There are many good reasons to refinance your mortgage. However, the way the economic map looks today what reasons are the best for these times?
1. Reduce High Interest Debt
Most people these days have a lot of high interest debt for example, consumer credit accounts, credit cards and vehicle loans. Some should want to refinance their mortgage and use the money they get from it to payoff these debts.
Mortgage loans today are carrying low interest rates but these types accounts carry very large interest rates and fees to boot. If you live in one of the many areas of the country where your home values were not falsely inflated you property value may have gained in equity and now may be the time to make use of the cash.
Putting all that debt in one place by consolidating it into a mortgage with a low interest rate will give more room to take advantage of opportunities to put some cash away in these fluctuating economic times.
2. Lower Your Rate
Getting a lower interest rate than you got when you borrowed is a great benefit for those that refinance in these times. It may even lower the amount that you are paying over all for your loan. Chances are that interest rates are a lot lower now than they were when you financed your home.
A rate change of only a few points could take hundreds of dollars of your payments and thousands off what you will pay for your home in the end. If you have the credit rating now is a great time to take advantage of what is out there interest wise for home owners.
3. Dump The Adjustable Rate
Switching from your adjustable interest rate mortgage to a fixed interest rate mortgage is a good move also.
If you jumped on the adjustable rate mortgage bandwagon in the early part of the decade this is your opportunity to jump off the roller coaster.
With the adjustable rate mortgage your payments are almost unpredictable and this fluctuation scan wreak havoc on a budget. Refinancing your mortgage now could bring some stability back into your financial situation.
4. Repay Your Mortgage Faster
You may want to payoff your loan faster, refinancing to a shorter term will do that and help you with this. You will have a higher payment then you do now but the loan will clear faster. Interest rates are low now so refinancing may not cause your payment to increase significantly.
5. Consolidate
More than one mortgage can be a real drag on your budget these days. What looked like a great rental property 7 years ago is now a financial anchor. By refinancing now at lower rates you pull up that anchor sail of with some extra money in your pocket also.
