Residential property refinancing is the process of replacing an existing mortgage with a new loan. Typically, people refinance their mortgage in order to reduce their monthly payments, lower their interest rate, or change their loan program from an adjustable rate mortgage to a fixed-rate mortgage. Additionally, some people need access to cash in order to fund home renovation projects or paying off various debts, and will leverage the equity in their house to obtain a cash-out refinance.
Regardless of your goal, the actual process of residential property refinancing works much in the same way as when you applied for your first mortgage: you’ll need to take the time to research your loan options, collect the right financial documents and submit a mortgage refinancing application before you can be approved.
Benefits of Residential Property Refinancing
There are several reasons to refinance your mortgage. One great potential benefit of residential property refinancing is lowering your monthly mortgage payment. According to one study, an average homeowner may save $160 or more per month with a refinance. With a lower monthly payment, you are free to put the savings toward other debts and other expenditures, or apply that savings towards your monthly mortgage payment and pay off your loan sooner.
Another great benefit of residential property refinancing is that you could reduce the length of your loan. For homeowners who took out a mortgage in the early stages of their career, a 30-year mortgage may have made the most financial sense. But for those who want to pay off their mortgage sooner, reducing the loan term can be an attractive option.
Another great outcome is switching from an adjustable-rate mortgage to a fixed-rate loan. When you have an adjustable-rate mortgage, your payment can adjust up or down as interest rates change. Switching to a fixed-rate loan with reliable and stable monthly payments can give homeowners the security of knowing that their payment will never change.
Generally, residential property refinancing is a good option if the new interest rate is lower than the interest rate on your current mortgage, and the total savings amount outweighs the cost to refinance.
If you’re interested in residential property refinancing, give us a call at 1-855-913-8637 or email us at firstname.lastname@example.org and let’s talk about your options and see what your new monthly mortgage payment might be!