If you’re like most homeowners, you have probably considered refinancing your home at some point.
This is a very important decision, and there are many factors to consider before you decide whether or not to refinance.
In this post, we will discuss the 6 main reasons to refinance your home in 2023!
Refinance your home to get a lower interest rate
If you have an adjustable-rate mortgage, your interest rate could go up at any time. By refinancing into a fixed-rate mortgage, you can lock in a low interest rate for the life of your loan.
Refinance to lower your monthly payment
If your current mortgage is more than you can afford, refinancing into a new loan with a lower interest rate and/or shorter term will reduce your monthly payments.
This could free up some extra money each month for other expenses or savings.
If you’ve paid down the principal balance of your mortgage, this can help lower your monthly payments as well since the loan balance would be lower.
Shorten the length of your mortgage
If you’re close to retirement, it may be a good idea to refinance into a shorter-term mortgage so that you can pay off your home in just a few years instead of decades. This can help reduce your overall living costs in retirement.
30 year mortgage versus a 15 year mortgage
Get cash out for home improvements or other expenses
If you have equity built up in your home, you may be able to refinance into a new loan with a higher balance. This will give you extra cash to pay for home repairs, renovations, or other expenses.
Refinance to consolidate your debt
If you have high-interest credit card debt or other debts, refinancing into a new mortgage with a lower interest rate can save you money on interest payments each month.
This can help you get out of debt faster and improve your overall financial situation.
Refinancing can help remove private mortgage insurance
If you put less than 20% down on your original home loan, you’re likely paying private mortgage insurance (PMI).
Refinancing into a new loan with 20% equity can eliminate this monthly expense, which would lower your monthly mortgage payment.
If you’ve purchased a home using an FHA loan, your PMI payment may be high and a refinance would most likely bring that payment down or eliminate it completely.
Read more: How to remove PMI
What is needed to refinance?
The paperwork needed depends on the loan program. The basic documentation consists of:
- Proof of income via paystubs and W2s, or tax returns for self employed borrowers.
- Drivers license
- Bank Statements
- Mortgage Statement
If any of these reasons sound like something you would benefit from, refinancing your home in 2023 may be a good idea for you!
Need more info? Check out this article: What Happens When you Refinance your Home?
Contact us today to see if refinancing is right for you!
We would be happy to go over your specific situation and give you our expert opinion.
Give us a call or fill out our online form to get started. We look forward to hearing from you!
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