What a Refinance Mortgage Can Do For You
Why a refinance mortgage may be your best bet.
Considered a refinance mortgage lately? You may want to! There are a number of reasons why one would want a refinance mortgage. I’m Max Anderson and I’m going to review some of the top reasons why you might want to consider a refinance mortgage for your financial needs.
Lowering Monthly Payments
A refinance mortgage is a great way to lower your monthly mortgage payments. Let’s say that you currently owe $100,000 on your mortgage but you only have 20 years left to pay on a 30 year mortgage. If you refinance that mortgage over 30 years instead of 20, your monthly payment could drop considerably.
While it may not be ideal to refinance your mortgage for a longer period of time, a refinance mortgage can really come in handy if you just can’t make your monthly mortgage payments at the rate they are currently.
Lowering Your Interest
One of the most common reasons that people pursue a refinance mortgage is to lower their monthly interest rates. If interest rates are at least one percent lower than the rate you are currently paying, a refinance mortgage may be in your best interests.
Even at just a one percent difference, a refinance mortgage can save you tens of thousands of dollars. For example, if you were paying $100,000 off at 7 percent over 30 years, you’d pay a total of $239,508. However, if you were paying that loan off at 6 percent, you’d pay a total of $215,838, a difference of $23,670. That’s quite a bit of money that a refinance mortgage can save you.
A cash-out refinance mortgage is another reason that people pursue a refinance mortgage. With a cash-out refinance, you can refinance your home at a different interest rate and you can also get cash for the equity in your home. This type of refinance mortgage can enable you to make necessary home repairs or home improvements or you can use the money for debt consolidation or other financial needs.