With today’s low interest rates many existing homeowners are looking into their mortgage refinance options. Yet many still wonder “what is a mortgage refinance?” and more importantly is it right for you.
A mortgage refinance can be described as – a new loan to pay off your existing mortgage. Refinancing a mortgage therefore simply means replacing an old mortgage with a new one.
Should You Refinance?
There’s no simple answer to this question, as each homeowner’s situation has certain variables. These factors are dependent on your situation, priorities and preferences. Generally, however, most existing homeowners decide to refinance if you can save money and lower your interest rate.
There are two major benefits to Refinancing:
Lower interest costs: If you are refinancing an existing loan with a lower interest rate, then you can save on interest rate payments and, if reasonable, be able to make more payments towards the principal, increase your equity at a faster rate and pay your loan much earlier.
Lower future interest costs: If you have a mortgage with an increasing variable rate of interest, then you can gain savings on future interest rate payments through refinancing your mortgage with a fixed-rate loan program. By doing this, you’ll be able to maintain a low mortgage interest rate and keep it from rising. This can also help with planning your monthly household budget.
Where to Start?
When you refinance, make sure to compute the costs of a mortgage refinance and compare it with your projected savings. The best way to begin looking into a mortgage refinance is to contact Nations Choice Mortgage to review your options. Our highly trained loan specialists will help guide you through the initial process of determining which option is best for your situation. Contact Nations Choice Mortgage for more information and to get started.