Top 4 Financial Benefits When Obtaining The Right Home Refinance Program
Whether it's not the right market for selling your home or you simply want to remain in your home for a long period of time, a home refinance offers multiple financial benefits to homeowners. In fact, refinancing can free up money for other things, such as a vacation. It can also help you with your long-term savings goals. Below is a list of four financial benefits associated with this type of loan.
Lower Monthly Payment
Homeowners who have paid down their mortgages over the course of several years will find that a home refinance leaves them with a lower monthly payment. This is because the new loan is based on the lower principle amount. That lower figure is also spread out over the course of 30 years, unless you wish to opt for a shorter term.
Improve The Value of Your Home
When you refinance your home, you have the option of taking cash out. Homeowners can use these funds to make improvements, such as adding an extra bedroom on to the home, updating the kitchen with a more modern design, or installing solar panels on the roof. Then the home will be worth much more years down the road when you decide to sell it, which is one way to meet your long-term financial goals.
Convert to a Fixed Rate
Anyone with an adjustable interest rate can also save over the long run by refinancing to a fixed rate. This is especially a good idea when interest rates are low because you'll be able to lock in a great fixed rate. If you wait, your adjustable interest rate is sure to rise year after year, which increases the amount of the mortgage payment you need to make each month. This could be anywhere from a few dollars a month to a few hundred dollars a month.
Pay Off the Mortgage Sooner
One reason to refinance is to take a shorter loan term. Instead of the traditional 30-year loan, refinance to a 20 or 15-year loan. This makes sense if you have the extra money to put toward your monthly mortgage payment because it will save you big time on interest. This means you'll shell out less money by the end of the loan, which would leave you with a home that is free and clear of any debt when you retire.
Always take the time to write out your goals when considering a home refinance. If the loan would make more financial sense, call up a lender, like those at Best Rates Mortgage, LLC home loans, and discuss your aspirations with him or her. Find out what current programs are available and how you can best make use of one.