Refinancing can be a great financial tool for some homeowners. It can make extra room in your budget, help you to pay off debts quicker, or even put you on the fast track to your personal goals. Here are some of the most common ways we help our clients to get the most out of their mortgage through refinancing.
Many homeowners use refinancing as a way to reduce their monthly mortgage payment. You can do this one of two ways:
Refinancing into a loan with a lower interest rate. That way you are paying more principal and less interest each month.
Extend the amortization period of your mortgage. With the same amount of mortgage spread out over a longer term, you’ll be paying less each month. Keep in mind that this option will have you paying more money in interest over time.
On the flip side, homeowners can shorten their amortization period and pay off their mortgage sooner. Imagine not having to fork out monthly mortgage payments in as little as 10 years! Not only will you leave your future self in a better financial position with one less payment, you will actually end up saving thousands of dollars in interest. Homeowners that choose this route will have higher monthly payments, so it is important to recognize if your current financial situation can support that extra cost.
Many homeowners who once needed a fixed rate mortgage will refinance their home to a variable rate mortgage, and vice versa. Fixed rate loans offer consistent payments that may end up costing you more in interest over time. Variable rate loans shift along with the market, making them unpredictable. Changing life circumstances or lower market rates may make you want to re-evaluate your current mortgage type.
Whether your financial situation has changed or you’re just looking for smarter options, consider refinancing your mortgage. To find out if this is a tool you can use to achieve your financial goals, contact the mortgage experts at Source Mortgage today!
Source was absolutely great to work with - went above and beyond to help us get everything done when buying our new home. Highly recommended!! Chad and Jenelle Richards Jan 09 2013
Chad and Jenelle Richards
Added January 23rd 2013
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