When Is A Good Time To Refinance Your Mortgage?
If you are looking to make some changes with your mortgage, one thing you might do is to refinance it. Refinancing means that you are going pay off your current mortgage by getting a new mortgage. The new mortgage can give you a lower interest rate, a different kind of mortgage, let you use the equity in your home, or change the terms of your current mortgage. But, how can you tell if it’s a good time to refinance your mortgage? Lower Interest Rate One way to tell that it may be a good time to refinance your mortgage is that the interest rate is lower than the interest rate was when you originally applied for your mortgage. Taking advantage of that lower interest rate will let you build up the equity in your house faster. A lower interest rate also lets you pay off the principal of the loan too because there is less money going into paying off the interest. Getting Rid of an ARM An ARM is an adjustable rate mortgage. This means that periodically the interest rate on your mortgage changes. Generally that happens when the general interest rate changes. While it may have made really good sense for you to get an ARM when you originally got your mortgage, in the long term, it can be not necessarily the best choice for you. You can refinance your mortgage so that instead of having an adjustable rate mortgage you have a fixed rate mortgage. A fixed rate mortgage has an interest rate that will be the exact same the entire life of your mortgage. Change of Income Another time you want to think about refinancing your mortgage is when you have a change in income. For example, if you have gotten a promotion and a raise, or a new job, then you may want to refinance your mortgage then so that you can end up saving money and getting your house faster. You may also want to consider refinancing if your income has lowered. You may be able to get a lower payment, which can help you meet the payments easier. Having a mortgage lets you get your house without having to pay the entire amount all at once. The nice thing about having a mortgage is that you have the ability to refinance it so that it will work best for you and your particular life...
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Once my husband and I had finished saving money, we realized that it was time to make the plunge and invest in our first home. Unfortunately, we weren't familiar with the different loans on the market, and we didn't know what to do. As we mulled over our decisions, we decided that it would make sense to invest in a traditional 30 year mortgage. This blog is all about finding the right home loan for your financial situation, so that you don't find yourself struggling to pay your bills because of a bad deal. Read here to find out more.
