According to Freddie Mac, the mortgage rate for the 30-year mortgage rate is at 2.88% as of August 6, 2020, a new low. With that in mind, it’s best to begin the refinancing process. Though refinancing helps reduce your monthly payment, there’s actually more benefits to refinancing than it might first appear to have.
Firstly, refinancing your mortgage can expedite your payoff. The amount of money you save from refinancing your mortgage can easily help speed up your total payoff time. A lesser known benefit involves refinancing to different types of mortgages. By changing your plan from a 30-year plan to the 15-year plan right now, you take advantage of rates in the 1-2% range, helping you build up equity much faster than you would without it. Another method of refinancing, from an Adjustable Rate to a Fixed Rate, is also capable of helping greatly with saving money and decreasing interest due. A final method that can help is by getting rid of private mortgage insurance. When owning a house with less than 20% in equity, it’s typical for mortgage lenders to require you to pay an extra fee in the form of PMI to discourage defaults. As a result, it’s best to refinance when you’ve reached 20% equity in your home to also remove the extra payment on top of snagging a lower interest rate.
Contact me today to find out how much we can save.
