Are you looking to lower your interest rate or put an end to PMI payments? Now might be the right time to consider refinancing your mortgage! First Federal Lakwood offers a wide range of resources and the proven expertise to help you make a decision with confidence.
Lower Your Interest Rate. Do the math to see what a new mortgage will cost in the long run. A new 30-year mortgage may offer a lower interest rate, but it could end up costing more total dollars because your number of payments will once again be 360 months vs. however many months remain on your existing mortgage. On the other hand, a shorter term refinance may mean paying less interest overall. Get extra cash. If you have equity in your home, you may be able to take out a new mortgage for more than what you owe, so you can use the extra cash for other expenses. But be sure to compare the amount of interest saved by paying off other debts vs. the interest that will accrue over the life of your new mortgage. Eliminating mortgage insurance. If you did not put at least 20% down when you bought your home, you’re likely paying for mortgage insurance. Whether you have a conventional loan backed by private mortgage insurance (PMI) or an FHA loan, refinancing may allow you to do away with mortgage insurance payments if you have enough equity. Avoid a Balloon Payment. Certain mortgages that do not fully amortize over the term of the loan have an oversized “balloon” payment due at the end. Most homeowners can’t afford these large payments, so they refinance before their loan’s maturity date to avoid a huge bill. Refinance an ARM. Similarly, homeowners with adjustable-rate mortgages will often consider refinancing into a fixed rate loan to avoid a huge jump in their monthly payment should their interest rate rise.