Three Reasons to Refinance Your Mortgage
Typically, someone will refinance their mortgage for one of three reasons. Some may want to pay less on interest by refinancing to a better rate or, others may want to refinance to a fixed-rate due to wanting consistency with their monthly payments.
Refinancing to a better rate is a common method of potentially shaving thousands of dollars off of your loan. Instead of spending money on interest, you’ll be able to put it towards savings or maybe even invest it. Although, it must be noted that refinancing is not a free service. Refinancing involves some of the fees you paid when you originally received your mortgage: those may include loan origination fees, appraisal fees or escrow and title fees. Although, you can still save money in the long run by getting a better rate.
Secondly, switching an adjustable rate mortgage, or ARM, to a fixed rate mortgage is also very common. The reason many people may do this is for wanting consistency with their monthly payments. Maybe the market has been extremely volatile or up and down and you are not enjoying the differing rates month to month. If this is your case then switching to a fixed rate mortgage could be the appropriate solution for you.
Lastly, if you want to pay off your mortgage sooner rather than later, you can change the terms of your mortgage to get a shorter length. This will result in your payments being a little higher month to month, so you’ll want to be sure that you can afford the higher monthly payments. Contact your loan officer today if you’re interested in refinancing.