In the part 1 of the Four Reasons To Do A Mortgage Refinance you learned about taking equity out or your home and getting rid of PMI as a reason to do a mortgage refinance. In part 2 you will learn the other 2 reasons why you should do a mortgage refinance. Remember, a mortgage is most likely going to be the biggest loan you ever have, so making sure you save the most money on it is very important.
Losing Your Adjustable Rate Mortgage
Did you know that the most common reason for the housing crisis was because of all the adjustable rate mortgages people had? And adjustable rate mortgage is great if you want a lower monthly payment, but after a while your rate will start to increase which will make your mortgage payment increase. The riskiest thing about an adjustable rate mortgage is that at any time your interest rate could increase and there is nothing you can do about it.
Getting rid of your adjustable rate mortgage is a very good thing because you lose the risk of the market fluctuation and you can keep a set mortgage payment. Getting rid of your adjustable rate mortgage and switching to a fixed rate loan is especially good since you have had your home for a while and your credit has been established because now your fixed rate could be as low as your adjustable rate mortgage is.
Lower Monthly Loan Payment
This is possible the biggest and most common reason for anybody doing a refinance mortgage. The great thing about this is a reason to do a mortgage refinance is you will not have to pay as much per month for your loan.
If the home you are thinking about refinancing is your first home most likely you have a slightly higher interest rate. The nice thing about this home being your first one is that you have had the time to establish your credit and now if you refinance your home you should be able to get a lower interest rate which means a lower payment. No matter what your reason is for doing a mortgage refinance lowering your monthly payment is almost always a benefit.
Now that you know the 4 reasons to do a mortgage refinance I hope you can decide for yourself if it is the right option for you. Doing a mortgage refinance for the right reason can save you a lot of money over the years, just remember every reason has its pros and cons.
Going through a mortgage refinance can be very difficult because not every lender will tell you everything you need to know and some will even try to rip you off. It is best to go into a meeting with a lender with as much knowledge as possible. With what you have learned in the 4 Reasons To Do A Mortgage Refinance you should now be able to decide if you really need a mortgage refinance or not.