Why Should You Refinance Your Mortgage?
Did you know that you can refinance your mortgage to obtain a lower rate that helps you pay off your home quicker?
Here, are the three main reasons why you should refinance your mortgage today.
Reason 1: Take Advantage of Low Interest Rates
The first, and most obvious, reason homeowners refinance their mortgage is to take advantage of a lower interest rate. Reducing your interest rate helps you build more
equity in your home sooner, and decreases the size of your monthly payment.
If, for example, your 30-year fixed-rate mortgage has an interest rate of 5.75% on a $200,000 home, your principle and interest payment is $1017.05. After refinancing that same loan at 4.5%, your example monthly payment would drop to $894.03.
Reason 2: Shorten the Life of Your Loan
The allure of paying off a mortgage in a shorter timeframe also often drives the decision to refinance. If your mortgage has a particularly high interest rate, refinancing helps you
pay your loan off in half the time without changing your monthly payment much.
Your lifestyle changes over time. Choosing to refinance your loan at First New York allows you to choose when you will be mortgage free.
Reason 3: Convert Between Adjustable-Rate and Fixed-Rates
Initially, homeowners often opt for an Adjustable Rate Mortgage (ARM) because it offers a lower rate. Over time, though, adjustments can increase these rates until they surpass the going rate for fixed-rate mortgages. When this happens, switching to a fixed-rate mortgage can lower your interest rate and offer you stability instead of potential future rate increases.
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