Are you contemplating refinancing your current mortgage? With interest rates treading at historic lows, now is the time to enjoy better value for your money by refinancing. In case you are unhappy with your current lender, you’ll be glad to learn that you are free even to approach a different mortgage lender while refinancing that home loan.
Here is why you should consider refinancing your existing mortgage before the current mortgage rates rise and shut out your refinancing opportunity:
✅ Lower Your Interest Rate and Monthly Payments
Keeping an eye on the current interest rates will reveal that you can enjoy big savings as a homeowner through a rate-and-term refinance. With interest rates remaining extremely low, borrow is now less expensive.
If you have an adjustable-rate mortgage (ARM), refinancing to get a reduced interest rate will allow you to save on interest costs and reduce your monthly home loan repayments. Reasonably, refinancing into a new loan with a lower interest rate will mean lower monthly payments over the life of your new loan.
✅ Consolidate Your High-Interest Debt
Suppose you are troubled about accumulating high-interest in your personal debt obligations, car loans, or even your credit cards. In that case, a home refinance could help consolidate your credit obligations.
With lower interest rates than most credit cards and other consumer debt options out there, a home refinance will help you consolidate existing credit balances into a single, manageable payment. What’s more, a cash-out refinance is not off your cards. Take cash out of your refinancing by tapping into your equity to get some money back for other things at a lower cost.
Through cash-out refinancing, you can even create a cash cushion for yourself and family during these uncertain economic times, improve your cash flow, or pay off your impending bills.
✅ Pay Off Your Mortgage Faster
Perhaps you are looking to reduce the term of your current mortgage, pay off that mortgage loan more quickly, and own your home mortgage-free sooner. The best way to do this is by refinancing to a short-term mortgage now that the interest rates are down.
Though the switch from your current mortgage to a shorter loan term means you will be paying significantly more, it makes a lot of sense to pay higher monthly payments now that mortgage rates are extremely low and shorten your repayment period. Depending on your situation financially, a home refinance professional will recommend the right move for you.
However, at this time, shortening your loan term should save you vast amounts in the total interest costs you would have paid over the life of a longer loan term.
✅ Switch to A Fixed Mortgage Rate
If your original adjustable-rate mortgage loan is nearing expiry, you should consider refinancing to a fixed-rate mortgage. Considering that the interest rates on fixed-rate mortgages are more attractive than those on adjustable-rate mortgages right now, this is a perfect chance for you to switch to a fixed-rate mortgage whose low-interest rates are locked for the next 10 or 15 years.
A mortgage with an ideal rate should give you the peace of mind that comes with knowing that your loan’s mortgage rate and monthly payments will not be changing in the future.
✅ Get Rid of PMI
If you’ve been carrying a private mortgage insurance (PMI) and you’ve now broken even on the Federal Housing Administration’s requirement of having mortgage insurance, eliminating the extra expense right away will be a great move.
Get better rates by refinancing your existing mortgage to a short term loan once you’ve gotten rid of your private mortgage insurance. In order to get rid of your PMI, you are required to raise equity in your home to at least 20 percent or settle the mortgage balance to 80% of the original appraisal value of your home.
✅. Your Credit Score Has Improved
Often taking a mortgage loan when you have a low credit score means that the mortgage facility you receive comes with higher interest rates. If your credit score has significantly improved since you took out your mortgage, you should consider carrying out a home refinance since you might qualify for more favorable rates amid the all-time low-interest rates.
Refinancing now will see you save more due to lower monthly payments and more flexible repayment options.
With interest rates at all-time lows, now is the perfect time to take advantage by refinancing your mortgage. Unsure if it’s the right move for you? By doing some quick math, you will discover that refinancing that home right now is a worthwhile endeavor for you.
Ready to refinance? Bayou Mortgage is here for you. We’ll be your guide and make sure you are getting the best mortgage refinance rates possible. Be sure to check out our competitive home refinance rates and see how much you can save.
For more information and to get started, reach out to us today through 337-476-2623.