Reasons You Might Want To Refinance Your Home
December 15, 2020 Uncategorized
There are many reasons to refinance your home mortgage, as there are many possible benefits of a successful refinance. Many of them involve saving money in a variety of ways, but most refinances can help your financial situation and are worth your consideration.
Refinancing your house can have many benefits. What specific benefits you reap will depend on why you are refinancing. Your reasons for refinancing are your own, but pretty much all of the most common reasons for refinancing a home mortgage will bring you financial benefits, directly or indirectly. If you are contemplating refinancing your home mortgage, you should talk to a North Charleston real estate attorney to explore your options.
There Are a Number of Common Reasons to Refinance Your Home Mortgage
Among the most common reasons for refinancing your house is, of course, to save money on your monthly payment. With interest rates at historic lows, it could be possible to shave a couple points off your mortgage rate. Cutting your interest rate can save you a surprising amount of money on your mortgage payment each month. Obviously, that prospect makes reducing your interest rate – and thus your payment – a top reason for refinancing.
There are a number of other popular reasons for refinancing, including:
- Getting rid of PMI. If you put less than 20 percent down on your current mortgage, you probably have private mortgage insurance. If your home has appreciated or you have made enough payments that your home is now worth more than 80 percent of your original mortgage loan amount, you can get rid of that PMI.
- Moving from an adjustable-rate loan to a fixed rate. Adjustable rates are great when rates are falling, but rates usually rise again. Locking in a fixed rate can be a great idea if you plan to stay in your home.
- Refinancing at a shorter loan term. While switching from a 30-year mortgage to a 15-year mortgage or some other shorter term will make your payment go up, you will save a lot in interest payments over the shorter-term loan. Also, if your equity has built up enough, combined with a lower interest rate, a shorter term might not cost you much more per month.
- Your credit score has improved. If your credit score has gone up since you borrowed to purchase your home, you likely can get a lower rate. With rates down, you can now qualify for a better rate than you could have before.
- Taking cash out of your equity. If you have equity, you can refinance for more than you owe on your old mortgage and use the cash for other purposes. As long as you get a lower interest rate, your payment might not even go up that much.
If You Are Thinking About Refinancing Your Home Mortgage, Speak with North Charleston Real Estate Attorneys
If you are debating whether to refinance your house, you should get all the information you can regarding your options and what best suits your personal situation. Contact the attorneys of Weeks & Irvine – we know South Carolina real estate law and can help steer you in the right direction.