There are many people who refinance their homes throughout their lifetime. There are a few reasons for that – which we will discuss today! Owning a home is not only something you should take pride in, but also a way you can use as an investment tool as well.
Some people will refinance their home in order to get a better (lower) interest rate. If your current interest rate is 5% and it goes down to 3.5%, it is something to think about. Before making the decision on our own, it is always recommended that you speak with a professional about your options. From the outside looking in, a 1.5% interest rate drop sure sounds enticing!
Then there are others that may have come into a significant amount of money and want to pay off their mortgage a quicker. For example, if they originally took out a 30-year mortgage and decide that they want a 15-year mortgage, they may refinance to a 15-year mortgage instead.
The reverse is also possible. What that means is…if you currently have a 15-year mortgage but can no longer afford the monthly payments, you have the option to refinance to a 30-year mortgage. By doing this, you would decrease your monthly payments.
We want to remind you that you should always pay off your mortgage in a timely manner and save as much money as possible in the process. Tough times happen and sometimes homeowners need money to pay for debt, education, or other things that may come up in life. You are able to refinance your mortgage and pull out some of your equity. As we mentioned earlier, please be sure you speak to a professional before making a decision such as this.
If you need to remove someone from your mortgage (think: divorce) you can refinance your mortgage to remove him or her.
Unexpected things happen in life sometimes and you have to roll with the punches! Before making any of these decisions, please do not forget to speak with a professional and see what advice they have for you.