Why should you consider a mortgage refinance? A mortgage refinance can allow a homeowner to save money on mortgage interest expenses.
Here are some common reasons homeowners get a mortgage refinance:
- Mortgage refinance to lower monthly payment
A mortgage refinance can result in a lower interest rate, which in turn will lower monthly loan payments.
This can allow homeowners to use the monthly savings for other purposes.
- Mortgage refinance to get cash
With this type of mortgage refinance, the borrower can get a lower rate and get cash out of the property to use for any purpose.
In order for this type of mortgage refinance to be a viable option, the homeowner must have a fair amount of equity in the property.
- Mortgage refinance to shorten loan term
Many people use a mortgage refinance to reduce the term of their home loan. While this strategy in many cases
increases the monthly loan payment, the loan is paid off much faster, which can save tens of thousands of dollars in interest costs over the life of the loan.
If you are considering a mortgage refinance to lower your monthly payment, you need to make sure that you will be staying in the property long enough to recoup the costs related to the mortgage refinance (i.e. application fee, processing fee, origination fee), property appraisal
and title-related fees.