People decide to refinance their mortgage loans for many different reasons. If you are a homeowner considering whether or not to refinance your mortgage you should evaluate your reasons for doing so; here are three common reasons homeowners take the plunge and refinance their mortgage loans.
Get a Lower Monthly Mortgage Payment
Refinancing your mortgage loan is the quickest way to lower you monthly payment and keep more cash in your budget. The mortgage industry has so many new loan options available you should be able to easily tailor a mortgage loan to your financial needs. There are loan options available tailored to any financial objective from finding the lowest monthly payment to building equity quickly, even cashing out equity for any variety of reasons.
Consolidate Your Debts
Refinancing your mortgage to cash out equity and consolidate your high interest debts is an excellent reason to refinance. By consolidating your debts you will have one monthly payment to manage instead of juggling payments to multiple creditors. Refinancing your mortgage to consolidate debts does not eliminate your debt, it is simply a convenient method to pay back the debt and save money on finance charges. The interest you pay on the new mortgage becomes a tax deduction on your income taxes; this is a huge advantage over paying interest to credit card companies.
Safeguard Yourself from the Economy
If you financed your home using a risky adjustable rate mortgage, including an ultra-risky option or interest only mortgage, you might be concerned what rising interest rates will do to your mortgage payment. If you are coming to the end of your interest only period the lender will adjust your payment amount to include mortgage principle and adjust the interest rate. When this happens you can expect your monthly payment amount to skyrocket. By refinancing your mortgage to a fixed interest rate you will be safeguarding yourself from future interest rate hikes and economic uncertainty.
To learn more about your mortgage refinancing options, register for our free mortgage guidebook, “Five Things You Need to Know before Refinancing Your Mortgage.”