Right now could be a great time to refinance your mortgage loan. Rates are at historic lows, which means refinancing your mortgage could be a really smart decision. But there are lots of considerations.
Switch from an Adjustable Rate to a Fixed Rate Mortgage.
If you opted for an adjustable rate mortgage (ARM), now may be the perfect time to lock into a lower fixed rate. It could save you thousands over the life of the loan.
Build equity, fast.
Maybe you’re interested in paying off your mortgage faster? With interest rates dropping, refinancing your mortgage may allow you to replace your current loan with a 15 or 20-year mortgage without raising your monthly payments. This is a great option for those considering paying off their mortgages before retiring.
Go from a Jumbo Mortgage to a Conventional Mortgage.
Over the last few years the Jumbo Mortgage threshold has grown to a current level of $417,000 and even higher in some U.S. states. If a Jumbo mortgage is what you have, refinancing and paying down enough for a conventional mortgage could help you lock in a lower rate.
Private Mortgage Insurance - Eliminate it.
If the value of your home has increased, paying PMI is something you may be able to eliminate if you currently have more than 20 percent equity in your home. Having your home appraised is great way to see if you qualify for this option.
Borrow from your home’s equity.
By refinancing for a larger mortgage at a lower interest rate, you could use the extra cash to pay off debt or prepare for new expenses that loom on the horizon, like college tuition or upgrades to your house.
