Did you know that mortgage rates are down considerably? If the current value of your home has increased it may make sense to refinance at a better rate, or refinance to consolidate debt or plan a home improvement project.
Why have mortgage rates declined? Mortgage rates tend to follow the yield on the Treasury’s 10-year note, which also has been at its lowest level since 2016. Treasury note yields have recently fallen on expectations the Federal Reserve may lower interest rates as early as July 2019.
If you’re a homeowner, refinancing might be worth considering — even if your mortgage is only a year old.
Refinancing refers to the attainment of a new loan to take the place of an older one. Refinancing is categorized as “rate and term” or “cash-out.” There are a number of reasons people opt for a refinance, some of which are listed below:
A Lower Interest Rate
This is one of the main reasons people tend to refinance. A suitably reduced interest rate may allow a person to save a significant amount of money along with the reduction in monthly installments. Although it is not so easy to find a mortgage package to meet one’s exact preferences, refinancing may still reduce payments considerably.
The refinancing of a mortgage is accompanied with an upfront closing cost because it is a new loan a person takes out to replace an older one.
A Shorter Time Frame
Some people plan to get rid of their loan in a shorter time frame than the period they previously selected. Refinancing provides an option to do so conveniently. This is preferred by debtors when:
The immediate consequence is the increase in the monthly payback, but refinancing to switch to a shorter period proves to be beneficial in the long run. Monthly payments can be roughly estimated, but a direct consultation of a creditor can give accurate figures before the commencement of mortgage refinancing.
Use our Refinance Interest Savings calculator to see how much you can save!
A mortgage-financing decision, if made wisely, can accelerate the process of eliminating debt, and can provide financial peace of mind.
Learn more about refinancing let Metro Credit Union Mortgage help you make the best decision for your finances!