Have you been thinking about refinancing your home mortgage this year? Mortgage enterprises Fannie Mae and Freddie Mac, which buy most of the conventional mortgages from lenders, predict continuing low interest rates throughout 2020. If you refinance your 30-year fixed rate or adjustable rate mortgage (ARM), you could lower your monthly payments, reduce the total amount of interest you pay, or potentially take cash out of the equity in your home to achieve financial goals, pay for education costs, or do home improvements.
It may seem like a big change to refinance your mortgage, but if you can reduce your mortgage interest or monthly payment, it could be a sound financial choice. And it is your choice. Did you know that in Canada, mortgages are refinanced every five years whether the owners want to refinance or not?
Instead of having to refinance every five years like they do in Canada, here in the U.S., you don’t have to refinance at all. Instead, you can take time to review your financial options and decide when and how to refinance your home mortgage. So, what are some of the reasons you might want to refinance your 30-year fixed rate or 15-year fixed rate home loan?
- Lower your monthly mortgage payments
- Lower your mortgage interest rate
- Change your loan type or program
- Eliminate mortgage insurance
- Get money for home improvements or repairs
- Pay off high interest debt
You have many choices to refinance your home mortgage, and you can achieve a variety of financial goals through refinancing. At the same time, it’s important to understand how refinancing will impact your finances.
Some of the factors that can affect the total cost and long-term impact of mortgage refinancing can include:
- How long you’ve lived in your home
- How much debt you have and what type (student loans, credit cards, medical debt)
- Closing costs
- Mortgage prepayment penalties
- Your credit score
- Equity in your home
Every financial situation and refinancing is unique, and you can prevent mistakes and make the right financial decisions by working with an experienced home mortgage refinancing professional. Not only can they offer you a choice of lender and mortgage refinance programs, they can tell you about opportunities you may not be aware of and spend the time needed so you can make a fully informed and wise refinancing choice.