Has it been a few years since you purchased your home? Things may have changed for you since you made that commitment to a 30-year mortgage – your income and credit score could have gone up. Interest rates may have gone down. Now is a great time to see if refinancing your mortgage makes sense for you!
#1 Spend less money
If interest rates are lower now than you are currently paying on your mortgage, you’ll likely save money by refinancing your mortgage. You’ll potentially pay less money each month and less interest over the life of the loan. You may also save money by switching from a fixed-rate mortgage to a variable-rate mortgage or vice versa.
There’s another way to possibly save money on interest: your credit score. If your credit score has improved since you applied for your current mortgage, you may be eligible for lower interest rates.
Even if interest rates and your credit score haven’t changed since you purchased your home, you could save thousands in interest by refinancing a 30-year mortgage with a 10- or 15-year fixed-rate mortgage.
#2 Pay off your loan faster
Wouldn’t it be fantastic to have one less bill to pay each month? If you refinance your 30-year mortgage with a 10- or 15-year mortgage, you’ll pay off your loan much earlier, and will free up more money in your monthly budget once it’s paid off. Another benefit of paying off your mortgage faster is it allows you to build equity in your home faster. You could use that available equity for possible home equity loans in the future for home improvements, renovations, repairs, and more!
#3 Consolidate debt
If you have built up equity in your home, you may be able to get a home equity loan and use some of it to pay off any high interest credit card debt. You’ll likely save significantly over credit card interest and fees, and will eliminate more payments from your monthly budget. Would that help you breathe easier on bill-paying days?
Our mortgage consultants are here to help you through the refi process and help you compare your options. Contact us to start a conversation today:
*These interest rates are used as an example only and are hypothetical. Contact us directly for current rate information. In the Merrimack Valley area, visit mvcu.com or call 800-356-0067; in the South Shore area, visit bridgewatercu.com or call 800-897-0343.