A home mortgage is a long-term financial obligation. Typically, your mortgage payment is your biggest expense every month. Whether you took out your mortgage one year ago or you have been paying on it for many years, you might want to think about refinancing your mortgage to know if you can save money down the road. There are many benefits that mortgage refinancing can offer. These include:
It Shortens your Loan Term
If you have a thirty-year mortgage, you want to refinance your loan when the time is right. When there are record low interest rates, a 15-year mortgage might not be much more expensive than your 30-year loan payment. To know your new payment, use a mortgage calculator.
Lowers your Monthly Payment
Mortgage refinancing at a lower rate could significantly decrease your payment and save you thousands of dollars in interest. Also, as your payment is lowered, you will be able to free up some money every month that you could save or invest.
Lets you Take Advantage of New Features
Refinancing your mortgage with Key City Lending lets you take advantage of new features. This could be the new rates which might save you money or the option to repay the loan faster without paying penalty charges. A number of mortgage loans will not charge you a monthly account fee or withdrawal fee. The new features that refinancing comes with could provide you with more power over your finances.
Lets you Cash Out Home Equity
Perhaps you have been planning to renovate your home but you just could not start since you don’t want to use your savings to get the project done. Mortgage refinancing can let you cash out your home equity to fund your planned renovation.
The line of credit that your home equity gets you depends on your home’s value and on the amount you have repaid on the mortgage. The new money available to you could be used for funding your college education or buying your dream furniture you have been eyeing to own.
Helps Improve your Credit Score
With significant equity in your home, a cash-out refinance is something you can take advantage of to pay down your other debts. This can greatly help in improving your credit score.
Eliminates Private Mortgage Insurance (PMI)
When the value of your home has increased since you took out the loan, you might eliminate PMI from your payment. This is possible if you have 20% equity in your home.