When it comes to whether or not to refinance a mortgage, you may be wondering what’s in it for you? While refinancing a mortgage doesn’t make sense for everyone, there are several good reasons you may want to consider taking a look at your mortgage and deciding if refinancing is a beneficial option for you.
Refinance a Mortgage for a Better Interest Rate
One of the top reasons people choose to refinance a mortgage is to get a better interest rate than the one they currently have. Interest rates are always changing and if interest rates are now low, you could get a new rate significantly lower than the one you’re presently paying.
You want to consider refinancing if you aren’t pleased with the type of interest you’re currently paying. When you get a mortgage, it’s usually either an adjustable or fixed rate mortgage. An adjustable rate is a good option if rates are currently high, but you expect them to drop in the future. A fixed rate mortgage is great if interest rates are currently low when you get the loan. Considering your circumstances, it can make sense to refinance from a fixed rate mortgage to an adjustable mortgage or the other way around.
Refinance to Change Your Monthly Payment
When you started out paying your mortgage, the amount you put down toward your home each month should be less than 28% of your total income. While this might have been the case when you first applied for your loan, your circumstances may be different now.
If you’re making more now, you might want to consider paying more toward your loan each month so you can pay it off faster and even pay less interest over time. However, if you’re now making less than you did when you first applied for the mortgage, you can take this opportunity to pay less each month. If you refinance your mortgage to get a better interest rate you can make smaller monthly payments going forward.
Refinance to Lengthen or Shorten Your Mortgage
Another great reason to refinance a mortgage is to change the length of your loan. When you first applied for a loan, a 30-year loan with a small monthly payment was probably highly appealing. However, if you want to get out of debt sooner and can afford to make larger monthly payments, a new term such as 15 or 25 years may be more suitable. A short-term loan means you pay more each month, but you’ll end up paying less over time.
When you choose to refinance a mortgage, this can be a great way to save money and get out of debt quickly. To make sure you’re making the right decision when it comes to refinancing, talk with us at BrightPath so we can help you choose the best refinancing option to fit your financial situation.
Give us a call today at 888-222-6003 or complete our online form so one of our experienced mortgage specialists can help you determine if refinancing your mortgage is right for you.