Refinance Home Loan
Interest rates are still near all-time lows, which means a refinance home loan could be a good deal for homeowners. A lot of things may have changed since you first borrowed money for your home. Now, there may be several ways available to improve the terms of your current loan. At Homestead Mortgage, we can help you understand your refinance options and customize a loan that best fits your future needs.
What is Refinancing?
Refinancing a mortgage is the process of obtaining a new mortgage loan that replaces the old home loan, and allows you to shift the debt to a better place. Refinancing is usually done when you have equity in the home, which is the difference between the current amount owed and what the home is worth.
There are numerous reasons why you may want to refinance your mortgage. Refinancing for the right reason, with a good rate and suitable terms, can ultimately enhance your financial position.
Get a Lower Interest Rate
Getting a lower interest rate is probably the most popular reason to refinance a mortgage, which allows you to swap a higher interest rate for a lower one. Doing this can save you a considerable amount on your monthly mortgage payments, as well as over the life of your loan.
Change Your Loan Type
Let’s say you currently have an adjustable-rate loan and looking for a fixed-rate, or you now qualify for the great benefits of a VA loan. Refinancing your mortgage gives you the option of changing your loan type, and allows you to take advantage of the benefits of a different type.
Get Cash Out
If you have enough equity in your home, you may be able to do cash-out refinancing to fund a home renovation project, pay off debts, or buy that dream vacation home. Cash-out refinancing allows you to refinance your current mortgage, and keep the extra money to spend as you wish.
Shorten Your Loan Term
Instead of extending repayment, you can also refinance into a shorter term loan. You might have a 30-year home loan, and that loan can be refinanced into a 15-year home loan. That move might make sense if you want to make larger payments to get rid of the debt more quickly.