If you have an adjustable rate mortgage, refinancing could get you a low fixed-rate that will protect you from rate increases and save you money over the life of the loan. Refinancing may also let you take cash out of your home for improvements, debt consolidation or educational expenses. Refinancing may also lower your monthly payments 1 and overall monthly debt, increasing your cash flow. If you’re currently paying private mortgage insurance (PMI), refinancing my mortgage might eliminate that monthly cost thanks to the equity you’ve built up.
If you’re looking to access the equity in your home, you may be wondering about home equity loan vs. cash-out refinance and which is the right choice. Both options allow you to tap into your home’s equity, but they work differently. A home equity loan gives you a lump sum of money you can use for any purpose, while a cash-out refinance replaces your existing mortgage with a new loan that includes the amount of equity you want to tap into. But which is better refinance or a home equity loan? Ultimately, the decision comes down to what you want to use between a home equity loan vs. refinance and what type of loan best fits your needs.
Finance My Home helps you with cash out refinance loans that can help you access the equity in your home and get the cash you need. You can refinance my mortgage with a cash-out refinance and get cash back simultaneously. This can be a great way to consolidate debt, make home improvements, or get the cash you need. So if you’re looking to learn more about cash-out refinance interest rates, come to Finance My Home and talk to us.
A Finance My Home Mortgage Loan Originator can help you decide if it’s the right time to refinance home equity loan.
Benefits of Refinancing a Second Mortgage
Refinancing a second mortgage is often motivated by lower interest rates which help lower costs over time. But there is no “one-size-fits-all” solution. Here are few reasons you might benefit from home mortgage refinance rates.
When rates fall, it’s tempting to refinance. A common rule is that a 1% drop in rates will make it worthwhile, but this varies. For a homeowner with a $300,000 balance, a rate reduction of even less than one percent can lower the monthly payments by a couple hundred dollars and cut long-term interest expenses by hundreds of thousands.
Replace a longer term loan with a shorter one and you’ll be out of debt sooner. This is a good option if you’re okay with higher payments.
Lower Interest Costs
Locking in a better fixed-rate is great, but it is not the only way to lower your bills. Adjustable Rate Mortgages (ARM) generally offer to refinance rates home mortgage rates in the early years followed by higher rates later. If you plan to be in the house for just a few years, an ARM may make a lot of sense.
Borrowers may use their home’s equity to pay for major purchases or to make home improvements.
A Mortgage Loan Originator can help you decide if it makes financial sense to refinance. Contact us today to learn about your options.