Unlock the Benefits of Refinancing Your Mortgage
There are some major benefits to refinancing your home loan, but what is refinancing exactly? And how do you determine when it's a good time to take action? We're here to help you answer these questions and to explain some of the benefits.
WHAT IS MORTGAGE REFINACING?
When you refinance, it basically means you're taking out a new loan on your property. Ideally, this new mortgage loan comes with better terms than your previous one.
WHAT ARE THE BENEFITS?
Lower Interest Rates
By refinancing, you could potentially save thousands of dollars over the life of your loan when you lock in a lower interest rate. There are several different factors for why you should refinance your home mortgage, but when should you pull the trigger? Just like watching the stock market, you'll want to pay attention to the mortgage market through reliable resources like The Freddie Mac Primary Mortgage Market Survey.
Being educated on mortgage rates and having access to the right resources will help you determine the right time to contact your mortgage lender about refinancing options. Once you start to see the mortgage market shift in your favor, you can try out Renasant's Refinance Calculator to determine how much money you could save by lowering your rate.
Shorten Your Mortgage
When you refinance for a lower interest rate, there could also be the opportunity to shorten the length of your loan term. For example, you could go from a 30-year to a 20-year term and pay off the principal more quickly with less interest paid over time.
Opportunity to Change Your Mortgage Type
Life comes at you fast — and sometimes that means life plans can change. If you may be selling your home sooner than you anticipated or need more affordable payments now but not long-term, you could consider an Adjustable-Rate Mortgage (ARM). An ARM can offer lower interest rates for a period of five to ten years and then will adjust to the current interest rate after that period of time.
Funds for Home Improvement
You could also be looking to do some renovations to your space after being in the same house over a long period of time. Refinancing to a loan like Renasant's Renovation and Repair Loan could help you get the funding you need to add more value to your home.
SHOULD YOU REFINANCE?
It's important to talk with your mortgage lender or a trusted financial advisor to help you assess whether refinancing is the right financial decision for you. For example, you will have new closing costs for your new loan. You'll want to make sure that closing costs compared with the new lower rate savings will still make refinancing beneficial for you. You'll also want to consider things like the state of your personal finances and how long you plan to stay in your home.