Most of the time refinancing will change your economic position for the better. It can
- lower your payments,
- put some cash in your pocket to pay off high interest debt,
- get rid of PMI,
- help you pay off your loan faster,
Here are some facts that will make mortgage refinancing a good idea.
You may want to have your monthly mortgage payments lowered by getting a low interest rate.
Maybe you have two mortgages and your home increased in value and you want to combine the two loans to make it easier on your budget. This will help you pay them off faster also.
You want to have the same payment month in and month out so you can plan your budget better you can do this by refinancing your adjustable rate mortgage into a fixed rate mortgage.
Take cash out of your home to fix up your older home, get rid of high interest debt, start a business, make some investments or take a vacation.
If your equity is growing quickly and you want to take advantage by paying your loan off quickly and owning your home free and clear.
Here are a couple of myths that homeowners here that keep them from taking full advantage of refinancing their home mortgage loans.
You can only refinance your mortgage after being in your home for two years or more.
Some mortgage companies can refinance your mortgage sooner and in some cases you can take advantage of any equity you have earned. You can switch from an adjustable interest rate loan to a fixed rate loan, get cash out, pay off your second mortgage in some cases after being in your home for under a year. The two main factors are credit rating and equity if these add up to the right combination refinancing can be done at most anytime.
Do not refinance unless you can drop your interest rate by 2% or more.
There are many reasons to refinance your mortgage, lowering your interest is just one of them. You may have an urgent need for funding, need to drop the PMI, combine a 2nd mortgage or any other reason that suits you. If your home increased in value over the last year it really does not matter what the interest rate drop is depending on the amount your home has increased. The bottom line is each lender is unique and has his or her own set of reasons for needing or wanting a mortgage refinancing do not let the pundants talk you out of something without at least checking your options for yourself.