This BLOG On Benefits Of Refinance Mortgage And Lending Guidelines Was UPDATED And PUBLISHED On June 4th, 2020
The Many Benefits Of Refinance Mortgage
There are many benefits of refinance mortgage.
- Although the Federal Reserve Board has recently raised interest rates by 0.25% basis points, mortgage rates are still at historical lows
- Nobody has a crystal ball, but mortgage interest rates cannot remain this low forever
- The Feds are closely keeping an eye at the economic data and unemployment numbers
- Any signs of the economy getting much better will no doubt spike up interest rates again
- Homeowners who have not refinanced their high interest mortgage loans yet should consider the benefits of refinance mortgage
- Whether considering a rate and term refinance to lower monthly payments or refinancing to take out non-occupant co-borrowers options on its benefits should be explored
- Refinancing FHA Loan To Conventional Loan To Eliminate MIP , or do a cash-out refinance mortgage to pay off debts are other benefits of refinance mortgage homeowners should consider
- There are many benefits of refinance mortgage while mortgage interest rates are still very low
We will be discussing the major benefits of refinance mortgage and see if refinancing will be a great benefit for homeowners.
Benefits Of Refinance Mortgage And Are Mortgage Rates Going Up?
The recent announcement by the Feds that they rose interest rates by 0.25% was long expected.
- The Federal Reserve Board has been delaying raising interest rates for quite some time
- Mortgage rates are currently at its highest level it has been since 2008
- The intention of the Feds is to keep on increasing interest rates
- The Feds will be carefully watching the economy
- Any spark in the economic numbers and signs of economic growth, consumers can bet that the Federal Reserve Board will not hesitate in increasing interest rates in the months to come
- Mortgage rates will not remain this low forever
- It is not if mortgage rates will go up, it is when mortgage rates will go up
- The Federal Reserve Board has plans in raising short term interest rates in the very near future where if short term interest rates go up, mortgage rates will definitely go up as well
Keeping this in mind, with rates still low, it makes a great time to refinance mortgage loans into a lower mortgage rate.
15 Year Fixed Mortgage Versus 30 Year Fixed Mortgage
There are many benefits in refinancing 30 year fixed rate mortgage loan to a 15 year fixed rate mortgage loan. 30 years is a very long time to have a payment agreement to pay anything off.
- Homeowners should consult with their mortgage loan originator and see and compare the benefits of a 15 year fixed rate mortgage versus a 30 year fixed rate mortgage
- Keep in mind that 15 year fixed rate mortgage loans have much lower mortgage interest rates versus 30 year fixed mortgage rates
- The much lower mortgage interest rates borrowers get quoted with may benefit them getting a 15 year fixed rate mortgage loan
- Borrowers may get a similar monthly payment or slightly higher monthly payment
Borrowers may be able to afford the 15 year fixed rate mortgage and shave off 15 years off the life of the mortgage loan.
Benefits Of Refinance Mortgage To Consolidate Bills
Homeowners with equity in their homes and have many outstanding debts, they should consider doing a cash-out refinance mortgage loan. Homeowners can take the cash from refinance mortgage and pay off all of their high interest credit cards and/or other high interest bills.
- Mortgage interest rates are much lower than credit card interest, car loan interest, and other interest rates on other debt
- Average mortgage rates are in the 4.0% rate where average credit cards interest rates are north of 14% and some even over 20% interest rate
Besides debt consolidation, borrowers may need a cash-out refinance mortgage to buy a second home, pay for college tuition, take care of elderly parents, renovating their home, or for investment purposes. Average college tuition for undergraduates are over $30,000 per year and many homeowners help their children with their college expenses with the equity they have in their homes with a cash-out refinance mortgage.
Other Benefits Of Refinance Mortgage
Other reasons why homeowners may consider doing refinance mortgage is to take out non-occupant co-borrowers. Folks who are divorcing normally want their spouse off the mortgage and may need to do a refinance mortgage. As mentioned earlier, many homeowners with FHA Loans may be able to eliminate FHA annual mortgage insurance premium by refinancing their FHA Loan to Conventional Loans where no private mortgage insurance is required if homeowners have at least 20% equity in their homes. For more information on the benefits of refinance mortgage, please contact us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at firstname.lastname@example.org. Borrowers can also email us at email@example.com. We are available 7 days a week, evenings, weekends, and holidays.
June 8, 2020 - 4 min read