Q: I’ve heard that mortgage rates have dropped dramatically since the start of 2019. Should I refinance my mortgage loan to take advantage of these lower rates?
A: Refinancing a mortgage is essentially paying off the remaining balance on an existing home loan and then taking out a new mortgage loan, often at a lower interest rate. Now is a great time to take out a new mortgage, and if you’re looking to save money or free up additional funds, there are many reasons why a refinance could benefit you! Here are a few of them:
Lower Interest Rate
The first and most obvious reason homeowners refinance their mortgage is to take advantage of a lower interest rate. The drive behind this reason might be a change in finances, personal life, or simply the desire to save money. If you have a mortgage with a higher interest rate, refinancing can help you pay off your loan in half the time without changing your monthly payment much.
Shorten the Life of the Loan
This leads us to the next reason people choose to refinance their mortgage. Many homeowners refinance because they want to finish paying off their loan sooner. Whether this is done with a lower interest rate or to simply shorten the life of the loan with new terms, you can save money on interest and potentially on your payments.
Sometimes, homeowners choose to refinance to tap into their home’s equity and get their hands on a large sum of cash. Cash-out refinances area great idea if you need some cash for a home renovation, have a large upcoming vacation, or to pay for your child’s college tuition. You can even use the cash to help consolidate your debt and cut down the number of payments to keep track of. With all these reasons, it is clear that refinancing your mortgage can be advantageous. If rates are currently lower than your original rate or if you have improved your credit, a refinance could be very beneficial for your wallet. It can help you build more equity in your home sooner, decrease the size of your monthly payment and, of course, save you lots of money overall. To learn more about a mortgage refinance so you can do more of what you want to do, reach out to our Wasatch Peaks mortgage specialists! Get started by contacting our specialists at 801-627-8700 or by visiting your local Wasatch Peaks branch.