While you’re okay with the current mortgage, is it really doing everything for you that it should? If not, now is a good time to think about refinancing the debt. It’s not just about mortgage rates although they do matter. Here are a few signs that opting to refinance the current mortgage would help you come out on top.
Your Credit Score is Much Better These Days
Things are different from when you first secured the mortgage. For one thing, your credit score is in much better shape. That could mean that financing terms and conditions could be more favorable today than in times past. Since it costs nothing to inquire about refinancing options, why not see who would offer what these days? If there isn’t that much difference between the new offers and your current setup, you don’t have to change a thing. On the other hand, if there is a significant difference, you may want to make a change as quickly as possible.
Your Income is Up
One of the factors that many lenders consider is the amount of debt you carry compared to the monthly income that you generate. The reason is obvious: someone with more money coming in is likely to make the mortgage payments on time.
Assuming your debt load is similar to or a little better than when you locked in the current mortgage, and you have more income these days, lenders are likely to extend better terms and conditions for refinancing that mortgage. You can decide if the terms along with any fees or charges related to the refinancing make the deal worth the time and effort.
Interest Rates are Lower Too
This is a big one to consider. If there’s been a decrease in the average mortgage rate since you first secured a mortgage, it may be time to consider refinancing. This is true even if you want to lock in the same term for the refinancing. The fact that the interest rate is lower will save you money over the life of that refinanced mortgage. It may also mean that your mortgage payments decrease a little. Like all things connected to home buying and mortgage rates, do your research. Visit websites like Lowermybills.com to learn more about mortgage rates and when you should lock in your mortgage rate.
Putting Your Equity to Good Use
There are things you would like to do to the house, but that would mean taking out some sort of loan. If you do that, there’s one more obligation to juggle every month. A better solution is to learn more about how to refinance your mortgage and use the equity to cover those home improvements. You end up without another debt to pay every month and may even see little to no increase in the mortgage payment. What could be better?
You May Be Able to Shorten the Term and Pay Less Interest
Maybe you would like to pay off the mortgage sooner. While you could double up on the payments, that won’t lower your interest rate. Consider looking into refinancing options that would shave five or more years off the term while also providing access to a lower rate. You could end up with payments that are not that much more than what you pay right now. Best of all, the house is paid in full a lot sooner.
There are other reasons to consider refinancing an existing mortgage. Talk with a professional and see how this strategy could benefit you. If you like what you see, get to work on the application.