Why Refinance Your Home Loan in Pembroke Pines, FL
Whenever interest rates decrease in Pembroke Pines, FL, homeowners rush to refinance home loans. Refinancing often allows them to get better loan terms and rates. Refinancing refers to the process of replacing your current mortgage with a new one.
You might have heard about people refinancing their home loans, but have you ever wondered what they get from doing this and why there is so much talk about refinancing? Well, there are many reasons for refinancing a home loan, lower interest rates being one of them. Below we have shared a few of them to help you understand why you should consider refinancing in Pembroke Pines, FL.
· Lower Mortgage Payment
If you have a perfect credit score, you may get better loan terms and interest rates. You can refinance a home loan to obtain lower rates and, as such, reduce your monthly mortgage payments.
For example, if your credit score wasn’t great when you applied for a loan, you might be paying around a 6-percent interest on a $250,000 home loan. If you apply for refinancing with a better credit score, you might qualify for a 4-percent interest rate and save around $300 every month. This extra money can go into your savings account or be used to make other payments.
· Cancel Private Mortgage Insurance
If you made a down payment of less than 20% on a home loan, you must have purchased private mortgage insurance (PMI). Private mortgage insurance can increase your loan costs, and a lot of money goes towards paying it. You can get rid of PMI by refinancing your home loan.
This tactic works only if your house has gained substantial value since the previous mortgage. Let’s suppose that you made a 10% down payment on your home four years ago and the value of your home has risen about 15% since that time. You now owe less than 80% of what your home is worth. In this case, you can refinance without paying PMI.
· Switch from an Adjustable-Rate Loan to a Fixed Mortgage
If you have an adjustable-rate mortgage, you won’t know how much money you will be paying towards the loan every month. This can cause some financial uncertainty. Fortunately, you can refinance your home loan to switch from an adjustable-rate loan to a fixed-rate mortgage.
The condition is that you must have good credit, and the initial fixed-rate period on the adjustable-rate mortgage should have passed.
· Pay off Your Loan in Less Time
If you have good credit, you can get better loan terms. For example, if you have a 30-year loan, you might be able to switch to a 15-year mortgage. You will have to make higher monthly payments, but you will be able to save more money over interest in the long-term.
Whether you want to pay off your loan in less time, switch to a fixed-rate mortgage, cancel PMI, or lower your monthly payments on a mortgage, refinancing may help. If you want to refinance your home loan in Pembroke Pines, FL, get in touch with Fourpath Mortgage. Click here to learn how they can help you refinance your home loan.