going from a 15-year to another 15-year mortgage). Benefits of Refinancing Your Mortgage. Ask our Home Buying expert. The ARM mortgage starts with fixed-rate for an initial period, which could be could be three, five, seven, or ten years. While these potential benefits of a cash-out refi sound enticing, the best mortgage refinances depend on a number of personal factors. A home mortgage is sometimes called “good debt” because, unlike credit cards, personal loans, and auto loans, a mortgage helps you buy and own an asset that can become more valuable over time. 1100 Virginia Drive, Suite 125 Fort Washington PA 19034 . If you can get a lower rate, it’s always worth looking into refinancing your mortgage, particularly if your term is the same (e.g. You also get the convenience of a single monthly payment, instead of two or more. Neither VA streamline refinancing, FHA streamline refinancing or USDA streamline refinancing require it, as long as you meet the additional criteria to forego the appraisal process. Refinancing gives you an entirely new mortgage, ideally with more favorable terms. Are you wondering if mortgage refinancing – paying off an existing mortgage and replacing it with a new mortgage loan – is right for you? Refinancing can lower your monthly payment or help you build equity faster. This could mean refinancing to a lower interest rate or refinancing to a different mortgage term. But before we deep dive into the benefits, let’s start with the basics. Once you decide to refinance your home, there are a few steps you’ll need to take to actually get the ball rolling. This allows them to pay the mortgage off faster and save a lot of money in interest over the life of the loan. SmartAsset can help with our mortgage tool. One of the main benefits of refinancing to a 15-year mortgage is that you will pay less in interest over the life of the loan. Mortgage refinancing can provide a number of benefits. Refinancing involves swapping your existing mortgage for a new one with more favorable terms. But before we deep dive into the benefits, let’s start with the basics. The Bottom Line: When It Makes Sense to Refinance Your Mortgage and Its Benefits First, you’ll need to know a few key numbers. Refinancing Cons. For instance, a refinance could extend the term of the loan from 15 years to 30 years, which would reduce monthly payments. Or perhaps your credit situation has improved, so you're eligible for a lower rate. The most obvious benefit and the biggest driving factor to motivate someone to refinance their mortgage is to get a lower interest rate. 3 Major Benefits You’ll Enjoy from Refinancing Your Mortgage to a 15-year loan. Generally, when you buy a home you have to pay certain closing costs to complete the sale. The reason for this is that since everything else is remaining constant, if your rate goes down, your base monthly payment (not including taxes and homeowners insurance) will go down. You can also combine a second mortgage or HELOC (home equity line of credit) into a single primary mortgage at a lower rate. MortgageLoan.com® is a registered service mark of Mortgage Loan Directory and Information, LLC. There's no magic here. Check out these benefits of refinancing to decide if it’s the best option for you. If you’re refinancing a $200,000 mortgage, you’re looking at an origination fee of $2,000. The only way to get them off the mortgage is by refinancing. This is like a cash-out refinance, but because you're using it to pay off secondary mortgages, you're not reducing your home equity, other than for any closing costs you might roll into the loan. A Better Rate. This can run anywhere from $200 to $400. On the other hand, if you are planning on staying put, refinancing could potentially put far more back in your wallet than what you what’d you have to pay in fees. Quicken Loans Mortgage Review; Bank of America Mortgage Review; Navy Federal Credit Union Mortgage Review; Chase Mortgage Review; Embrace Mortgage Review; All Mortgage Lenders; Learn more. NewRez LLC NMLS# 3013. One of the biggest perks of refinancing is paying less each month. Refinancing your mortgage not only fulfills the purpose of lowering the interest rates, but it also gives you more room to borrow money from your home equity in case you need to pay for emergency bills – be it to consolidate debts or cover for medical expenses. Benefits of Refinancing your Mortgage Each homeowner may have different goals for their mortgage. By refinancing your mortgage, you can replace your current loan with a new mortgage bearing better terms. These will vary from borrower to borrower, depending on what they're looking to achieve. May Reduce Your Payment . But this isn’t the only reason why you should consider refinancing. Lower Interest Rate Yes, refinancing can get you a lower interest rate as compared to your current mortgage. But this isn’t the only reason why you should consider refinancing. Many benefits can come with refinancing your mortgage. Refinancing is basically replacing the existing mortgage with a new debt obligation.This new loan offers better terms to help improve the finances of the homeowner. There are several factors to consider when refinancing a mortgage, and the pros can be really appealing. Reduce the Length of Your Loan . Changing the Term of Your Mortgage This is … Keep reading to discover seven refinance benefits. Learn more about refinancing … There may be certain benefits of refinancing a home loan such as: . Hi and welcome to the forums Cassie. This can benefit borrowers in many ways, such as lowering monthly payments or shortening a mortgage’s term to pay it off sooner, just to name two. Refinancing your mortgage could reduce the principal and interest portions of your mortgage payment. If mortgage rates have fallen since you took out the loan, you can often save money by refinancing you mortgage into a new home loan at current rates. If you have lender-paid mortgage insurance, you can refinance once you reach 20 percent equity to eliminate the premium that's built into your interest rate. Refinancing to a fixed-rate loan helps you avoid any nasty surprises in both situations. Adjustable rate loans can save you money in the short-term but they can be dangerous if your payment suddenly shoots up due to a rate change. These will vary from borrower to borrower, depending on what they're looking to achieve. Rebecca Squyres. There are many reasons why people choose to refinance, but how they refinance can have a big impact on their future financial situation. For one thing, whenever … Lower monthly payments can be achieved by reducing the interest rate or extending the loan's lifetime. Depending on your situation, the costs of refinancing could outweigh the benefits, so you need to know what you can expect. This can also be used to remove the name of a co-signer whose support is no longer necessary and wishes to be freed of liability. Benefits of Refinancing by GMFS Mortgage. You receive a check at closing, the amount of which is added onto the mortgage principle you owe. Reducing the interest rates and bringing down the overall mortgage amount saves money for the homeowner. Depending on the lender, you could pay as little as $75 or as much as $500 just to apply for a refinance. Refinancing is the process of trading your existing loan for one with a better interest rate, lower payment, shorter term or all three. In many cases, you’ll see a smaller monthly payment if you refinance your mortgage to a lower interest rate and keep a 30-year mortgage term. So if you’re refinancing a $200,000 mortgage at a new interest rate of 4.25%, you could pay $2,000 for 2 points and reduce your rate to 3.75% on the new mortgage. Certain lenders will charge you for paying off your mortgage loan early even if you’re refinancing. So it makes sense that you should think hard about the loan product you’re currently using and whether you might have an opportunity to refinance on more comfortable terms. There are a number of advantages to refinancing, but the process isn’t without certain drawbacks – especially when it comes to the fees involved. Many borrowers start out with a 30-year home loan, then refinance to a 15-year fixed-rate mortgage after a few years. 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