Benefits of Refinance Mortgage

What Are The Benefits of Refinance Mortgage

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers the benefits of refinance mortgage loans. 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 historic lows. Nobody has a crystal ball, but mortgage interest rates cannot remain this low forever. The Feds are closely monitoring the economic data and unemployment numbers.

Any signs of the economy getting much better will spike 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 doing 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 keep on increasing. 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: Are Mortgage Rates Going Up?

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The recent announcement by the Feds that they raised interest rates by 0.75% was long-expected. The Federal Reserve Board has been delaying raising interest rates for quite some time. Mortgage rates are currently at their 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. With any spark in the economic numbers and signs of economic growth, consumers can bet that the Federal Reserve Board will not hesitate to increase interest rates in the coming months.

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 plans to raise short-term interest rates very shortly, where if short-term interest rates go up, mortgage rates will also go up. Keeping this in mind, with low rates, it is a great time to refinance mortgage loans into a lower mortgage rate.

Comparing 15-Year Fixed Versus 30-Year Fixed Rate Mortgage

What is the difference between a 15-year fixed mortgage and a 30-year fixed mortgageThere are many benefits in refinancing a 30-year fixed-rate mortgage loan to a 15-year fixed-rate mortgage loan. Thirty years is very long 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. Remember that 15-year fixed-rate mortgage loans have much lower mortgage interest rates than 30-year fixed mortgage rates.

The much lower mortgage interest rates borrowers get quoted may benefit them from getting a 15-year fixed-rate mortgage loan. Borrowers may get a similar monthly payment or a slightly higher monthly payment. Borrowers may be able to afford the 15-year fixed-rate mortgage and shave 15 years off the life of the mortgage loan.

Benefits of Refinance Mortgage To Consolidate Bills

Homeowners with home equity and many outstanding debts should consider doing a cash-out refinance mortgage loan. Homeowners can take the cash from refinance mortgages and pay off their high-interest credit cards and 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 6.0% rate whereas average credit cards interest rates are north of 24%, and some even over 30% 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, renovate their homes, or for investment purposes. Average college tuition for undergraduates is 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

What are the other benefits of refinancing your mortgage?Another reason homeowners may consider 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 premiums by refinancing their FHA loans to Conventional Loans.

Refinancing FHA to conventional loans requires homeowners to have at least a 20% equity in their homes. Refinancing to a conventional loan from FHA loans can save tens of thousands of dollars due to no private mortgage insurance.

No private mortgage insurance is required on conventional loans. Suppose homeowners have at least 20% home equity. For more information on the benefits of refinance mortgage, please get in touch with us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Borrowers can also email us at gcho@gustancho.com. We are available evenings, weekends, and holidays seven days a week.

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