4 Reasons to Refinance Your Home
Have you seen interest rates slide since you received your mortgage loan? While rates tend to make only small changes, sometimes these rate drops can make it worth your while to consider refinancing to save money on your mortgage costs.
These tips can help you figure out whether it may be time to refinance.
Lowering your mortgage payment
If interest rates have gone down a percentage point or two since you purchased your home, refinancing mortgage loans can help you whittle down your monthly payment. That small percentage may equal a few hundred extra dollars each month, which over time adds up.
Changing your home loan type
If you have an adjustable rate mortgage or balloon loan, you may want to consider refinancing into a fixed rate mortgage. Your interest rate and term will be fixed, making payments and budgeting more predictable.
Shortening your mortgage loan term
Another reason to refinance your home may be to shorten the length of your loan. Let's say interest rates have gone down, while value of your home has gone up—you may be able to refinance your home to a shorter loan term. For example, by going from a 30-year-fixed loan to a 15-year-fixed loan you'll pay off your mortgage sooner and at a lower interest rate.
Cash out refinance
By tapping into the equity in your home, you can have extra funds available for debt consolidation, home remodeling projects, major purchases or other financial needs.
Mortgage loan refinancing considerations
Refinancing your mortgage is one piece of a larger home loan puzzle—you'll need to consider several factors besides just lower interest rates:
- You may need to stay in your home for a number of years in order to realize the potential savings of mortgage refinancing.
- Read your current mortgage documents to determine if you will have a pre-payment penalty to pay on your current loan.
- Consult your tax advisor because there may be tax implications to consider with mortgage refinancing.
- Determine any fees or charges that you may be responsible for paying if you refinance your home mortgage loan. These may include but are not limited to the following: application, recording, title, mortgage tax settlement, tax service and processing fees.
We can help you take the next step in home loan refinancing
We can help you determine whether mortgage refinancing will save you money. To learn more about the advantages of KeyBank Mortgage,® home equity mortgage refinancing, loans and more, please contact us. Your session includes a consultation to determine what type of loan you could qualify for.