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Are you wondering if now is the right time for you to refinance your mortgage? The refinance specialists at Grandview Lending have heard many homeowners voice a variety of reasons on why they want to refinance. Below are some of the common reasons you may choose to refinance your home loan.

Reason #1: You Want to Refinance to Get a Lower Interest Rate

Many homeowners refinance their mortgage, so they can swap their higher interest rates for lower ones. Refinancing to get a lower interest rate can help you save money on your monthly mortgage payments. Therefore, you’ll have extra money each month in your pocket to spend on other items you may need. Plus, refinancing can help save you thousands of dollars in interest that you would be paying over the life of your loan. Think of all the things you could do with that money instead. Therefore, if the present interest rate is lower than your mortgage by two percentage points, you may want to consider refinancing.

Reason #2: You Want to Refinance Because Your Borrower Profile Has Improved

How can your borrower profile improve? Perhaps, you’ve worked hard to improve your credit scores and have cleaned up some of the negative stuff on your credit report, your credit profile has likely gone up. Or, maybe the value of your home has increased, which has pushed your loan-to-value (LTV) ratio into a lower tier, improving your borrower profile. Therefore, you may be able to get a lower interest rate than what’s on your current mortgage.

Reason #3: You Want to Refinance to Switch Your Mortgage Type or Term

When you bought your home, you selected a specific loan type and term for your mortgage. For example, you may have a  5/1 ARM, FHA loan, conventional loan, or another loan product. As for terms, you may have a ARM that adjusts your interest rate after a certain amount of time or you could have a 15-year or 30-year fixed rate mortgage.

When you refinance your mortgage, you have the option to change your loan type and term to take advantage of the benefits offered by the new loan. For example, maybe you want a FHA loan, VA loan, USDA - Rural Hosing loan,  conventional loan, or another loan product with lower interest rates. Or, maybe you currently have a 30-year fixed rate mortgage and you want to pay off your mortgage sooner by changing to a 15-year fixed rate. Or, maybe you need to the exact opposite. Perhaps you want to reduce your large monthly payments by extending your 15-year fixed rate to a 30-year fixed rate.

Reason #4: You Want to Refinance to Get Money for Home Improvements

Are you thinking about renovating your kitchen or bathroom? Maybe, you want to add new siding or put on a new roof? If you have enough equity in your home, you may be able to do a cash-out refinance. Cash-out refinancing enables you to refinance your current mortgage for more than the amount you currently owe. With the extra money, you’ll be able to spend it on the things you want to do. Many homeowners prefer a cash-out refinance instead of taking out a home equity line of credit (HELOC), especially when they’re doing home improvements. Just make sure your interest rate will be lower than you’re currently paying.

Reason #5: You Want Refinance to Build Equity Faster

Are you tired of paying so much in interest? By refinancing to a shorter loan term, such as a 30-year loan to a 15-year loan, you can reduce the amount of your monthly payment that goes toward interest. Therefore, you’ll can build up equity and pay off your principal faster.

Reason #6: You Want Refinance to Consolidate Debt

If you have a couple mortgages or other non-mortgage debt like credit cards or a loan, you can refinance to consolidate all your debt into one loan. And, you may be able to save money in the process with a lower interest rate compared to what you’re paying now.

Are You Ready to Refinance?

Everyone’s financial goals are different when it comes to refinancing. If you think it’s time you should refinance your home loan, contact the mortgage experts at Grandview Lending in Indianapolis. We’re more than happy to discuss your refinance options and help you make an informed decision based on your needs. Get going on your refinance journey and start saving money – call us today at 317-255.0062.