Some people are content with their current mortgage rate and never explore the possibility of refinancing their home. Mortgage rates change on a regular basis, based upon economic factors. After the housing market crash and economic crisis about a decade ago, interest rates dropped significantly and have remained low. As such, it could be beneficial to check out the current interest rates on various loan products through a qualified mortgage broker.
Lower Mortgage Rate
A common myth is to only refinance when interest rates drop by two percentage points or more. However, even half of a percentage point reduction can help save you thousands of dollars during the life of your loan. To see how much you could potentially save, it is easy to have your broker perform a comparison between your existing loan and potential new loan.
If you have an FHA loan and are paying mortgage insurance premiums, depending on the amount of equity in the home, refinancing could help eliminate the insurance payments and provide you with a lower interest rate, too. When refinancing, it is better to opt for a rate and term program, where you are only refinancing the existing balance on the current loan into a new one at a lower interest rate.
If your goal is to pay off your home sooner, consider a shorter repayment period if you can afford slightly higher monthly payments, as this will also help save you money in the long run. To learn more about refinancing options and different types of home loans you could qualify for, call the mortgage experts at Elite Financial by phoning (805) 494-9930 now.