Home Loan Refinance
For many home owners, the equity they have in their home represents one of their major financial assets. There are a number of advantages to owning a home, but two of them play a role in increasing that total equity, or the difference between the outstanding loan and the value of the home.
You probably understand tapping into your home’s equity is a major reason to consider a home loan refinance. However, there are a number of other reasons property owners take the time to review their home loan refinance options.
Home Loan Refinancing As A Financial Tool
Whether or not your home has substantial equity, there are a number of reasons you might find home loan refinancing might make sense. A few of those major reasons include:
- Taking advantage of new loan rates and/or programs. Depending on your financial situation, it is often possible to find a new loan program that justifies refinancing. For example, you might have accumulated cash that allows you to make a larger down payment while getting a new loan. This can save interest and PMI expenses.
- Eliminating other debt by consolidating it into your mortgage. If you have accumulated debt at higher interest rates and high monthly payments, you can often lower your total monthly payments and interest expense by rolling it into a new home mortgage. Moving from 12-18 percent to 3-5 percent is usually a smart financial move.
- Eliminating an adjustable rate mortgage. If you secured a mortgage while rates were very low, you might face the possibility of a higher rate and larger monthly payments. There may be good alternatives that allow you to avoid those increases.
- Providing cash for other uses and investments. Of course, one of the greatest uses of home loan refinancing is to gain access to your equity in the form of cash.
Your home loan refinance can turn your equity into an active asset and save you money. Questions? Contact Paramount Equity® today. We look forward to helping you.