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Those who have a home mortgage know this is a long-term financial obligation. Your mortgage payment is typically your largest monthly expense. Whether you took out a mortgage a year ago or you have been paying on a mortgage for several years, it may be time to consider refinancing home mortgage to see if you can lower your monthly payments.
If you are considering home refinancing, you may wonder if there are benefits associated with taking this major step. In fact, there are numerous benefits to home refinancing including:
1. Lowering your monthly payment — if you bought your home or refinanced your home at higher than the current market interest rate, you could lower your monthly payment by refinancing while rates are low.
2. Eliminating private mortgage insurance — if your home has increased in value since you took out your mortgage or refinanced your mortgage, it is possible you can eliminate PMI from your payment. This would require you to have 20 percent equity in your home.
3. Changing loan programs — those who have an adjustable rate mortgage may consider home refinancing in PA and NJ. Getting into a fixed-rate mortgage makes sense as it provides stability, particularly since interest rates are starting to increase.
4. Improve your credit score — if you have significant equity in your home, you could take advantage of a cash-out refinance of your home in order to pay down other debt. This could be a great way to improve your credit score; lower credit card debt may result in a slight boost in your credit score.
5. Reduce your mortgage term — when you have no need for immediate cash, you could trim years of your mortgage. If you have a 30-year mortgage that you have been paying for five years, you may be able to refinance into a 20-year mortgage which could save your five years of interest payments.
6. Reduce student debt — those with equity in their home may wonder if refinancing your home (in PA & NJ) can help with student debt. If you have equity available, it may reduce the amount you need to borrow.
7. Increase home equity — those who have inherited money, had significant lottery winnings, or have built up their savings, may find it worthwhile to put that extra money into their homes to improve their equity, lower their payment and reduce their mortgage terms.
If you are considering a new home mortgage or refinancing your home in Pennsylvania or New Jersey, contact Federated Lending in Bucks County, PA and talk to one of our experienced loan officers for help. Interest rates are still low and you could benefit from refinancing today. Let us help you determine if there is a loan program available to help you meet your goals.