By Carrie Reeder
Before choosing to refinance a mortgage, each homeowner should
take into account the pros and cons. As a result of declining
interest rates, many people reason that now’s the time to
refinance. For many, this is a smart move. However,
may not be wisest choice for others. Homeowners should
with a goal in mind. Here are the top three reasons why
homeowners opt to refinance their mortgage.
Refinancing is Ideal for Putting Money in Your Pocket
The primary reason for refinancing an existing mortgage is to
save money and obtain extra cash. With a refinancing, most
homeowners obtain a lower interest rate. Hence, their monthly
mortgage payments will decrease. For a noticeable monthly
savings, the new mortgage rate should be at least two points
below the original. In some instances, homeowners may save a
few hundred dollars a months.
Additionally, refinancing is perfect for cashing in on your
home's equity. For the most part, homeowners would have to
their homes in order to access the equity they have built.
However, a cash-out refinancing makes it possible to tap into
your home's equity, while remaining in your home.
Eliminate Debts with a Cash-Out Refinancing
If selecting the cash-out refinance route, homeowners are
the perfect opportunity to become debt free. It's easy to
acquire a large amount of credit card debt. However,
eliminating debts is not as simple. With a cash-out refinance,
homeowners receive a lump sum of money at closing. Smart
homeowners put the money to good use. This may include
for retirement, paying off creditors, or making necessary home
Refinance and Convert to a Fixed Rate Mortgage
Before falling interest rates, many homeowners opted for an
adjustable rate mortgage because of the initial low rates.
However, adjustable rate mortgages are unpredictable and may
increase or decrease without warning. Hence, your mortgage is
free is fluctuate.
About The Author: Visit www.abcloanguide.com to find a
list of reputable online lenders for low credit score mortgage
refinance. With rates being so low, now is the perfect time
homeowners to lock in at a low rate. Thus, they avoid changing
rates, which means their mortgage payments will always remain
the same throughout the life of the loan.