You might choose to get a mortgage refinance to lower your monthly payments, to pay off your home loans faster, or to take advantage of the equity in your home. Ultimately, the decision to refinance your mortgage depends on many factors, including your personal goals. Refinancing your mortgage may seem like the right thing to do based on the current market conditions or what you may have heard from others in your life. However, when you are deciding whether or not to refinance should be based on what makes the most sense for you financially.
What Is Refinancing?
Refinancing refers to the process of replacing your current mortgage loan with a new loan, usually from a different lender. The new loan usually has different terms than the original. Typically, the new loan offers a change in loan terms, lower interest rates, or a change in loan type.
You might consider getting a mortgage refinance for the following reasons:
Lower Interest Rates
There are many reasons to refinance your home. One reason is that you might be trying to save money. If interest rates have decreased since you first bought your home, refinancing gives you the option to replace your current home loan with a new one at a much lower interest rate. With the right terms, refinancing can allow you to lower your monthly payments by paying less interest or erasing high private mortgage insurance (PMI). The decision to refinance can possibly save you money over the duration of the loan.
Change in Loan Terms
Choosing to refinance may mean an opportunity to change your loan terms. When you originally bought your home, you may not have had the best bargaining chips. Therefore, you may have gotten a loan with an unfavorable term. If you can afford higher monthly payments, refinancing might be the chance to switch from a longer-term loan (e.g., 30 years) to a shorter-term loan so you can pay off your mortgage in a shorter period, and over time, save on your interest payments.
Take Advantage of Home Equity
The process of taking out the equity on your home is more commonly known as cash-out refinancing. This type of mortgage refinance allows homeowners to refinance their existing mortgage while accessing some equity if they need extra cash. This might be an option for you if there is a need for extra cash in your household. For example, you may want to consolidate debt or pay for home renovations or other large expenses.
The option to refinance your mortgage can provide many financial benefits. However, it is recommended that you consult a qualified professional who can provide personalized advice for your current situation so you may know for sure if refinancing is right for you.
Talk to Mortgage Refinance Experts in Sacramento, CA
The experts at Anew Lending have been serving residents of Sacramento, CA, and surrounding areas for many years. Our team of experts is here to help you with your mortgage refinancing needs. Call us today at (916) 655-9325 to find out what options may be the best fit for you!