Refinancing your mortgage involves getting a new loan to pay off your existing mortgage loan. Most homeowners refinance their homes to reduce their interest rate, lower their monthly payment rate or restructure their debt from ARM to a fixed rate.
However, there are some factors to consider before refinancing your home to ensure that you are not making the wrong decision. A professional mortgage lender can provide you with all the necessary information to guide your refinancing process.
Reasons for Refinancing Your Home
You can refinance your home to enjoy one or more of the following benefits:
- Reduce your interest rate
- Reduce your monthly payment rate
- Convert your mortgage structure from ARM to fixed rate or vice versa.
- To raise short-term funds for emergencies
- To reduce the term of your loan and pay off your loan faster.
When to Refinance Your Home
There is no laydown rule on when to refinance your mortgage, but there are some factors to guide your refinancing decision, depending on your goal.
1. Reducing Your Interest Rate
Generally, the best time to refinance your home is when you can reduce your interest rate. Refinancing your home when the interest rate is lower will be beneficial in reducing your debt interest rate. A reduction of as low as 1% or even 0.5% can make a huge difference in your long-term payment.
2. Reducing Your Loan Term
You can refinance your home to reduce their loan term from a 30-years payment plan to a 15- years payment plan. Reducing your loan term will increase your monthly payment but reduce your interest rate. However, Refinancing your home when the interest rate is low or when you have enough equity will allow you to reduce your loan term without a high increase in your monthly payment.
3. Accessing Equity
If you need to raise funds for an emergency, you can refinance your home to access your equity. If you have at least 20% equity on your mortgage, you can access it through cash-out refinancing. You can also access your equity to consolidate your debt.
Refinance Your Home With Anew Lending
Enjoy a fast and smooth lending process with Anew Lending Mortgage. They are a team of experienced and licensed mortgage-lender, helping their customers get loans to buy their dream homes or refinance their current loans.
They have access to a full range of mortgage sources and specialize in helping their customers access loans at the best rate to meet their needs.
To learn more about their refinancing service, contact Anew Lending at 916-655-9381 or visit their website.
