Refinancing a home is simpler than it sounds, but what if you aren’t sure if it’s right for you? Here are five reasons why you might consider an upgrade or alteration to your mortgage.
1: Lower Rates
New mortgage laws from the Consumer Financial Protection Bureau (CFPB) went into effect in early 2014, and some of them are lowering interest rates for applicable parties. If you locked into an expensive rate during your first mortgage, refinancing under the new regulations might lower your monthly costs.
2: Debt Consolidation
The economy is uncertain right now, and millions of Americans across the country are experiencing tax or credit card debt. If you are one of them, you might want to refinance your home so you can consolidate some of that debt by paying off the biggest offenders on your credit score.
3: Quick Cash
What’s the value of your existing mortgage? If you take out a new loan, you can use those funds however you’d like under the full protection of the law. It’s a simple solution if you need to pay for emergency medical bills or an unexpected disaster.
4: Shorter Payout Term
Everyone learns a little something with their first mortgage. For example, many people realize that they shouldn’t have agreed to 25- or 30-year loans. The good news is that you don’t have to be stuck with these contracts if you refinance. You can reduce your payout term by decades and save thousands over the years.
5: Better Loan Type
Do you regret that variable-rate mortgage? You can switch to a fixed-rate mortgage if you’re looking to lower costs or lock in your rates. This is another move that can save you substantial amounts in the future; all it takes is a refinance in the present.
If you’re dealing with any of the issues listed above, it may be time to consider refinancing your home. Mortgages are meant to help you. If they start becoming a hindrance instead, then it’s time to explore other options.