Freedmont Mortgage Guide to Refinancing
When you refinance, you take out a new mortgage with a lower rate or more favorable terms, and use it to pay off your old loan. As a result, refinancing could save you a substantial amount of money over the course of the loan.
Traditionally, mortgage refinancing was valuable only if you could lower your interest rate by 2%. Today, that isn’t the case. You need to consider more than just an interest rate.
Why should you refinance?
- Lower your monthly mortgage payment
- Save money for other uses
- Consolidate debt
- Build home equity faster
- Protect yourself from fluctuations in the economy
These are all good reasons to consider refinancing. In this section, find out how to determine whether it’s time for you to refinance and learn more about the benefits of mortgage refinancing.
At Freedmont Mortgage Funding, our loan specialists are trained to listen to your needs and carefully assess your financial situation. Only then will we recommend a customized solution that makes sense for you. Ready to get started? Begin our application process online or call 1-800-955-8508 for a no obligation, free consultation.
When you refinance an existing mortgage, you borrow money and use those funds to pay off your current mortgage. Most people refinance their mortgages to get a lower interest rate. The lower rate translates into a faster mortgage payoff or a lower monthly payment.
But a low rate isn’t the only reason you should consider.
- You want lower monthly payments
A lower rate may mean lower monthly payments. Consider taking out a new loan for the same length of time that remains on your current mortgage.
Choose this option if you plan to stay in your home for the life of the mortgage or need more cash for current financial obligations such as college or a new car.
- You want to pay off your mortgage more quickly
You may be able to shorten the length of your mortgage (say, from 30 to 15 years) while keeping your monthly payment at or near its current level. You could save thousands of dollars in interest and assume full ownership of your house more quickly.
Choose this option if you don’t plan to stay in your house for very long and you have ample current cash for your current financial obligations.
- You want to lock in a low rate
Refinancing may a handy way to convert your Adjustable Rate Mortgage into a fixed-rate mortgage, ensuring a stable mortgage payment. Check first to see if your current loan has a no-charge lock-in feature.
Choose this option if you expect the rate on your ARM to go up.
- You want a better Adjustable Rate Mortgage
An adjustable rate program may be available that has more favorable rates and terms than your current loan.
Choose this option if you are unhappy with the terms of your current ARM.
- You want to consolidate debt
If you have enough equity in your home, you might want to combine a home equity loan with your original mortgage and have one manageable payment. Or you might want to wipe out some other high-interest debt, such as credit and charge card balances or installment loans.
Choose this option if you have multiple debt obligations and want to simplify your payments.