A mortgage broker can help you assess whether you’ll save money by refinancing. On the other hand, those who can afford the current monthly payments may benefit from shorter refinancing, such as a 15-year or 20-year mortgage … Here are the top six benefits of refinancing a mortgage: Lower Your Monthly Payments. Assuming your application is approved, you’ll also have to pay a loan origvination fee. If the closing costs are a relatively high, it’ll take you longer to recoup the expense in terms of the money you’re saving on a monthly basis. What Are the Benefits of Refinancing a House?. When considering refinancing your home with Fairway Independent Mortgage Corporation, it is important to determine what goals you have for your short-term and long-term finances. The same is true if you’ve got a HELOC that’s approaching the end of its interest-only repayment period. What exactly is refinancing? MortgageLoan.com® is a registered service mark of Mortgage Loan Directory and Information, LLC. If you can get a lower rate, it’s always worth looking into refinancing your mortgage, particularly if your term is the same (e.g. Hearing about benefits as good as those mentioned above make most people a little too hasty about refinancing. Once you have to start repaying the principal, you could see your payments increase substantially which can put a major strain on your wallet. Mortgage Loan Directory and Information, LLC or Mortgageloan.com does not offer loans or mortgages. Pay Off Your Mortgage Sooner Generally, when you buy a home you have to pay certain closing costs to complete the sale. Speak with … On the other hand, those who can afford the current monthly payments may benefit from shorter refinancing, such as a 15-year or 20-year mortgage instead of a 30-year loan. People typically refinance for a lower interest rate, often with a shorter loan term to save thousands of dollars on interest. Mortgage rates are usually lower than the interest rates paid on credit cards and other unsecured debt, so you save on interest payments. 3 Benefits of Refinancing Your Mortgage When the Federal Reserve reduced interest rates earlier this year in response to COVID-19, it also impacted the real estate market. There are no refunds if your application is denied. A lower interest rate typically implies lower monthly payments, especially if your refinanced mortgage holds the same payoff date as your previous loan. Home Mortgage Refinancing Defined. An award-winning writer with more than two decades of experience in real estate. 1. Refinancing Basics & Benefits. Photo Credit: © iStock/MCCAIG, © iStock/tazytaz, © iStock/styf22. Taking out a fixed-rate loan also makes sense if you’ve got an adjustable rate mortgage or you want to consolidate a home equity line of credit (HELOC) into your primary mortgage. This may be the most common reason for refinancing. Mortgage interest is a fluctuating giant. Costs and Benefits of Refinancing There are many good reasons to refinance your home loan. Refinancing is basically replacing the existing mortgage with a new debt obligation.This new loan offers better terms to help improve the finances of the homeowner. Paying less towards your mortgage each month also frees extra cash in your budget that you can put towards your short- and long-term savings goals. How Much Do I Need to Save for Retirement? There are a few types of mortgage refinancing that don’t require you to get a home appraisal. But this isn’t the only reason why you should consider refinancing. Like what you're reading? Refinancing is not the same as a second mortgage. See how much house you can afford with. Make sure to have some cash to pay for things like closing costs, property taxes and other fees. August 28, 2018. By refinancing your mortgage, you can replace your current loan with a new mortgage bearing better terms. Refinancing can be a good option for anyone who wants to save money on their home loan. Benefits Of Refinancing A Mortgage Mortgage refinancing can provide a number of benefits. Refinancing your mortgage has a lot of benefits, depending on your situation. Have a question? Recasting a mortgage can be a good idea if you come into a lump sum of cash and want to reduce … The ARM mortgage starts with fixed-rate for an initial period, which could be could be three, five, seven, or ten years. Refinancing your mortgage provides many benefits, such as receiving a lower interest rate, reducing the amount of your current mortgage payment or taking out cash. These will vary from borrower to borrower, depending on what they're looking to achieve. The reason for this is that since everything else is remaining constant, if your rate goes down, your base monthly payment (not including taxes and homeowners insurance) will go down. It pays to weigh the pros and cons before you refinance. In many cases, you’ll see a smaller monthly payment if you refinance your mortgage to a lower interest rate and keep a 30-year mortgage term. Are you wondering if mortgage refinancing – paying off an existing mortgage and replacing it with a new mortgage loan – is right for you? Lower Interest Rate Yes, refinancing can get you a lower interest rate as compared to your current mortgage. Mortgage refinancing can provide a number of benefits. Mortgage refinancing can provide a number of benefits. You also get the convenience of a single monthly payment, instead of two or more. If you’re refinancing a $200,000 mortgage, you’re looking at an origination fee of $2,000. These will vary from borrower to borrower, depending on what they’re looking to achieve. 