Lower Your Interest Rate
Refinancing May Be a Good Choice
- Homeowners wish to save money with lower monthly payments. Monthly payments are reduced with a lower interest rate or if the length of the loan is increased. Keep in mind by refinancing your existing loan, the total finance charges may be higher over the life of the loan.
- Homeowners want to eliminate debt faster by paying off their mortgages quickly. Monthly payments increase, but homeowners save in the long run on overall interest payments on the debt.
- Extra cash is needed to pay off credit card debt or other loans. Mortgage interest is tax deductible, while credit card and other loan debts are not.
- Homeowners would like to consolidate two loans into one. If there is enough equity in the home, homeowners can combine loans into one loan. This situation is usually a better debt solution than combining payments on a first and second mortgage.
- Conversion of an adjustable rate mortgage (ARM) into a fixed rate mortgage (FRM). Staying in an ARM subjects a mortgage to variable interest rates, while obtaining an fixed rate mortgage allows homeowners to lock in at a lower rate for the life of the mortgage.
- Homeowners want to eliminate private mortgage insurance (PMI). Homeowners no longer have to pay PMI payments if the current loan balance is below 80% of the new appraisal for the home.