There are some reasons for you to decide that the best for you would be to get a mortgage refinance regardless of what type this one ends up being.
The 5 solid reasons are described underneath: 1.
Using mortgage refinancing to help you reduce the current monthly mortgage payment - seems to be the most common reason that makes you take this decision.
But to accomplish this, you can resort to various ways.
For instance if you plan to stay in your home for a longer period of time you should take into account the payment of one point or two and as such make sure to buy down the current mortgage interest rate.
Supposing that your financial situation has turned into a better status, then you may be more eligible for a better interest rates without needing to buy more points.
If you do not become eligible for a lower rate, you are still given the opportunity to lower your rate by extending the loan terms.
This extension can go nowadays up to 40 even 50 years.
Adopt a mortgage refinancing to switch from adjustable rate mortgage (ARM) to a fixed rate one - is for the situations when you are afraid of how big the rate can turn into once you pass by the introductory period of lower interest rates.
Switching to a fixed interest rate you will obtain your peace of mind and in case the rates are too big, than you can do the same as in the previous situation - extend your loan term.
Having a fixed interest rate will enable you to have some plans done for your monthly expenses and budget.
Apply for a mortgage refinancing in order to avoid balloon payments.
Balloon mortgages are very popular due to the fact that they are set with very low payments per month, but when the balloon payment has to be made you could wake up and realize that your finances are rather down and as such unable to do the entire payment.
Thus you can refinance to a fixed rate or an ARM.
To stop paying the private mortgage insurance - when purchasing their houses, the homeowners who make a down payment of 20%or borrow some money over the value of their equity, then they are required to buy with the package the Private Mortgage Insurance.
This one is rather expensive and it requires high amount of dollars on each month as an insurance premium but otherwise it doesn't do anything for you but mainly for the lender acting as a back up plan in cases of losses.
To borrow based on the home equity - as this is a popular reason when it comes to refinancing mortgage.
The cash built on home equity can be used also in paying off the credit cards, it can pay for the college attendance, or take a vacation.