A lot of homeowners believe that the best time to refinance their mortgage is when interest rates fall. However, most homeowners often fall into a rush to refinance their mortgage in Salt Lake City without considering if it is a sound idea or not.
To help you make a good financial decision, Altius Mortgage Group cites a few instances when you need to consider refinancing your existing mortgage.
Securing a lower interest rate
One of the best reasons for doing it is to lower your current loan’s interest rate. You might be able to reduce your loan’s interest rate by at least 2%, which can save you a lot of money in the long run.
Reducing your interest rate can also increase the chances of building the equity of your home while decreasing the size of your payments every month.
Another reason people consider refinancing their mortgage is to shift unsecured debts to a secured loan. Taking out cash to consolidate mortgages with high interest rates is a great idea but might mean taking on more financial risks if you don’t plan it out carefully.
Shortening the term of the loan
As soon as the interstate rates begin to decline, homeowners would have the option to refinance an existing loan without many changes in their monthly payments, thus significantly shortening the term.
So if you refinance an existing 30-year fixed rate mortgage from 9% to 5.5%, then you’ll be able to cut the loan term to 15 years, with only a slight difference in your monthly payment.
Choosing to refinance your mortgage is a huge financial decision. That’s why it’s essential to learn as much as you can about it. Coordinate with a reputable mortgage company to get the best service at the lowest rates possible.