Whats NEW in Mortgages Today

Many homeowners can benefit from refinancing their home mortgage with the current market conditions being heavily in your favor right now. Interest rates are at all time historic lows and you would be fortunate to see these rates come back again in your lifetime. With that in mind, it is very important to have a financial goal in mind so that you can easily choose the correct refinancing option in order to truly benefit from mortgage refinance. Refinancing a home loan is a very big, and important decision that rests entirely on the homeowners discretion depending on what there financial situation and goals are. Here are 3 of the most popular reasons homeowners choose to refinance a mortgage.

Get a Less Expensive and More Affordable Monthly Mortgage Payment

Most homeowners will be able to save a lot of money just by getting a home loan interest rate that is 1 percentage point or more less than what they pay. The truth is, homeowners who do not refinance are most likely wasting money every month on unnecessary interest payments. Refinancing a mortgage will give a homeowner a few different choices that will lower monthly home loan payments. With rates like we are seeing right now, virtually everyone can save 1 percentage point on their mortgage.

Refinancing into a home loan with a lower interest rate is the best, and most popular way homeowners save money through refinancing. Lower interest rates almost always mean lower monthly home loan payments.

Homeowners can also choose to change the length of their home loan. The typical mortgage is 30 years long, and many homeowners are already a few years into payments. Refinancing a mortgage will let homeowners lengthen their home loan so that the payments are more spread out, and cheaper every month. Some homeowners may want to save as much money as possible and will want to actually shorten the amount of time it takes to payback their mortgage. Shortening the home loan will dramatically reduce the amount of interest a homeowner pays in interest over the course of the home loan.

Switch an Adjustable Rate Mortgage to a Fixed Rate

Many homeowners who purchased a home within the past decade have gotten into an adjusted rate mortgage. These popular loan types were easy to qualify for, and often offered very low initial interest rates. However, since then, many of the ARM loans have adjusted and gone up dramatically in interest rates due to a struggling economy and housing market. Fixed rate mortgage interest rates though have steadily declined and are now at near record lows. Many homeowners should think about dropping their ARM loan for a more stable, lower cost fixed rate mortgage.

Most homeowners will be living in their home for many years to come but some may be planning on selling or moving out in the near future. If a homeowner will not be living in their home for too much longer, refinancing into a fixed rate mortgage may not be beneficial at all. The costs associated with refinancing a home loan will not be easily recovered, and homeowners who sell their home before the savings come into effect will just lose money on a refinance. As a general rule of thumb, homeowners who will be living in their home for 6 or more years will be better off with a fixed rate mortgage.

Get Cash from A Homes Equity

Many homeowners use their homes value as a type of savings account. A cash out mortgage refinancing will let a homeowner tap into their homes value, and the equity they have built, to get the homeowner a large amount of cash that can be used for anything. Many homeowners get a cash out refinance and make a major purchase, pay off college tuition, pay medical bills, or eliminate other high debts. No matter what you use the money for, a cash out refinancing is another popular mortgage refinance option.

Each persons situation is different, but there are many choices to be made when refinancing a mortgage. Homeowners will generally be refinancing for one of these four reasons. Everyones situation is unique and the only way to truly figure out what mortgage refinancing option is right is to contact your GoldStar Financial professional today and discuss your options.