There are many benefits to refinancing your mortgage.
Refinancing provides the opportunity to save money, pay off your loan faster, and even provide significant cash. Read below to find out the different ways refinance can benefit you:
1. Lower interest rate
Refinancing allows borrowers to lower their original interest rate, resulting in lower monthly payments and saving thousands of dollars over the life of the loan.
2. No Mortgage Insurance
If your first mortgage an FHA-backed loan and you have mortgage insurance, you can get rid of the monthly insurance payment by refinancing to a conventional loan.
3. Shorter term
A shorter loan term allows you to save thousands on interest. The most common shortened loan terms are 15 and 20 year terms.
4. Ability to Prepay
When refinancing, if you have a lower interest rate but choose to pay the same monthly payment, you will actually be paying off more money on the principal.
5. Fixed rate
If you have an adjustable-rate mortgage, a refinance with a fixed rate allows you to secure a low interest rate as well as keep your monthly payments fixed over time.
A cash-out refinance allows you to borrow enough money to pay off closing costs and leave with some cash, in addition to paying off your old mortgage. This is done by taking out equity from your home. People use this extra cash in a variety of ways including to pay off consumer debt.
A cash-in refinance allows you to add to your equity by putting down a larger down payment. This will lower monthly payments and save money on interest.
For more information on buying or refinancing a home in Hawai'i, please contact Solid Rock Home Loans at (808) 255-7498 or by e-mail at firstname.lastname@example.org.
*Info from www.frameworkhomeownership.org