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Hey Isaac,

Many people take up mortgage loans to enable them to become homeowners. However, at some point, many of them wonder whether refinancing their mortgage loan is the best option. For instance, the change in your financial goals or costly home repairs may cause to you to consider this possibility. Refinancing your mortgage is similar to refinancing your vehicle.

It means that you pay off your current mortgage and get a brand new mortgage with its terms and conditions. The best thing to do if you chose to refinance is to weigh the benefits against any further costs that you may incur. Below are three reasons why you should consider refinancing.

1. Pay of the Mortgage Loans Faster

Most mortgages are payable within a term of 30 years. However, you can get options for 15 or 20 years mortgages. By reducing the time of your mortgage to 15-20 years, you will reduce the duration of paying it by around 33 to 50 percent, which means that you'll make savings on interest. Remember that short-term mortgages have a lower interest than the 30 years ones in most cases.

2. Get Cash Out Of Your Home

When you refinance your mortgage loans, the terms can change. If you have equity in your house, for example, you owe less than its total value, you can get a higher loan, which is better than the current mortgage balance. It means that you'll receive cash at its closing. You'll benefit if you've been paying for years and would like to invest the equity in home repairs.

3. Lower the Monthly Payments

One primary reason for refinancing your current mortgage is to lower the monthly payments. The new mortgage will come with its terms and conditions, one of them being a new interest rate. If the current market rates are lower than those on your home mortgage are, it makes an excellent case to refinance, for example, if you can lower the interest rate by one percentage point.

Summary

Choosing to refinance your home mortgage has several benefits as the post above shows. Make sure that you seek expert financial advice before deciding to make this crucial financial decision.

Kelly

Account Manager
thinkersofouramerica.com