You may wonder if you should look into refinancing your mortgage. When making this decision, there are many factors to consider, such as the current interest rates and your home’s equity. Please keep reading to learn more. If you would like to meet with our Florida lawyers for your free consultation, please call our office today.
What is Refinancing?
Deciding to refinance your mortgage means that you are replacing your current loan with a new one. The purpose is that your monthly payments would be lower due to your loan having different terms. This may be a lower interest rate or a different term length for the loan. By doing this, you can pay less monthly and save money on interest. When people refinance their mortgage, they are often able to pay off their loan sooner.
Why Would I Refinance My Mortgage?
Many people decide to refinance their mortgage because of the potential benefits it can provide them. However, it is not a decision to make lightly, as it takes considerable time and effort.
One of the most frequently cited reasons someone would opt to refinance is that it could land them with a lower interest rate. The interest rate can fluctuate, and if you bought your home while the interest rates were very high, refinancing could significantly lower your monthly payments.
When you refinance, you may be able to get a different type of mortgage loan. For instance, refinancing could help you switch to a conventional loan if you have an FHA loan. You can benefit from this because FHA requires you to pay mortgage insurance while conventional typically does not.
If you have substantial equity on your home, deciding to refinance can be a good decision if you plan to cash out, meaning you will use your home equity to borrow more money. Doing this can allow you to pay for something that is a huge expense, such as college tuition or a home renovation.
Our Florida lawyer would be glad to help you learn more about refinancing a mortgage loan. Give us a call any time to schedule your free consultation with us.
Pros and Cons of Refinancing
There are pros and cons to consider if you are thinking about refinancing your mortgage loan. Please keep reading to learn more about it.
Pros
Many possible good things can occur if you refinance at the right time.
Your interest rate can be lower, meaning your monthly payments would be lower. You can end up having your mortgage paid off earlier than you anticipated.
Some people take this opportunity to consolidate their debt. For example, they will refinance their mortgage and student loans into one payment.
Refinancing can also help you get rid of unnecessary fees such as premiums for mortgage insurance.
Cons
While there are many benefits, there are also some consequences to consider before you refinance your mortgage.
Your credit score will be temporarily affected. It can sometimes take over a month to refinance.
You may have less home equity if you decide to take cash out, and the mortgage term length could be longer, which can add to the total cost of your mortgage.
Meeting with a lawyer can help determine if refinancing your mortgage is your best option.
Call to Schedule Your Free Consultation
Refinancing your mortgage may be the right financial decision for you. If you want to stay in your home for a long time, you can make a huge difference in your monthly payment by refinancing your home at the right time. Don’t hesitate to get in touch with our Florida lawyers to discuss this during a free consultation if you would like more information.