When you first obtained your mortgage, the last thing you were considering was a refinance. But today with property values on the increase in Louisville and mortgage interest rates at an all-time low, it may be on your radar. Would a mortgage refinance be a good move for you? Let’s look at the facts.
The Benefits of a Mortgage Refinance for Today’s Borrowers
● Lower interest rates
● Smaller monthly payments
● Locking in a fixed rate from an adjustable rate
● More advantageous loan terms
● Lessening the term of the mortgage from a 30-year to a 15-year
● Cashing out equity to offer more stability and financial liquidity
● Consolidating consumer debt
With the right mortgage refinance product, you could potentially save thousands of dollars over the life of your loan.
Lower Interest Rates
Even with a small reduction in interest rate, this can equate to a large savings over the entire life of the loan. When you got your initial mortgage, you may have been a young borrower without much established credit. If your credit rating, your debt to income ratio or your financial situation has changed for the better, you may even reap more benefits by further reducing the rate you can qualify for now.
How Long Will You Stay?
How long are you planning to stay in your home? It may be that when you first took out your mortgage, you only qualified for an adjustable rate. But now, you are planning on staying long term and want to lock in a fixed rate for the balance of your time there. Conversely, if you are looking to move in the next few years, getting an adjustable rate mortgage that offers a lower introductory rate may be a good option for you by reducing your current payments.
Do You Have Equity?
If you have at least 20 percent equity in your home, you may want to consider a cash-out refinance to consolidate debt or do some needed renovations to your home. Why wait until you sell when you can use your home’s equity right now?
Get Rid of Your PMI
If you put down less than 20 percent when you first bought your home, chances are you are paying a mortgage insurance premium each month. If your home has appreciated to 80 percent or more of your anticipated refinance, you can eliminate that premium and save that money each month. Lowering or eliminating your PMI can offer significant savings, especially if your original mortgage was an FHA mortgage.
Evaluate Your Current Financial Situation
If you are considering a mortgage refinance, you will want to work with a professional who knows how to evaluate your current financial situation and help you decide whether a refinance is a good option for you.
At First Savings Bank Louisville, we can help you find mortgage solutions, no matter your financial situation. Call us at (502) 238-9655 for a free consultation and let us help you find the right mortgage refinance product for you based on your individual needs.