Reasons To Refinance Mortgage To Benefit Homeowners

What Are The Reasons To Refinance Mortgage

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers what are the top reasons to refinance mortgage. Mortgage rates are at three-year highs and keep rising. However, many homeowners have reasons to refinance mortgage. Home prices are appreciating like never before, with no signs of any slowdown. Today’s economic instability has alarmed every Americans.

Surging inflation, historic high interest rates, and housing prices that keep on increasing with no signs of correction have brought panic to every household.

Many Americans have gotten laid off, their hours shortened, and are barely making ends meet. There are many reasons to refinance mortgage to benefit Homeowners. The low mortgage rates are sparking refinancing by homeowners nationwide. There are many reasons to refinance mortgage today besides taking advantage of lower mortgage rates.

What Are The Top Reasons To Refinance Mortgage

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There are many reasons to refinance a mortgage. The top reasons to refinance mortgage is due to lower rates. Refinancing due to lower rates will not just lower the homeowner’s monthly housing payments, but homeowners can save tens of thousands of dollars over the loan term.

The top reasons to refinance mortgage is to get a lower mortgage rate. With rates being at a 36-month low, many homeowners are taking advantage of the market to refinance their current home loans.

There are cons to refinancing. The main con in refinancing is resetting the time clock on your home loan. A new mortgage will restart the 30-year-term clock to restart. However, homeowners can get a lower amortized mortgage, such as a 15 to 25-year fixed rate mortgage versus a 30-year one.

Credit and Income Profile Changed For The Better

Many borrowers have higher credit scores and a stronger financial profile than when they first closed on their home loans. Higher credit scores mean lower mortgage rates. Home prices have appreciated exponentially nationwide over the past several years. This may mean a lower loan to value.

Lower loan-to-value means less risk to lenders. Lower risk to lenders means lower mortgage rates.

If your credit scores have improved and your loan-to-value is lower due to higher home values, you may consider refinancing your FHA  to Conventional Loans. Doing so can eliminate paying the hefty FHA Annual Mortgage Insurance every year. Or taking advantage of better rates with a higher credit score can often benefit borrowers.

Reasons To Refinance Mortgage: Cash-Out Refinance

With home prices appreciating, many homeowners do not realize the equity they have in their homes. Homeowners can utilize the equity in their homes and see if they qualify for a cash-out refinance mortgage. HUD allows up to 80% LTV cash-out refinance on FHA loans. Fannie Mae and Freddie Mac allow up to 80% LTV Cash-Out Refinance on Conventional loans.

Gustan Cho Associates offers 90% LTV Debt-Consolidation Mortgages. The Veterans Administration (VA) allows up to 100% cash-out refinance mortgages on VA loans.

Non-QM and Bank Statement Loans For Self-Employed Borrowers Offer up to 80% LTV Cash-Out Refinance Mortgages. Proceeds from cash-out refinance mortgages are tax-free. Borrowers do not have any tax obligations on cash-out refinances. Borrowers can use the proceeds of cash-out proceeds for any purpose. They can purchase a new car, a second home, investment property, invest in the stock market, and pay off outstanding debts.

UPDATE To Original Guide By John Parker NMLS 124935

For individuals who own a home in the United States, refinancing their mortgage is often recommended as a practical solution to several financial challenges. Among the frequently mentioned benefits of refinancing are securing lower interest rates, cashing out on home equity, and eliminating the burden of FHA mortgage insurance premiums.

This guide on reasons to refinance mortgage has been updated on July 22nd, 2023, by John Parker, NMLS 124935.

This blog post extensively covers the reasons to refinance a home, including taking advantage of lower interest rates, eliminating FHA mortgage insurance premiums, cashing out equity for various reasons, or refinancing from a non-qualifying mortgage to a traditional one.  However, additional compelling reasons for refinancing may not be readily apparent. Here are several other reasons to consider refinancing your home loan in the United States that warrant serious consideration.

Reasons To Refinance Mortgage To Shorten The Loan Term
Are you dreaming of a life free from mortgage payments? Well, it’s time to turn that dream into a reality! One way to achieve this is by shortening your mortgage loan term. Initially, a 30-year term might have seemed like the best option.

If you have stable income and finances are strong, why not consider refinancing to a 15-year mortgage?

You’ll not only benefit from lower interest rates, but you’ll also save a considerable amount in the long run. And let’s not forget the sweet feeling of financial freedom and peace of mind that comes with being mortgage-free sooner than you thought! So, why wait? Take action today and start living your best life!

Why Switching from an Adjustable-Rate to a Fixed-Rate Mortgage Can Benefit Homeowners

One option for homeowners looking to secure a stable mortgage payment is to switch from an adjustable rate to a fixed-rate mortgage. Although adjustable-rate mortgages may initially offer lower rates, they can come with the risk of interest rate increases. Mortgage rate increases on adjustable rate mortgage can lead to unpredictable monthly payments.

By refinancing an adjustable rate mortgage to a fixed-rate mortgage, homeowners can lock in a low rate for the term of a 30-year fixed rate mortgage term.

This can be particularly advantageous when the economic outlook predicts rising interest rates, as homeowners can avoid the potential financial burden of higher payments. Switching to a fixed-rate mortgage can offer peace of mind and financial security for homeowners looking to maintain a stable housing payment.

Consolidate High-Interest Debts Reasons To Refinance Mortgage

Refinancing your mortgage can provide a solution if you’re juggling a variety of high-interest debts, such as credit card balances or personal loans.

One effective way to manage multiple high-interest debts is to consider refinancing your mortgage.

Utilizing your home equity allows you to merge your credit card balances or personal loans into your new home loan, potentially at a lower interest rate. This consolidation approach offers the benefit of streamlining your financial obligations by creating a single payment while potentially saving you a notable interest payment over the long term.

Reasons To Refinance Mortgage Due To Divorce Proceedings

The process of divorce can introduce a host of complexities regarding home ownership. Refinancing may be a viable option for removing the other party’s financial stake when one party wishes to retain the home. This can grant the retaining party full responsibility for the mortgage while potentially allowing them to purchase the other party’s equity in the property.

Fund Home Energy Improvements

Funding home energy improvements is one option to increase your home’s energy efficiency. Investing in energy-saving appliances, solar panels, or other green upgrades can significantly lower your utility bills while increasing your property’s value.

It’s crucial to weigh the potential costs and advantages carefully and seek advice from a financial advisor or mortgage specialist before deciding. Your home is likely your most valuable asset, and making informed choices that maximize its value and usefulness to you is essential.

Implementing green improvements also positively impacts the environment, promoting a healthier planet for all. Several government programs offer rebates and incentives for homeowners who choose to make these eco-friendly changes to incentivize these upgrades further, making it a financially beneficial decision.

Reasons To Refinance Taking Out Co-Borrowers

There are instances where homeowners need to take out non-occupant co-borrowers by refinancing their home loans. With a new refinance mortgage, borrowers can take out any non-occupant co-borrowers. They can also take out co-borrowers. This is very common when a married couple divorces.

The homeowner who gets awarded the home may need to refinance it so they can take the ex-spouse off the mortgage note.

It’s important to recognize that refinancing your home can provide benefits beyond commonly cited reasons. For more information about the contents of this article and other mortgage-related topics, please contact John Parker NMLS 124935 of the John Parker Mortgage Team at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at The Gustan Cho Associates Mortgage Group team is available seven days a week, evenings, weekends, and holidays.

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