The Big Benefits from Refinancing Your Mortgage

Buying a home is truly a massive milestone for every person. But with that comes a significant financial commitment to paying up your monthly mortgage. While some people don’t have any issues with their monthly repayment, many may experience some struggle as they try to make ends meet. For this reason, financial moves like refinancing can help lift some weight off your shoulders.

Mortgage refinancing can come with a wave of benefits. However, this will vary from borrower to borrower and depend on their financial needs and situation. That’s why some may need to look for alternative mortgage loans to help them pay for their homes.

4 Reasons Why You Need To Refinance Your Mortgage

If you’re thinking of refinancing your mortgage but need a little bit more convincing, read on. In this article, we’ll take a deep dive into the different advantages you get from refinancing your mortgage. Let’s take a look!

1. You Get a Better Mortgage Rate and Lower Monthly Payments. One of the most common reasons homeowners refinance their mortgage is to save more by changing their mortgage rates. Some homeowners have a much better credit situation in some cases, allowing them to be eligible for a lower rate. Because you have a lower interest rate, you get to have lower monthly payments, too. This is particularly helpful if your refinanced mortgage has the same payoff date as your previous home loan. With this, you can extend your payoff date, allowing you to pay less each month.
2. You Can Change Your Rate Terms. Some homeowners currently have an adjustable-rate mortgage; while this can be good for some people with stable income, some may need certainty and stability by getting a fixed-rate loan. With a fixed-rate loan, you won’t have to worry about monthly payments and a sudden increase in interest rates.
3. You Can Shorten Your Loan Term. Typically, first-time homeowners will start with a 30-year home loan, but if you get an increase in your income and can manage to shorten your term loan, you can do so with a 15-year fixed-rate mortgage. With this, you get to pay off your mortgage much faster, allowing you to save more from interest as well. Often, mortgage rates with a 15-year term also have lower mortgage rates, so it’s always best to refinance your mortgage to a shorter-term if capable. Of course, it’s best to choose a credible mortgage broker to ensure that you’re choosing the right terms that fit your financial health.
4. You Can Consolidate Your Debts. Cash-out refinancing can help you pay off debts and save money on interest, besides reducing your total monthly payments. Usually, mortgage rates are lower than the interest paid on credit cards and other unsecured debt; with that, you save on interest payments. Additionally, mortgages can be repaid over longer terms when you refinance. This way, you can reduce your monthly repayments if this works better for your financial situation.

The Bottom Line: You Get a Mountain of Benefits When You Refinance Your Mortgage

These are only a few of the biggest reasons you should refinance your mortgage, but the bottom line is, you get to save more and fit your payment options due to your current financial situation. With a refinancing, you can save more, pay in a shorter period, and even lower your interest rates, allowing you to put your money on other assets that matter to you, too.

Of course, when you’re thinking of refinancing your mortgage, you need to ensure that you choose a better mortgage lender to suit your needs. But where can you find that?

Work with MidAmerica Bancorp, Inc

MidAmerica Bancorp, Inc. offers various mortgages for first-time and returning homebuyers with significantly low down payment options. Our services include FHA, VA, conventional, and jumbo mortgages. We’re also licensed in various states, including Illinois, Indiana, Florida, Michigan or Wisconsin.

Thinking of working with MidAmerica Bancorp Lenders? Reach out to us today at (708) 237-4050!