Refinancing My Mortgage – Top Reasons To Consider A Refinance

Whether it is obvious to you about why you might refinance, there are quite a few people out there who are homeowners asking themselves about refinancing my mortgage who don’t actually know for what purpose they would or could refinance their home mortgage.
So, we decided to put together a brief list of reasons to refinance your mortgage in case you needed some ideas.

Reasons For Refinancing My Mortgage

Lower Your Interest Rate

Probably by far the biggest reason for refinancing your mortgage is to lower your monthly payment. If you bought your home a few years ago you probably have a higher interest rate on your home mortgage than the current market rates of 2010.

If you haven’t checked out the current refinance mortgage rates to compare to your mortgage then it is time to do so. By lowering your interest rate you’ll most likely lower your monthly payment which would give you more money to do other things with like save more into your Roth IRA for example.

Cash out Your Equity

This is important if you want to put the equity that you have in your home to financial work. Equity in your home is determined by the difference between your home’s appraised value and the amount of your mortgage.

For example if your home is worth $200K but your mortgage balance is $140K then you have $60k in equity. It is possible to pull some of this money out of equity by refinancing your current mortgage. Your new mortgage would say then have a balance of $170K which would leave you with $30k in equity and $30k in your pocket to use for investing, paying down debt, paying college tuition, making home improvements or any number of other reasons.

Get Into A Fixed Rate

If you were someone who bought their home a few years ago and took an adjustable rate mortgage you may be sweating what the market is going to be doing in the future. Sure right now (in 2010) you look like a hero because your payments are pretty darn low given mortgage rates are very low.

But what happens to your adjustable rate mortgage as rates go up – yep – your payment goes up too. However if you were to refinance with the rates where they are now, you could lock in a lower payment for life with a fixed rate mortgage refinance. You could literally kill two birds with one stone on this one – ensure a lower payment for the future and relieve some of your rate adjustment anxiety.

If you are looking to see if you qualify for refinancing your mortgage please complete the form below.