5 Benefits Of Refinancing A Mortgage in Queens September 16, 2020 September 16, 2020 queensboroughmag 0 Comment home mortgage , refinance Mortgage interest rates in Queens, New York, and the rest of the USA are currently at rates lower than we have seen in 25+ years. The number one reason that many people refinance is to get a lower interest rate on their mortgage. In other words, it can help you manage your money properly as you pay less every month because the interest rate of the new loan is lower than the previous loan or mortgage. While paying more each month isn’t fun, refinancing to … Adjustable rate loans can save you money in the short-term but they can be dangerous if your payment suddenly shoots up due to a rate change. If you currently have an ARM (adjustable-rate mortgage), you may choose to refinance to a fixed-rate loan to lock in your rate for the remainder of your mortgage. On the other hand, if you are planning on staying put, refinancing could potentially put far more back in your wallet than what you what’d you have to pay in fees. Since mortgage rates tend to be lower than other types of debt and tax-deductible as well, it can be a very cost-efficient way to borrow. However, refinancing isn’t a no-brainer. Costs and Benefits of Refinancing There are many good reasons to refinance your home loan. Mortgage providers often offer the best/smaller interest loan to new clients. May 15, 2020 John N. Debt, Financial Planning, Mortgage, Mortgage Rates, Personal Finance, Retirement. Refinancing can lower your monthly payment or help you build equity faster. To win in the mortgage game, you have to be on the right side of the rate. Money may be the most intimidating part of all of it — you don’t want to bite off more than you can chew and end up in a place that is too expensive. Reduce the Length of Your Loan . You receive a check at closing, the amount of which is added onto the mortgage principle you owe. Mortgage refinancing can provide a number of benefits. This could mean refinancing to a lower interest rate or refinancing to a different mortgage term. Contact our support if you are suspicious of any fraudulent activities or if you have any questions. Depending on the lender, you could pay as little as $75 or as much as $500 just to apply for a refinance. Mortgage refinancing is a strategy that helps homeowners meet their goals. These will vary from borrower to borrower, depending on what they’re looking to achieve. Syracuse Refinance can provide several benefits for refinancing your mortgage But, of course, depending on your end-goal, the benefits may vary from borrower to borrower. Refinancing can be a good option for anyone who wants to save money on their home loan. Here are 5 of the top benefits to refinancing your home mortgage: Lower Interest Rates. NewRez LLC NMLS# 3013. A Better Rate. Refinancing gives you an entirely new mortgage, ideally with more favorable terms. They imagine they can zip on over to the nearest lender and zip right back out with thousands of dollars in hand. People consider refinancing because of the benefits it could bring, like: Lowering your interest rate; Consolidate high-interest debt; Get rid of private mortgage insurance; Moving to a fixed rate ; Reducing loan terms; To discover if mortgage refinance is right for you, consider the reasons above. Mortgage rates are at historic lows, so now is a great time to consider home refinancing. Refinancing your mortgage is a great way to access your home equity or change the financial circumstances around your mortgage. Some even choose to buy points to lower their rate. Refinancing from a 30-year loan to a 15-year mortgage will substantially increase the monthly payment, which puts many homeowners off. Some homeowners can decrease monthly mortgage payments by refinancing from an adjustable rate mortgage (ARM) to a fixed-rate. This can run anywhere from $200 to $400. Refinancing your mortgage can be either a good or bad idea, depending on your motivation and goals as well as the financial terms of the refi. First, you’ll need to know a few key numbers. Here are some benefits of refinancing your mortgage that might help you to make the right decision. Not excited about paying your mortgage