3 Advantages of Refinancing Your Mortgage
Saturday, April 28, 2018, 6:00 AM | Leave Comment
Practically every homeowner is going to consider refinancing their mortgage at some point.
Even if your initial home loan had great terms, your finances are going to change over the years.
Here is a closer look at three reasons why you might want to think about refinancing your mortgage in the near future.
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Lower Your Interest Rate
Most homeowners refinance because they want to improve their interest rates.
Those rates are determined by dozens of different factors, and many of those variables are completely out of your control.
Whenever the housing market plateaus or drops, you should speak with your lender about potentially lowering your interest rate.
Reducing your mortgage rate by a fraction of a percentage could end up saving you an incredible amount of money in the coming decades.
You might also have the option of bundling your home loan with other forms of debt such as a car or boat loan.
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Shorten Your Term or Lower Your Payments
Paying off your loan early might be a better financial decision than investing more money into a retirement account.
If you aren’t sure which is the best option, then you should speak with an experienced mortgage broker or wealth management specialist.
Depending on the state of the market, they might even suggest lowering your monthly payments so that you can invest more money into a matched 401(k) or another retirement account.
In most cases, homeowners should try to turn their 30-year mortgages into 15-year loans when the interest rates plummet.
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Easily Pay for Home Renovations
Renovating your home is another great way to build your wealth, and many people pay for those projects by refinancing.
When you are deciding which renovations you would like to carry out, you should spend some time researching how much value those upgrades usually add to a home.
Working with a company, like Prefab Technology Pty Ltd, to improve the structure of your home will most likely increase the value of your property by quite a bit.
Once you are absolutely sure that your home is structurally sound, you can then consider cosmetic upgrades such as new doors and windows.
Refinancing your mortgage is similar to applying for a new loan, and that means your credit score needs to be as high as possible. Boosting your credit score by just a few points could reduce your monthly payments and save you thousands. You must also make sure that there are no blemishes or marks on your credit report that might impact your new mortgage rate.
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Hannah / Freelance Writer
Email: hannahwhittenly@gmail.com
