July 16, 2019 – Mortgage rates have had an impressive run, actually the best since 2011, but these big moves only last so long. There are several reasons why refinancing might be right for you.
- Lower your monthly mortgage payment — The main reason to refinance is to lower your monthly payment and improve your cash flow.
- Lower your overall costs — Another reason why people choose to refinance their mortgages is to lower their borrowing costs by taking advantage of the lower interest rate. This is why more people are refinancing their home loans when interest rates are low.
- Reduce your risk — Refinancing can also be used as a risk management tool. For example, if your original home loan is an adjustable rate mortgage (ARM), you could refinance to a fixed rate mortgage to protect yourself against sudden rise in interest rates when the initial discount period expires.
- Raise cash — Unlock your home equity and gain access to cash. This is called a cash-out refinance. This money could be used for different purposes; for instance, home renovation, to pay off high interest debts such as credit cards, paying for major expenses, or for investment purposes.
- Shorten your mortgage term — It isn’t always about lowering your monthly payment. If you are earning more than you used to, it may be worthwhile to convert your longer-term mortgage to a 15, 10 or 5-year loan. This is generally better than prepaying the loan, because these loans have lower interest rates than a longer-term loan. This will help you pay off your home loan much faster and save you tens of thousands of dollars in interest payments.
- Eliminate Private Mortgage Insurance (PMI) — If your equity increased above 20% due to the rise in your home value, refinancing could be an option to get rid of your PMI. Getting rid of your PMI could save you hundreds every month.
Please consider the Doakes Team and I as your “go to” for mortgage questions, information, and financing options.
Watson Mortgage Corp. | 6206 Atlantic Blvd., Ste. 1 | Jacksonville, FL 32211