As soon as I realized that my personal financial picture was a little bleak, I started thinking about taking out a personal loan. I wasn't really looking forward to going into debt, but I knew that if I wanted to solve a few short-term problems, a loan would be the way to go. I talked with a few of my local financial institutions to get a good idea of what they could offer me, and then I sat down to go over the paperwork. It was incredible to see how much money I could save by securing a lower interest rate. Check out my blog for more information about loans.
When you own a house and have a mortgage on it, you might be able to save money on your loan by refinancing it. Refinancing a mortgage is not always a good idea, but there are times when it can be a smart move. If you are thinking about refinancing and are not sure if you should or not, here are several things to consider that will help you know if this is a good idea.
Will the interest rate be lower?
It is never a good idea to refinance a loan if your new interest rate will be higher than your existing rate. The interest rate on your loan will greatly impact the amount of money you must pay for your monthly payments, as well as the total amount of money you will repay for the entire loan. If you can refinance and receive a lower rate, it might be a good idea to refinance.
Are you looking for ways to reduce your monthly expenses?
One of the best reasons to refinance is to obtain a lower monthly payment on your loan. If circumstances in your life have made it hard for you to pay all your bills each month, looking for ways to reduce your expenses is a great idea. With a lower interest rate, your payments will be lower.
You can also get lower payments by extending the length of your loan. For example, if you currently owe 26 years more on your home loan, extending the loan to a 30-year loan, combined with a lower interest rate, will yield payments that are significantly lower. Extending a loan is not always a good idea, but it can be very helpful if you really need to lower your payments.
Are you trying to avoid a hike in your interest rate due to your adjustable-rate mortgage?
Another good reason to refinance a home loan is to avoid a hike in interest rate if you have an adjustable mortgage. This is a good idea to consider if your rate will be changing in the next year and if you suspect interest rates will by rising. If rates are currently relatively low, now might be a good time to take advantage of the low rates by refinancing your current home loan.
If you are considering taking this step and would like to learn more about refinancing a loan, contact a mortgage lender today.
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18 May 2017