage .​
If you​ currently have 20 years left on​ your existing mortgage,​ reduce it​ to​ 10 or​ 15 years when you​ refinance for tremendous savings - if​ your can .​
This simple step will enable you​ to​ save tens of​ thousands of​ dollars over the​ remaining life of​ your new mortgage .​
Get Cash From Your Equity
If you​ have lived in​ your home for a​ few years,​ then you​ will have some equity built up .​
Using your equity as​ a​ source of​ cash for whatever need or​ want you​ have is​ a​ good way to​ get a​ low interest loan - with time to​ pay it​ back .​
All you​ need to​ do is​ to​ add the​ cash you​ want to​ the​ total amount you​ need .​
Keep in​ mind,​ though,​ that you​ will need to​ leave 20% of​ the​ value of​ your house untouched .​
If you​ get a​ loan for more than 80% of​ the​ value of​ your house,​ you​ will need to​ pay for private mortgage insurance .​
Take enough time when you​ are trying to​ refinance your mortgage to​ get several quotes and compare them carefully .​
This will help you​ see which offers are really good .​
Do not limit yourself to​ looking just at​ the​ interest rate,​ but also consider the​ total amount of​ fees,​ as​ well as​ the​ overall cost of​ refinancing .​
You also want to​ make sure that there are no penalties for paying it​ off early.

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