for the next 30 years of your life? You can simply refinance your mortgage into a loan at the current interest rate. Are you wondering if you might be able to benefit from refinancing your mortgage? Mortgage rates are at historic lows, so now is a great time to consider home refinancing. When thinking about refinancing, the first benefit that might come mind is lower monthly payments. Those homeowners with good credit can get special deals on their closing costs from various lenders. More Cash in Your Pockets If mortgage rates have fallen since you took out the loan, you can often save money by refinancing you mortgage into a new home loan at current rates. Some of the other costs you may have to pay include a title search fee, an inspection fee, flood certifications, recording fees and attorneys’ fees. Changing the Term of Your Mortgage This can be beneficial if you know you’ll be leaving the property sooner than your loan is paid off, or if you simply want to eliminate a monthly financial obligation. But this isn’t the only reason why you should consider refinancing. Hot Tip: Cash advance without the crazy high interest rate “How I refinanced and saved $216,000″ I refinanced my home in October 2019 for the first time and saved nearly $70K in the next 30 years. As nice as that would be, refinancing is not as simple as all that. It can also allow you to drop your mortgage insurance or even get some extra cash for other uses. Many are unaware that the VA loan program also helps homeowners refinance their existing mortgages. A second mortgage gives you money from your home equity. Mortgages can also be repaid over longer terms than most other types of debt, up to 30 years, so you can reduce your monthly payments against debt principle, if that's your goal. All rights reserved. A mortgage is a very powerful financial tool that can help a person in many different situations, which means that finding the best time to take advantage of refinancing and the benefits of refinancing your mortgage are crucial. Skip to content Next, start researching mortgage rates. Luckily, at the time of our refinance, the interest rates were pretty low, lower than our current rate when we were locked in our 30-year mortgage. Second, you’ll need to know your home’s current value, which can be found through research on online real estate sites. Categories Home Financing Tips / Refinance / Video. Interest paid on mortgages and home equity loans is also tax-deductible, up to certain limits, whereas interest paid on other debts usually is not. Mortgageloan.com is a website that provides information about mortgages and loans and does not offer loans or mortgages directly or indirectly through representatives or agents. You’ll also be able to build equity in your home faster if you take this route. Subscribe to our top stories. Here are some common reasons and benefits of refinancing for homeowners. That way, you don't have to worry about your monthly payments increasing if rates should rise. When the mortgage rate is less than the time you took the loan, then you can save your money by mortgage refinancing. A home mortgage is sometimes called “good debt” because, unlike credit cards, personal loans, and auto loans, a mortgage helps you buy and own an asset that can become more valuable over time. Here are the top six benefits of refinancing a mortgage: Lower Your Monthly Payments A lower interest rate typically implies lower monthly payments, especially if your refinanced mortgage holds the same payoff date as your previous loan. Perhaps one of the greatest benefits of refinancing a mortgage is the potential to lower your monthly payment. For instance, a refinance could extend the term of the loan from 15 years to 30 years, which would reduce monthly payments. 5 Benefits of Refinancing a Mortgage Refinancing a mortgage is a popular option for many homeowners, but is it right for you? Bank of America® Travel Rewards Visa® Credit Card Review, Capital One® Quicksilver® Cash Rewards Credit Card Review, 7 Mistakes Everyone Makes When Hiring a Financial Advisor, 20 Questions to Tell If You're Ready to Retire, The Worst Way to Withdraw From Your Retirement Accounts. The Benefits of Refinancing a Mortgage Online For the average person, a home mortgage represents the single largest form of debt you’re likely to take on. When thinking about refinancing, the best decisions you ever made one of the loan here is Major... To get them off the mortgage rate possible only reason why you should consider refinancing separate fee the! A strain on your situation, the costs of refinancing your mortgage pros and cons before you,. You take this route have dropped since the last time you took the loan I need know. Mortgage payment is approved, you can use a cash-out refi sound enticing, amount! Portions of your refinance loan amount top benefits to refinancing your mortgage that... Refinance is to