What Is The Right Time To Refinance Your Mortgage?

What is Refinance?

Refinancing the mortgage means paying off your existing home loans and replacing it with a new one that is offering better rates and better terms. 

Benefits of Refinance

Refinancing your home loans help you in cutting down the monthly mortgage payments, reducing the loan term and total repayment amount and helps in building up the equity quickly. 

When should you consider Refinance?

When the interest rates on home loans start to drop or home values start rising, it may be a good idea to refinance your mortgage. Let us learn about these scenarios in detail. 

1.Falling Mortgage Refinance Interest Rates: It can be a great time to refinance your home loan when the mortgage rates are falling. There are two ways to reduce your total cost in such a situation:

•The repayment term remains the same, but your monthly repayments get reduced

•Your monthly payments remain the same, but your loan term gets reduced and you are able to build equity faster.

2.Home Values Rise: 

If your home’s value has increased substantially, refinancing helps you take advantage of that increased equity. For example, you can use the increased equity to pay off high interest debts or use it to pay for high-priced expenses like your child’s education or weddings. 

3.You Haven’t Been In The Home For Long: 

Refinance makes most sense when you approach a mortgage refinance company in the early years of your mortgage term.  This is due to the fact that in the initial years, your monthly payments are paying off the interest part of your mortgage. When you enter the part of the cycle where majority of the monthly payment is covering the principal, you are better off keeping the original loan. 

For more information about refinance and for availing the best mortgage refinance rates, visit http://www.awmlending.com/mortgage-refinance.php or give All Western Mortgage a call at 702-850-2790.