Refinancing an existing mortgage is not a decision to be made lightly.
While it may seem like a convenient way to ease some of your financial burdens at the present time, you need to carefully consider how it will affect you financially in the future. Before jumping into a new home loan with new terms, review all of your options with a qualified St. Louis mortgage broker like Better Rate Mortgage to make sure this is the solution that will meet your current needs and your future plans.
Why Should You Refinance?
There are a number of reasons why people consider refinancing their current mortgage. One main reason to refinance is to get a lower interest rate. A basic refinance to a lower rate where you are not cashing out any of the equity you have built into the home will lower your monthly payments. This makes available to you more cash to pay other bills.
When home values fell, the cost of the existing mortgage became more than what the home was worth. These homeowners are left with two choices – either stick it out and continue with their high monthly payments until the home regains value or sell the home at a loss. What many of these homeowners are not realizing is that home values are slowly climbing, and what the assessed value of their home was two years ago may be drastically different than what it is today. If you fit into this scenario then you should be talking with a broker like Better Rate Mortgage to find out if the tide has finally turned in your favor.
Refinancing to Consolidate
Homeowners who realize that they have built equity into their home may sometimes look at refinancing as a way to consolidate other high interest debts they may have, such as credit cards, into their home mortgage. Talk this over with a mortgage expert like Better Rate Mortgage first. While seemingly a good idea at first glance, you have to consider that even though the rate is considerably lower, you are now adding that debt into a 30-year commitment. You may be better off to refinance just the home and use the extra monthly cash to pay those other debts off faster.
Schedule an appointment with Better Rate Mortgage to discuss your options. You might have more equity in your home than you thought, allowing you to finally break free from high interest mortgage terms into rates that you can live with.