Refinance Mortgage Loans
Current mortgage rates are not the only reason a homeowner should consider to refinance. There are various refinance strategies you can research and go over with your mortgage loan originator to see if you can save money over the life of your mortgage loan or if you can reduce your monthly mortgage payments.
Changing Terms Of Your Mortgage Loan Via Refinance
If your financial situation is better than when your purchased your home and you can afford to make a higher mortgage payment than your current mortgage payments, you can save tens of thousands, if not over six figures depending on your mortgage loan, by refinancing your 30 year fixed rate mortgage loan to a 15 year fixed rate mortgage loan. 15 year mortgage rates are much lower than 30 year mortgage rates and for a few hundred more dollars a month in housing payments, your mortgage lifespan has been reduced in half and you save tens of thousands in interest savings. You mortgage loan originator can do an analysis of the savings and new mortgage payment for you.
Refinacing To Lower Your Mortgage Payments
Another reason to refinance is if you are currently struggling with your mortgage payments and need to lower your monthly payments. If you are currently on a 15 year fixed rate mortgage, you can refinance it to a 30 year fixed rate mortgage. If you are on a 30 year fixed rate mortgage and need to reduce your mortgage payments, you can refinance your current mortgage loan to a 5 year adjustable rate mortgage where the mortgage rates are substantially lower.
Eliminating FHA Mortgage Insurance Premium
If you currently have a FHA insured mortgage loan, you might want to consider to refinance your FHA loan into a lender paid mortgage insurance conventional mortgage loan where there is no mortgage insurance premium. FHA mortgage insurance premium is 1.35% of your mortgage balance amount and eliminating the MIP will be a substantial savings.
On the flipside, if you currently have an adjustable rate mortgage and are worried about mortgage rates rising, you can refinance from an adjustable rate mortgage to a fixed rate mortgage so you are locked with a fixed mortgage rate for 30 years.
Cashout Refinance Mortgage Loans
If you have equity in your home and need to consolidate all of your debts that you are paying higher interest on, you may want to consider a cashout refinance mortgage loan. Cashout refinance mortgage loans do have slightly higher mortgage rates and does require that you have equity in your home but sometimes paying a slightly higher mortgage rate on a cashout refinance mortgage loan may be well worth it if you are paying down higher interest rates debts such as credit card loans or automobile loans.
Most homeowners go through refinancing their current mortgage loan so they can get a lower rate and reduce their monthly payments. Refinancing out of your current FHA insured mortgage loan into a conventional mortgage loan will save you tens of thousands of dollars over the life of the loan. FHA streamline refinancing will shorten the refinance process because with FHA streamlines, there are no income verification and credit scores required and no appraisal is needed. You can have late payments and income reduction as long as you have been timely on your mortgage payments.