Refinancing can help you consolidate debt, pay for home upgrades, get a more favorable interest rate and more! We’ve listed a few popular reasons for refinancing to help you decide if it is the right choice for you.*
1. You want a smaller interest rate
While mortgage interest rates are relatively low, a more favorable rate could add up to thousands of dollars over time. Refinancing could help you get a smaller rate if the overall rates have dropped or if you’ve improved your credit.
2. You want a smaller monthly payment
Refinancing may help you reduce your monthly mortgage payment.
3. You’d like to eliminate private mortgage insurance
Tired of making private mortgage insurance payments each month? You may be able to refinance and get rid of those pesky monthly PMI payments.
4. You’d like to pay down other high-interest debt
Mortgages usually have much smaller interest rates than credit cards and other loans. If you’ve built up some high-interest debt, refinancing could help you pay it down, limiting your costs over time and setting you up for a more stable financial future.
5. You want to cash-out
A cash-out refinance can help you pay for home repairs, cover emergency expenses or fund a fun family adventure.
6. You’d like to switch from an adjustable-rate mortgage to a fixed-rate mortgage
Adjustable-rate mortgages can be great in some situations, but refinancing can help if you’d like to switch to a fixed-rate mortgage so you don’t have to worry about rising costs.
7. You’d like to pay off your loan faster
If you’d like to pay off your loan quickly, refinancing could help you shorten the loan term and get a smaller interest rate.
8. You’d like to pay off your loan slower
Most people want to pay their loans off as quickly as possible, but in some situations, it may be advantageous to pay off your loan slower while paying off other debt or building your retirement accounts. If that’s the case, you may be able to refinance for a longer loan term.
9. You need to buy someone else out
Refinancing may be a smart solution if you need to buy someone else out of your mortgage (for example, an ex-spouse or parents who co-signed your loan).
*When it comes to refinancing your home loan, you can generally reduce your monthly payment amount. However, your total finance charges may be greater over the life of your loan. Your PRMI loan professional will provide you with a comprehensive refinance comparison analysis to determine your total life loan savings.