When consumers consider refinancing a home mortgage loan, they often wonder if they should refinance their mortgage or not. There are many reasons to refinance a house, so when considering a refinance, it is important to make sure that there is a benefit to the new home loan. Without a benefit to the new home mortgage, there is no need to refinance.
Lower Monthly Mortgage Loan Payment
One of the main reasons people consider a refinance home loan is to lower the monthly payment. Refinancing can save you money per month by decreasing the loan payment. The rule of thumb is that a refinance mortgage loan is beneficial if the home mortgage payment decreases by at least 5%. So, if your current home loan payment is $1000, then the new home loan …show more content…
Many consumers will refinance from a 30-year mortgage to a 15-year mortgage in order to payoff the mortgage loan quicker. By refinancing into a 15-year loan, not only do you save money on the interest rate, but you will save money over the lifetime of the home mortgage loan. With current interest rates low, 15-year mortgages have become a common option for many homeowners.
Cash Out Home Mortgages
For many people, a cash out mortgage is a great opportunity to use the equity in their property to pay off debts, do home improvements or to just get some extra cash out. A cash out mortgage loan refinance can help lower total monthly debt payments by consolidating credit cards, car loans, installment loans and mortgage loans into one payment. By consolidating debts into one payment, many people have saves thousands per month.
Escrow Accounts
A home mortgage refinance can also be used to catch up a homeowner on their escrow account or help pay off any delinquent property taxes. At times, some homeowners can get behind on their escrow accounts because property taxes and homeowner's insurance premium change yearly. If the escrow account becomes too short, many home loan companies will increase the month payment in order to catch up on the negative escrow account. Sometimes the increase home mortgage payment is over $500. By refinancing, the consumer has the power to restructure the escrow
Lower Monthly Mortgage Loan Payment
One of the main reasons people consider a refinance home loan is to lower the monthly payment. Refinancing can save you money per month by decreasing the loan payment. The rule of thumb is that a refinance mortgage loan is beneficial if the home mortgage payment decreases by at least 5%. So, if your current home loan payment is $1000, then the new home loan …show more content…
Many consumers will refinance from a 30-year mortgage to a 15-year mortgage in order to payoff the mortgage loan quicker. By refinancing into a 15-year loan, not only do you save money on the interest rate, but you will save money over the lifetime of the home mortgage loan. With current interest rates low, 15-year mortgages have become a common option for many homeowners.
Cash Out Home Mortgages
For many people, a cash out mortgage is a great opportunity to use the equity in their property to pay off debts, do home improvements or to just get some extra cash out. A cash out mortgage loan refinance can help lower total monthly debt payments by consolidating credit cards, car loans, installment loans and mortgage loans into one payment. By consolidating debts into one payment, many people have saves thousands per month.
Escrow Accounts
A home mortgage refinance can also be used to catch up a homeowner on their escrow account or help pay off any delinquent property taxes. At times, some homeowners can get behind on their escrow accounts because property taxes and homeowner's insurance premium change yearly. If the escrow account becomes too short, many home loan companies will increase the month payment in order to catch up on the negative escrow account. Sometimes the increase home mortgage payment is over $500. By refinancing, the consumer has the power to restructure the escrow