After years of trying unsuccessfully to list my home on my own, I finally realized that I needed some serious help. I began looking for a great real estate agent who could help me out, and after interviewing a few professionals I found someone that was really in tune with what I needed. They sat down with me to talk about my needs and worked hard to help me to identify different homes that could work for my family. I wanted to make a blog all about selecting the perfect agent to work with during your house hunt. Check out this blog for great tips on choosing agents.
Making the decision to refinance your home can be tough, while there are many benefits to doing it, your mortgage will essentially start over the next few years will involve paying more interest than principal. That said, there are still some good reasons to move forward with a home refinance.
Get Rid of PMI
Private mortgage insurance is what you must pay when you purchase a home with less than a 20% down payment. While traditional loans eliminate PMI once you have paid more than 20% of the home's value towards the principal, some federal loans require that PMI be paid over the course of the entire loan.
The only way to drop PMI with one of those federal loans is to refinance the home. Even if you have a higher interest rate with your refinance, not having to pay PMI could end up saving you money over the life of the loan.
Shorten Your Loan
When you first got your home, you may have been conservative with the type of loan you requested. A 30 year loan meant lower payments each month, but you will pay more interest over the life of the entire loan.
As you get older and advance in your career, you may find that you're earning and saving more money than you anticipated. It may want you to pay off your home sooner by switching to a shorter term loan that will better meet your needs. Switching from a 30 year mortgage to a 15 year mortgage can lower how much total interest you pay, as well as end those mortgage payments earlier.
Get a Better Interest Rate
Your 15 or 30 year mortgage may be a fixed rate, but refinancing is always an option if you wish to change it. If the interest rates changed and are suddenly much better than what your current rate is, refinancing is always an option to take advantage of those rates. You will need to do the math to determine if the new total interest and closing costs will be less than the remaining interest that you owe, but it is possible that starting your mortgage over again can save you money.
These are just a few reasons that it can be wise to refinance your home. If you are not sure if a refinance is best for your financial situation, meet with a mortgage lender that can determine what is best for you.