The Mortgage Refinance Strategy

You’ve decided to refinance your mortgage. But before you begin, it is important to consider that why you want to refinance in the first place because the reason behind refinancing will guide your process from the beginning.

The most common reason why people approach a mortgage refinance company is to lower their monthly payments. If you refinance with another full 30-year term then you can really knock the teeth of your monthly payment. But, that will mean that it will take even longer to pay off the loan and become the actual owner of the home. Not to forget the extra interest that you’ll be paying. 

Before you refinance, you’ll have to take into account how much interest you have paid and how much more you’ll have to pay if you refinance.

Loans, especially home loans, are loaded with heavy interest. So, the longer you’ve been paying them off, the more you’re reducing your principal balance. By not extending your loan term or by reducing it and getting a lower interest rate, you can significantly lower the amount of your interest during the life of the loan.

Therefore, the strategy behind refinancing must be to avail those mortgage refinance interest rates that strike a balance between affordable monthly payments and reducing the overall borrowing cost.

The other most common reasons for refinancing are reducing the loan term on a lower interest rate to build equity faster. For example, if you recently received a substantial pay hike and don’t want to drag the loan for another 20 years, you can consider refinance.

To know more about refinance and to find out whether it will be in your best interest to refinance now or not, call All Western Mortgage at 702-850-2790 or click here.