Refinancing
Refinancing
can have many benefits; including lowering your monthly payment, shortening
the term of your loan, changing that adjustable rate to a fixed rate,
being able to take cash out of the equity in your home, and eliminating
your Private Mortgage Insurance (PMI).
Refinancing
is generally a good option for you if can drop your current interest
rate by 1% or more. This will lower your monthly payments, and
allow you to have more cash on hand. You can also do a cash-out
refinance where you receive cash from the equity in your home, and you
might be able to get a lower interest rate at the same time.
You
can shorten the life of your loan by refinancing. An example of
this would be if you have been paying a 30 year mortgage for 8 years,
you could refinance to a 20, 15, or 10 year loan. You will be
able to pay off your mortgage sooner and eliminate your debt faster.
Refinancing
allows you to change your adjustable rate that keeps you guessing about
your next monthly payment to a fixed rate loan where your rate and payment
will stay the same throughout the life of the loan. You will also
be eligible to cancel your PMI payments if the equity in your home has
reached at least 20% of the total value of your home.