According to a study by the National Association of Realtors 86% of buyers finance their purchase. That’s why you’ll want to adore your loan just as much as your home. If you didn’t find *the one* the first time around, you could get a second shot at a loan you love by refinancing. Whether you’ve got eyes for a lower monthly payment or a shorter term, land a date with that perfect home loan. Here are a few benefits of refinancing that you may match with:
A lower interest rate
If rates have fallen since taking out your original loan, a lower interest rate may feel like love at first sight. Or, if your credit score has improved since your home purchase, you may be eligible for a lower rate as well. Either way, bigger savings will likely have you feeling lovestruck!
Predictable costs
If you’re charmed by consistency and can do without surprises, switching from an adjustable-rate mortgage (ARM) to a fixed-rate loan may be your happily ever after. A fixed-rate mortgage has an interest rate that remains the same for the entire life of the loan, so you won’t have to worry about your monthly principal and interest payments acting brand new if rates should rise.
A shorter term
If you’re cagey when it comes to commitment, you may want to swap your 30-year home loan for a 15-year mortgage. Not only will you pay the mortgage off in half the time, you could save thousands in interest over the life of the loan!
Cash-out refinance
If you get sappy thinking about all your home sweet home could be, consider a cash-out refinance. In this case, you’ll take out a new mortgage for a larger amount than the existing loan amount in order to convert home equity into cash. Maybe some home improvements are in store?
Cancel mortgage insurance
If you’re simply tired of paying mortgage insurance, you may be able to refinance and ditch the PMI (private mortgage insurance). For certain government-backed loans, refinancing may be the only way to eliminate PMI. For all loan types, keep in mind that your new loan will likely need to be for 80% or less of the home’s current appraised value to avoid PMI.
Refinance in your name
If you’re moving on to a brand new love story, you may need to remove someone from your mortgage. Refinancing is one of the best ways to manage home ownership in cases of divorce, or in the event your cosigner is no longer needed. You may be able to apply for the new mortgage individually, and open a new chapter with a loan you truly love!
Whether or not these benefits sparked love at first sight, let a local loan originator in the Motto Mortgage network play matchmaker! 30 years is far too long to pay on a loan you don’t love. A little refinancing magic, and your heart may just skip a beat! After all, home is where the heart is.
Published on February 10, 2020
