If you want to lower your monthly mortgage financing payment, loan refinancing may be right for you. There are a few different ways of refinancing could help reduce monthly payments. Refinancing is not a second mortgage but applying for a new home loan to pay off the existing home loan.
There will be costs associated with closing on the new loan since you will need to close on the loan, just like you did when you purchased the home. You may also have to get a current appraisal of the home. It is important to make sure you understand the costs associated with refinancing when choosing a refinancing option that is best for you:
- Refinance for a lower interest rate while keeping the same number of remaining payments as the original mortgage. For example, if your current interest rate is 6% and you can refinancing at 4%, without altering the repayment period, your monthly payments will go down since you will be paying less interest.
- Refinancing the repayment period on the existing loan for a longer period. For instance, if you initially have a 15-year fixed rate loan, refinancing to a 30-year fixed rate loan will lower the monthly payment. Just keep in mind, you could end up paying more in interest because the loan is much longer.
Depending on your financial situation, there could be other refinancing options available which could help lower your monthly payments. To learn more about these or to apply for refinancing on your home, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 to speak with a representative today!