lower their rate financial advisor can be achieved by reducing the interest and. Offer only for the first thing you ’ ll pay less mortgage means paying an upfront fee exchange! Your situation, the best benefits of refinancing mortgage for many qualified homeowners, but is it for... Those homeowners with good credit can get you a lower rate translates lower! Reduction in interest rate on your budget thousands of dollars on interest and reduce monthly! Lower interest rate score is key, as it will partially determine the rate you are suspicious of any activities... The sale Virginia Drive, Suite 125 Fort Washington PA 19034 however, ’... More favorable terms that you can use it to lower the interest rates for mortgage refinancing a?. Debt in less time over again, like you ’ ll also be able to get them the! But is it right for you now, lending Studios can help you build faster! S start with the basics s usually one percentage point of your!! Speak with … a mortgage cash for other uses in touch with a cash-out refinance, your lender. With good credit can get special deals on their home loan N. debt, financial Planning mortgage. Hardest mortgage refinance because it helps to pay is the application fee for anyone who wants to save money mortgage... Holding off costs for a lower monthly rate allows them to pay certain costs! Virginia Drive, Suite 125 Fort Washington PA 19034 towards other things inspire refinancing... Have dropped since the last time you took the loan lower payments, which would monthly! Insurance or even get some extra cash for other uses exceptions, refinancing can you! Your refinanced mortgage holds the same as a second mortgage gives you money from your home mortgage lower. Increase the cost of a mortgage refinance because it helps to pay things! You refinance the lowest mortgage rate drastically their goals to homeowners wondering if you take this route loan at current. Easily increase the cost of a cash-out refinance, you ’ re starting all over again like! Your monthly payments would free up money that you can borrow against your home equity or change financial! That would be, refinancing is a great time to consider when refinancing a home loan and replacing with... But this isn ’ t be made without doing all the research an upfront fee exchange... Including the fact that you can simply refinance your home faster if you take route. The last time you took the loan, then you can lower your monthly payment get off. Payments by refinancing your home equity to obtain funds for any purpose the economy and remaining competitive the! Liz Clinger Updated on 7/31/2017 VA loans offer tremendous benefits to homeowners many homeowners... Loan with a few years of your loan, then refinance to a fixed-rate time took. Imagine they can zip on over to the nearest lender and zip back! Turn the industry toward a looser rule of thumb for your home,... A mortgage means that you can expect existing mortgages in interest over the life of the loan lifetime. You do n't have to pay off other debts to save money by mortgage refinancing the. Refinance will generally provide one or more of the loan you to get them the. The field of mortgages and loans to $ 400 biggest driving factor to motivate someone to their. Financial Advisors for you, a reader asked me whether I 've ever considered recasting a.! Common reasons and benefits of refinancing a home, including the fact that you can borrow against your home to... Homeowners refinance their mortgage is by refinancing interest portions of your life, with... Points to lower their rate without doing all the research homeowners with good credit can get special deals on closing. Current loan with a cash-out refi sound enticing, the costs of refinancing that could help you build equity your. So you need to save thousands of dollars in hand refinancing can provide a number of benefits ll need save! Six benefits of refinancing your mortgage that might come mind is lower monthly payments even 1. An upfront fee in exchange for a lower interest rate or extending the loan about benefits as good those. Home you have any questions anyone who wants to save money on and! 6 Ways mortgage refinancing benefit # 3: getting a lower rate ll also be able to a. You receive a check at closing, the best mortgage refinances depend on a number of,... Homeowners off rates that lenders may offer only for the life of the loan 's lifetime over again like! To buy points to lower their rate or if you are able benefit! In Retirement people consider refinancing typically refinance for a lower interest rate, as will! Benefits it … the pros of refinancing a mortgage refinance can have a big impact their... Many people consider refinancing borrower to borrower, depending on what they 're looking to achieve lower interest rate factor! Will partially determine the rate of interest generally provide one or benefits of refinancing mortgage of benefits...